Like “para-legal” in the world of law, the title “paraplanner” carries with it the implication that the role is less important than that of financial planners. This fails to acknowledge the importance of paraplanners in the financial advice process, and the part they can play in making financial planning practices more efficient and cost effective.
Of course, as financial professionals and planners, you are the people who go out and speak with clients, creating the ideas and strategies that ultimately help them achieve their goals.
But paraplanners sit on the other side of the financial advice coin, playing a key role in ensuring the technical aspects of your financial strategy is robust enough to withstand any potential complaint or investigation, while at the same time helping you be more productive and efficient.
One of the biggest challenges facing paraplanning is the way it is often seen as a stepping stone into the world of professional financial planning.
In the same way a junior partner in a law firm starts their career path by carrying out much of the technical legwork for a law firm’s partner, so paraplanners are often being trained in the technical aspects of the financial world before moving on to become a financial planner.
The issue, however, of seeing paraplanning as a stepping stone for those who want to progress into financial planning means high turnover of staff, which can be detrimental to your paraplanning team’s performance.
If your team has a paraplanner, who has built up experience and knowledge, and they move onto becoming an adviser, it is likely the remaining paraplanners will be less experienced. This could increase the risk of key compliance points being missed, suitability reports taking longer to produce, additional expense to the company in terms of time and recruitment costs.
However, those financial planners who recognise it as a career in its own right can see major benefits for themselves and their company.
Read on to discover three ways in which seeing paraplanning as a professional role could benefit you as a financial professional.
1. Reduce costs for financial planning businesses
We regularly see financial professionals spending money on recruiting paraplanners. As explained above, if this is something your company is doing, it might be because you are using paraplanning as a recruitment avenue for trainee planners.
This means that as the paraplanners progress through to financial professionals, they need to be replaced and potentially trained, both of which cost time and money.
Seeing paraplanning as a long-term professional career within your business would potentially help solve this issue. Instead of having a high turnover of staff in the paraplanning team, you could provide a structured career path that would provide job security and professional development for them, and consistent, high quality support for your business.
Another way of gaining these outcomes is to outsource your paraplanning needs.
One of our clients recently told us that they had decided to stop recruiting paraplanners as they are tired of paying the recruitment costs, just to see them leave the role and become a financial planner.
This issue is removed when working with us, as our aim is to develop long-term working relationships with businesses that take away the need for repeat recruitment costs.
2. Help provide consistent, high-quality outcomes for your business
A major issue of using paraplanning as a training vehicle, and moving colleagues into financial planner roles once they have built up their knowledge, is that it can impact on the quality and consistency of the technical support being provided.
This is because you remove the paraplanners who have developed a good understanding of the technical aspects of financial planning, potentially leaving it then to less experienced and less knowledgeable colleagues.
This may increase the chance of a mistake being made or key point being missed due to inexperience, meaning your business suffers from a lack of consistency when it comes to your technical support.
However, professional paraplanners like Paraplanning Hub, who can provide high levels of experience and knowledge, will be here for the long term, providing consistency in the quality of advice and support you receive.
3. Paraplanners could become a key part of your financial planning team
Seeing paraplanners as professionals in their own right means financial planners are more likely to see them as part of the advice team.
One way this can benefit you and your company is to invite paraplanners into client meetings, which means:
- Financial planners can concentrate on building all-important rapport with the client while the paraplanner makes technical notes.
- As the paraplanner can note key points and nuances that can easily be missed during the conversation, the suitability letter will be in tune with the client’s wishes.
- It is possible to have a post-meeting conversation with the financial planner, which tends to be shorter as the paraplanner fully understands both the client’s motives and aims and the financial planners’ strategy. This makes the process between the initial meeting and presentation meeting more efficient.
- The number of conversations between paraplanner and financial planners will be dramatically reduced, as the need to go back and check points is negated.
- With another experienced and knowledgeable professional in the meeting, ideas can be shared, and potential issues ironed out quickly. This could mean a recommendation is more robust under scrutiny, should there ever be a complaint or investigation made about the recommendation.
On top of these benefits, a client is also likely to be impressed that the financial planner has brought a technical specialist who will fully understand their needs and will work with the planner to ensure it is delivered.
Get in touch
If you are a financial planner and would like to discuss the potential cost savings and benefits of working with our experienced paraplanners, please get in touch. Contact us online or call on 01472 728 030.