The future of UK paraplanning is already here…
The future of UK paraplanning is already here, it is just currently based in Australia.
I have recently had the good fortune of mixing a trip to Australia to catch up with family and look in on a couple of the mega paraplanning businesses based in Perth Australia.
Before going into further detail let me put things into a little perspective. There are about 25000 regulated financial planners in both Australia and the UK, serving populations of 25M and 66M respectively.
Furthermore the typical paraplanning services offered are very similar to the UK focussing on producing ‘Statement of Advice Requirements’ (SOAs) similar to the UK’s Suitability Letters.
My initial research confirmed over 40 active freelance paraplanning firms in Australia. Whilst the majority are still one or two-person practices, a few employ between 10 and 50, whilst the largest employing over 370 paraplanners and having access to a network of over 691! The upshot being that very few Australian financial planners employ their own paraplanners.
What is really different, however, is the shared ‘hub’ concept, In that, although the majority of paraplanners operate from home under different banners paraplanning firms now provide local ‘paraplanning hubs to allow financial planners to work ‘face to face’ with a local ‘hub’. In other words, paraplanning companies have created workspace hubs for financial planners to use.
The hubs allow financial planners to hold client meetings and have a real-life paraplanner present. Even though, in reality, report writing is predominantly done by a remote paraplanner. These hubs allow financial planners to build relationships with a paraplanner and for a paraplanner to manage a team of ‘report writers’.
What is also evident in Australia, is that for the same way as for financial planning, the hourly cost approach for paraplanning has won the day in Australia. In the UK many financial planners are still pushing paraplanners to provide a fixed price per project and are not keen on the per hour model. I suspect, as with their preference for the Assets under Management fee basis, things may need to change!
I could write pages and pages regarding how Australia is (and has always been) leading the way in financial services, however, if I can only leave readers of this article with one key take away it would be that I believe the future of UK paraplanning will take the form of Paraplanning Hubs. I also believe many of these hubs will be operated by paraplanning firms in partnership with many local advisers.