The ROI of Outsourced Paraplanning

Is there a clear ROI of outsourced paraplanning?

Given the choice most financial advisers would probably opt to have their own paraplanning staff on hand at all times to deal with their financial administration and report writing requirements. In truth, for many this is simply not viable.

This article deals with the simple maths. This pure financial argument for outsourcing your paraplanning. It does not deal with the emotive preference of human beings to have work colleagues, who they can build long term working relationships with. In truth this phenomenon is a relic of the 20th century and the reality today is one of a “gig economy” where various “self-employed” people co-ordinate their efforts to deliver a single service. I won’t even go near the motivation issue or the need to worry about employment legislation, leaving that to others much more qualified than me.

So, let’s start with the simple maths. A “typical” level 4 qualified paraplanner is going to demand a salary of £35,000 to £45,000 in most parts of the UK at the moment. Add on a further 20% to cover benefits and national insurance and we are looking at £42,000 to £54,000 employment costs.

If we build in the likely £5,000 plus recruitment fee, the wasted first month or two while they settle in then stick another £10,000 first year costs onto this total. Oh, and don’t forget the additional £200 to £300 per month additional office space costs.


The ROI of Outsourced Paraplanning – Delivering a return on investment? For ease of comparison though let’s go with a £45,000 total cost.

You are now paying £3,750 per month, every month, however, you have your own dedicated in-house paraplanner ready to get to work, great. We need to now understand what you are getting for your money: 225 days per annum (after deducting 25 days holiday, 8 bank holidays and 2 training days), ignoring sick days.

You now also need to factor in more of that boring human equation stuff, a paraplanner will not be happy spending time making your cups of coffee or making your appointments for you. They are a professionally qualified paraplanner and want to do paraplanning; report writing and research in the main (also, please note, that those £20,000 ISA reports get so boring after a while too). They will also very rarely do seven straight hours of work in a day, with interruptions eating an hour of most people’s working day.


The ROI of Outsourced Paraplanning – Delivering a return on investment? For simplicity let’s say £30 per hour total cost.

So, if you have not got 1400 hours of quality paraplanning for them to do every year then expect their fingers and mind to wander around the internet looking for that challenging role they really want.

If you have got 1400 hours of paraplanning for them to do then brilliant, you will save the need to spend between £60,000 and £70,000 in outsourcing your paraplanning to the Paraplanning Hub, based on our listed outsourced paraplanning fees.

If, however, you or your firm does not have a regular flow of 30 cases per month to keep your paraplanner busy then maybe you could save yourself a chunk of money and hassle.

Our “typical” adviser client is a one or two-person practice, some home based and some with a small office out of which a part time administrator works. They do about 100 cases a year, from ISA top ups to pension transfers and a whole bunch of rebalancing investments. In truth therefore, they normally have a maximum of 400 hours of paraplanning a year. Even if they outsourced all of this, which most don’t, this is still only a maximum of £20,000 a year in paraplanning fees. That is less than 50% of the cost of employing one in-house.

Our typical clients also get to pick our brains and call upon us regarding the many examples of work we deal with. They also get our opinion on various industry matters. They get to know us, and we get to know them. We build up working relationships and we allow them to spend their time doing what they are good at, advising clients. Most of all though, they only pay for the paraplanning they need. They are then free to go on holiday or have quiet spells without the need to pay a salary and keep an idle mind from getting restless.

The upshot is, outsourcing gets a bad press and as much as I agree, it is not as nice as having someone to share a cup of coffee or weekend warrior stories with, it is very cost effective for most.

The ROI of Outsourced Paraplanning – Delivering a return on investment? – Food for thought?

So if you fancy a chat about your paraplanning needs please feel free to get in touch for an initial chat.