The Rise Of The Paraplanner

Published: 21st July 2011
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As the deadline for RDR approaches, there is some controversy over whether the level four qualification is really necessary or even achievable within the set time scale. Nonetheless, it is unquestionable that the rise of the 'new model' adviser has itself facilitated the growth and demand for support staff within Financial Services, in particular the paraplanner.

'Up to approximately 10 years ago paraplanners in the UK did not exist' (Martin Vaughan, The Paraplanner, 3/08); but what is the role of a paraplanner and why has their ascension been so rapid in recent times?

There still remains some confusion as to the role of a paraplanner and how it differs from that of an administrator and indeed an adviser. A number of firms have concerns about people's understanding of the differentiation of the roles, particularly when it comes to their recruitment needs. However, many firms will take different views of the role of a paraplanner and as a result, job titles such as 'research consultant' and 'report writer' also emerge.

Essentially the role of a paraplanner is centered on support for the financial adviser, enabling them to focus upon developing and maintaining client relationships. This will take the form of report writing, research, analysis and recommendations but will entail little in the way of administrative duties. Contrary to popular belief, this is generally and historically performed by dedicated administrative staff.

Before the surge in paraplanning support, most of the research, analysis and report writing was performed by the adviser in addition to his/her client facing duties. There remains a number of smaller firms which maintain this structure in current times; however, increasing strain brought about by the implementation of RDR stretches their resources ever further. From an original 60% of small firms in support of RDR, just 47% remain so (Steve Tolley, Money Marketing, 2/11). Many would agree that paraplanners are at the vanguard and will be a vital resource for firms who wish to become more efficient in the future. For firms which cannot justify the expense of a well qualified paraplanner, there has also been a surge in the manifestation of outsourced paraplanners with a small number of specific paraplanning firms already beginning to establish themselves.

So what for the future of the paraplanner?

Some would argue that the role of the paraplanner has been somewhat undervalued until more recent times. 62% of the paraplanners surveyed by the IFP feel that the specific paraplanning qualifications recently introduced will help in differentiating themselves from administrative staff and set a bench mark for a higher degree of professionalism (Scott Sinclair, IFA Online, 3/10). This helps in the recognition of the importance of good quality paraplanners within the industry.

Many paraplanners also feel that this will help in bridging the gap between themselves and advisers. A study by the New Model Adviser indicated that paraplanners were at least as qualified as the broad adviser populace. With 55% of those surveyed regarding paraplanning as a career preference, and just 22% utilising paraplanning as a stepping stone to becoming an adviser (David Burns, The New Model Adviser, 5/09), the industry is sure to see the growth of both amply qualified paraplanners and highly technical advisers in the coming years. This, of course, is a catalyst for the increase in pay which is beginning to emerge and will be available to well qualified and practiced paraplanners in the future. This in itself will also elevate the status of the paraplanner to an even greater extent and many would argue their preference for a 'Chartered Paraplanner' status to match that of their advising counterparts.

Ultimately, with the ever increasing demands put upon financial advisers in the changing Financial Services world, there are many who feel that a strong paraplanner is worth their weight in gold.

Danielle Lacey is a Consultant within BWD Search & Selection specialising within the Regulated sales division covering the Southern region.

Financial Services News

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