Paraplanning rarely gets the attention it deserves. Financial planners get plenty of press (not always for the right reasons) but those who sit behind them work in a far more creative field than you might expect.
A financial adviser’s journey often includes a stint as a paraplanner. Brittany McBean, senior paraplanner at Clique Paraplanning, believes all advisers should have paraplanning experience.
“The best advisers I have ever worked with have started as paraplanners. The knowledge and relationships you build are simply invaluable,” she said.
“You will have a greater level of understanding when presenting advice documents; you will be able to answer your clients’ questions with confidence; and the relationships you build with platform support staff, underwriters and BDM’s can help you get those tough clients over the line — it’s all about relationship building.”
Clique Paraplanning is used by over 100 advice firms across Australia who outsource administrative tasks to the group. While there is plenty of competition from tech solutions and cheaper offshore firms, Clique has carved out a niche by creating tailor-made documents for planners who care about the details.
“Tech companies come in and say you can write an SOA in 30 seconds. That can be enticing for advisers,” says Ms McBean. “But after six or 12 months when they start getting negative feedback from auditors, it no longer looks like the cheaper.”
Clique’s head of operations, Jackie Bennet, says she has spoken to handful of advisers who have tried outsourcing their paraplanning overseas, with mixed results.
“There are some great offshore paraplanners, but they can often be very removed from the process and the adviser’s business and clients,” she said.
“Advisers tell me the language barrier can be an issue. But the biggest problem is having to spend time doing reworks and formatting.”
A paraplanner’s role varies widely from practice to practice. A good paraplanner should generate a compliant Statement of Advice (SOA) ensuring that the strategies and products are viable and meet the clients’ goals.
The value to advisers is a reduction in the amount of time spent on backend research and document creation. Outsourcing paraplanning gives the adviser the freedom to focus on building a trusting relationship with the client. Ultimately, paraplanners should save advisers time and money.
Ms McBean says she can see paraplanning eventually becoming a profession in its own right, rather than the poor cousin of financial advice.
“We need to be getting the word out that this is an eligible profession. If you ask what roles are available in the industry, the answers can usually be split into an administration role and an advisory role. Paraplanning is in the ‘goldilocks zone’ for individuals who want to take on more responsibility than a typical administrative role, but are not wanting, for whatever reason, to have a client-facing career. A career paraplanner is best suited to someone who enjoys research and problem solving,” she said.
I’ve always thought that good paraplanners are worth their weight and salaries for the work they do. I also have the view some paraplanners are better at advice than some advisers, however they may not have tje social skills or desire. I for one as a practise owner will look forward to the QAR, I believe this will give our paraplanner more scope and enjoyment at work with letters of advice. I think it’s very important that clients post QAR receive a financial plan or roadmap or letter amd paraplanners will do this work
If QAR gets up I suspect Parra Planning as a career will change. I suspect for the first year or two of the new world, planners will continue with the SOA approach we have now. Until the cost saving and efficiencies of not doing them become to compelling and advisers will resort to a more cut down stream lined approach (What ever that is) I’ll be out by then. But it will be interesting to watch from sidelines.
So, what happens if the QAR is legislated and the need to produce SOAs/ROAs is removed?
The need to produce a document that has legislative structure is removed. I’m pretty sure research, modelling and some sort of document or file will need to be presented to the client. I also don’t think advisers will have the time or the desire to sit in front of Xplan and model the numbers themselves.
not such a good career choice then eh? there will always be a need for some sort of documenation of advice
What licensee is going to allow their advisers to present advice with some kind document and when required, modelling?
You will hear the cheer from the moon.
All the back end work still needs to be done so not much