Paraplannning: The next generation

Kim Bendall CFPcm APP FPFSTweet @kimbendall

Key Questions

- What stage are we at?

- Do we all do the same thing?

- The differences between paraplanning and financial planning

- Why paraplanning, rather than advising?

- Would it suit your business?

The Evolution of Paraplanning

Parawhat..?

Why do people need Paraplanners?

- Not everyone does

- Huge increase in regulatory requirements

- Advance and expansion of product and investment solutions and their complexity

- Rise of financial planning

- Recognition of each other’s skills

Diploma levelCFPCM/APP Chartered

CII Certificate

Report writer ‘fills in the blanks’

Very reliant on adviser

Understands products and process

Less input from adviser

Highly technical

Work as partnership

‘Career’ paraplanners

Spectrum of UK paraplanning

Report writer

3-5 years 5+ years1-3 years

In-house Outsourced

80%25-44 years old

56%25-34 years old

66%+are women

How many paraplanners are there?

£46% earn

£30,000 or more per year

Level 3

Working towards Level 3

Working towards Level 4

IMC

Chartered Financiial Planner

Degree

Other

Level 4

Certificate in Paraplanning

CFP Certification

25% 50% 75% 100%

62%

15%

21%

1-56-1011-2526+

38%

21%

26%

15%

6½per cent are

self-employedper cent workfor outsourced paraplanning businesses

6½per cent of

paraplanners are outsourced

13

Career aspirations

Other

Leave industry

Freelance

Become IFA

Remain in role

0% 10% 20% 30% 40% 50% 60% 70%

4%

4%

5%

24%

64%

So what’s the difference between paraplanning and financial planning?

Paraplanning Advising

ConceptsRelationship

Build businessObjection handling

Regulatory responsibility

Design the planCalculations

Client meetingsCompliance

CPDNetworking

Middle Ground

Report writingDue diligence

ResearchImplementationProduct reviews

Gather client data

Regulatory status

Responsibility to Client

Client contact

Earnings Potential

Demographic

Prefer plan creation more than client contact

Greater financial stability

Interpersonal skill development

More methodical than conceptual

Integrating Paraplanners into your business

In-house

Employees

Contact with clients

In-house tools and processes

Employer-funded training

Self-employed or by paraplanning firm

No contact with clients

Supply own tools

Fund own training

Outsourced

Skills and technical competence

Client involvement

A variety of business

Professional development

Bespoke paraplanning

Happier hands-on

Money doesn’t stretch to the right skills

Training takes time and money

Repetitive business pattern

People in the business don’t communicate too well

‘Let’s work as a team so I’ll do it my way’

In-house pros In-house cons

Access to the right kind of skills and competence

You don’t need or want client contact support

Support only when you need it

Comfortable with delegation

Breadth of experience and advice connections

The more bespoke, the more expensive

Your client records need to be up to scratch

Phone, e-mail and via software not face-to-face

Urgent or time consuming cases

You tend to deal in low value transactional cases

Outsourced pros Outsourced cons

Due diligence for paraplanning?

- Credentials

- Experience

- Tools & training

- Future prospects

- Company set-up

- Costs

Things to bear in mind

- You can delegate the task, but not responsibility

- Paraplanners not psychics..!

- Keep paraplanners in touch and engaged

- An adviser’s best friend is a paraplanner

- Encouraging IFP participation will reap dividends

- Combining in-house and outsourced teams works

Little things make all the difference

- Give very clear instructions for the report

- Up to date information – or access to it

- Prepare well in advance

- Aim to minimise repetition of work

Summary

- Could you benefit from a Paraplanner?

- In-house or outsourced?

- Knowledge and experience?

- Costs and training?

- Future prospects for the role?

Thank you

Kim Bendall CFPcm APP FPFSTweet @kimbendall