7 questions FT adviser magazine asked me about Paraplanners

by Damian Davies on 07·02·2023

FT Adviser were keen to know what I think about Paraplanners.  I think I may have been a bit grumpy when I was chatting to them!

FT ADVISER MAGAZINE 1.    Paraplanners seem to be in high demand...is there a shortage of people? What's the state of the paraplanner market?

It’s an interesting position.  Everyone wants paraplanners, and firms often say they can’t find a good paraplanner to join their team, so something is askew.

I am not convinced there is a shortage, to be honest.  I think that perception has arisen due to timing.

Paraplanning is a specialist role in a small profession which is part of an industry that makes up a tiny percentage of the country’s population. 

Firms look for paraplanners when they need them.  That in itself really limits the available field to any paraplanner that might happen to be looking for a job at that same moment in time. 

The fact that they can’t find a paraplanner doesn’t mean there is a shortage.

Also, I think recruitment consultants might not be helping.  They seem keen to ‘rebroke’ applicants after 6 months, which creates a bit of a merry go round and adds to the perception of shortages.

FT ADVISER MAGAZINE 2.    Is there such a thing as the professional paraplanner? It seems all advisers want one but do many paraplanners see it as more of a stepping stone towards a career in advice?

As a stepping stone, the paraplanning role can definitely help people who want to gain experience and get qualified and move into advice.  It is a natural environment for learning.  Also, in my experience the best ops people come from a paraplanning background, as it is a role that touches every part of an advice business.

At the same time, it is a brilliant career in its own right as it rewards in ways that roles like advice just cannot match.

The beauty of the paraplanning role is just this variety.  There was a movement a little while ago to try to standardise the role of the paraplanner, and I think that’s a mistake.

FT ADVISER MAGAZINE 3.   Is advice an aspiration shared equally by male and female paraplanners?

There is no reason why advice isn’t an aspiration shared equally by male and female paraplanners. 

I would argue, however, that not every paraplanner has an aspiration to advice.

FT ADVISER MAGAZINE 4.   Why is paraplanning a viable career in itself?

Paraplanning isn’t just a viable career, it’s a brilliant career.

It is such a varied role, you can follow whichever path suits you best.  Whether that be specialist or generalist, working in an office or at home, a hardcore technician or an organised driver of business.  Paraplanning does not have a rigid definition, thankfully, so you can build your own career.

Paraplanning sits as the hub of the business.  There isn’t an area that a paraplanner will not be involved in, which means there is a very rich opportunity to grow and develop as part of the future of the business as a whole.

It suits those people who are able to both look at the details of the case in front of them whilst also keeping an eye on the other bigger picture of cases that are in orbit.  In my experience, diary management is a massively undervalued skill in this profession.

It is a role that suits those people who like to look at both the art and science of financial planning.  Paraplanners often have to articulate complicated scenarios into understandable explanations.  That’s the art.  Behind that will be complicated calculations on planning or charges comparisons.  That’s the science.

Paraplanners often like the same challenges that an adviser does, like helping a client achieve a goal, but they may not like the idea of ‘sales’.  Paraplanners often work with more than one adviser.  This can be an often-overlooked benefit, as you start to see different ways to get to a similar outcome, broadening your horizons and perceptions of what is possible.

Paraplanning is a career that never ends as there is always another case to get experience from, another exam to broaden knowledge and another bit of professional development to enhance skills.  That can be very attractive to people who like an evolving, developing career.

Ultimately, paraplanning is a career where you know you are making a difference to people’s lives, you work as a team all with the prospect of good earnings too.

FT ADVISER MAGAZINE 5.   Is there anything that needs to change to entice more young people into paraplanning as a profession (salaries, education etc)?

I was asked to present to a room of finance undergraduates at Coventry University about what paraplanning is as a career and why I would recommend it.  It’s only when you get asked to do things like that you get the chance to take a step back and look at things with a fresh perspective and realise that it is a very niche way to earn a living! 

As with anything, we need to make a noise if we want to be heard.

FT ADVISER MAGAZINE 6.   How has the role of the paraplanner changed in recent years? Can you describe the ideal paraplanner-adviser relationship.

The role hasn’t changed, as such, but awareness of the role, and perception of its contribution to a business has.

I’ve been doing this a really long time.  Back in 2002 when I started The Timebank, I was having to explain what paraplanning was and then try to explain why people should outsource it.

Today, advisers are more accepting of the value a paraplanner adds to the relationship when they act as critical friend.  This is certainly a reflection of the fact the ideal paraplanner-adviser relationship is one based on good communication and managing expectations.

One thing that does need to change is the way paraplanning is managed.  Too often I see paraplanners or paraplanning departments where the business owners know what paraplanning costs, but have no idea of its value to the business, it’s contribution to the business’ profitability or even have any targets.

FT ADVISER MAGAZINE 7.   Are paraplanners the secret to success for a profitable advice business?

Not necessarily.

I don’t doubt that a financial advice business could be perfectly profitable without paraplanners.  That is likely, however, to be the exception rather than the rule.

At the same time, I have seen businesses with paraplanning departments that might well be profitable, but they have no idea how the paraplanning function might contribute to that.  Profitability has been luck, rather than judgement.

Logic says that paraplanners should be a key contributor to the profitability of an advice business.  Afterall, the idea of a paraplanner is to give an adviser more time to spend with clients.

It’s what clients want too.  The thing clients value most about the relationship with the adviser is face time.