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Advisers welcome being challenged by paraplanners

Advisers have welcomed the FSA’s suggestion that paraplanners should challenge advisers over suitability letters and fund switches to ensure client needs are met.

Speaking at the Institute of Financial Planning paraplanner conference last week, Chris Hewitt from the regulator’s investment intermediary department said paraplanners should be looking to examine what the objectives of clients are with regard to centralised investment propositions.

Hewitt added that paraplanners should also question the validity of fund switches.

He said: “Paraplanners should question whether there is a valid justification in light of the client’s specific needs and objectives and the potential additional costs involved.”

Yellowtail Financial Planning managing director Dennis Hall says: “I agree with the FSA, I think it is part of the paraplanner’s job to check the suitability and work with the adviser to ensure clients get the best possible outcomes.”

Cambourne Financial Planning director Mark Loydall says: “I think if it is part of a firm’s culture for paraplanners to question advisers on suitability, then that has got to be a good thing. Paraplanners are often younger and this is a good way for them to grow and express their opinion.”


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There are 7 comments at the moment, we would love to hear your opinion too.

  1. I have an experienced paraplanner who used to be an adviser. Surely via the loss in experienced advisers through RDR, there will be opportunities to obtain experienced support. Although these guys may not have the qualifications their knowlege in many occasions should not be questioned. As long as they can master technology or get support from other staff.

  2. who’s giving the advice the qualified financial adviser or the unqualified paraplanner?

  3. Andy Froggatt 1st June 2012 at 3:18 pm

    Surely getting support from a paraplanner is great. Input from any source is usually beneficial. As to qualifications, in August when the new input of Drs appear 8%, more deaths occur. Nurses usually pull newly qualified Drs backsides out of the fire, but they are aren’t qualified Drs. Experience counts.

  4. @ Peter Herd

    Many paraplanners today are equally as well qualified as their IFA peers, better in many cases. There is also now a recognised paraplanning qualification.

    We are not suggesting that the paraplanner gives the advice, just that a second set of eyes are cast over a case to ensure the best outcome for the client. Has to be a good thing surely?

  5. @ Peter Herd

    Of course the adviser is giving the advice (in terms of taking responsibility for it), but surely if an experienced and well qualified paraplanner is having input around solutions / suitability etc this should reduce the possibility of unsuitable / incorrect advice being given? Two heads are usually better than one, and in this case, it makes perfect sense for a paraplanner (who may be doing much of the ‘nitty gritty’ work on a case) to be able to express an opinion and have their say.

    Far too many advisers (wrongly IMHO) overstimate their own abilities and underestimate the value of a well qualified, experienced paraplanner at their side.

  6. man on the moon 4th June 2012 at 10:41 am

    @ Derek V
    think you raise a number of fair points.

    a lot of unqualified RDR advisors will either become ‘introducers’ or protection advisors or both.

    many paraplanners are better qualified than advisors they support but the big difference is who has the clients and ability to get clients?

    I myself may have to seriously consider a paraplanner role as although qualified etc do not have the required client base that is necessary.

  7. I agree with all of the comments above, especially in relation to Peter herds comment, but I’m going to say what I think the others are too polite too, Peter your comment smacks of arrogance!

    Arrogance in my opinion is part of the problem here, too many IFAs are underqualified and don’t have the experience. Of course they won’t admit that, but see it as a bit of an ego kick when there paraplanner would seem to be offering a better solution.

    It’s a mindset a lot of this, many claimed to have all the experience when the FSA up’d the level to 4, bemoaned the study etc….. Then failed. If you really know your onions, shouldn’t require much study (more knowledge fill) and then fly through any exam….unless of course………!

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