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Claire Goodwin: Should paraplanning be a controlled function?

At the IFP paraplanner conference earlier this year, someone asked a simple question: “What is the future for paraplanners?”

The professional development of the paraplanning role is one that is evolving quickly within our industry.

That evolution comes naturally with the increased level of qualifications required to do the job but ultimately I believe it will lead to the need for a professional register, something that recognises consistency in our profession.

Like financial planners and advisers, I believe paraplanners should have accountability for their work.

This, of course, means that we should work to a required standard and competency and that we should maintain this standard through continued professional development.

At the moment, anyone can call themselves a paraplanner although we are in good company as apparently anyone can call themselves a surgeon too!

A few years ago, when describing a paraplanner to someone out of the industry there was a standard response, “kind of like a paralegal but in the financial sector”. Not very enlightening.

We have come a long way since then but I do think we can learn from paralegals as to how they define their professionalism.

They have a specific code of conduct, licences are available and there is an Institute of Paralegals. There is no question about what level of qualification they have and like paraplanners they are covered under ‘firm-based regulation’.

But I think we could go further; if financial planners and advisers have to apply for a statement of professional standing, why shouldn’t paraplanners too?

After taking time to produce specific paraplanner qualifications, it would surely be simple for accredited bodies to introduce these as a minimum to maintaining one’s ‘bona fide’ paraplanner status.

One other possible solution would be having a specific paraplanner controlled function on the FSA register. Paraplanners could be authorised as a CF31 perhaps? There is nothing to stop us being any other controlled function we want too but I really feel this is something the FSA should consider.

Allowing anyone to call themselves a paraplanner ultimately leads to confusion and leaves the door open to exploitation from anyone who knows the influence a paraplanner’ could have without having the accountability.

It seems obvious that any firm that works with or employs authorised or registered paraplanners demonstrates their commitment to the future of our profession as a whole.

Claire Goodwin is paraplanner at Taylor Oliver



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There are 3 comments at the moment, we would love to hear your opinion too.

  1. Excellent piece, Claire

    Really encouraging that such an enlightened person is given a forum such as this to set the debate about THE most important aspect of Paraplanning.

    When I started our business nearly 10 years ago I had to explain what Paraplanning was and then why people should outsource it! So satisfying to see the profession progressing.

    We set a benchmark in qualifications for our Paraplanners that they should be Chartered or CFP. Trainee Paraplanners need to be QCF4 as a minimum. This was the easiest way to understand whether they could do the job at the simplest level as we believe Paraplanners should be at least as well qualified, if not more qualified, than the advisers they work with.

    More importantly, they need to be comfortable in a relationship with their advisers where they can be the critical friend – the sense check to the advice being put together. An adviser needs to be really confident in being challenged like this and NOT feel undermined. The Paraplanner is watching their back, after all – there you go – we are the wing men. Great new analogy to use for describing the role.

    The delineation of responsibility is that the adviser sets the strategy the business follows and the Paraplanner considers whether that works tactically for each individual clients.

    Well done, Claire…excellent piece.

  2. Nice piece.

    I agree entirely that a register of paraplanners would be a good idea – but for outsourced paraplanners. Less so for established in-house paraplanners, unless they are looking for a job somewhere else!

    I also agree that this would require a single minimum qualification, like the IFP certificate, or a number of qualifications from a suite e.g. a level 4 tax paper and then one paper in investment, pension and protection of which one must be level 5/6.

    However, I don’t agree that we should be a controlled function. We don’t and shouldn’t take regulatory responsibility for the ‘advice’ that we give, that has to be the domain of the CF30. Plus it would add a layer of cost that I personally don’t see value in.

    As a paraplanner I see myself as wingman – I like that analogy – the adviser can confidently hand off to me the work that takes him away from the client, knowing that I have the competence for him to rely on me.

  3. Christina Georgiou 20th September 2012 at 12:31 pm

    Absolutely agree with you Claire.

    Paraplanners ought to be looking for professional status and for a body that will represent them. The IFP is doing a great job of raising the bar on standards of qualifications and this will surely develop over time.

    The days when Paraplanners are considered ‘glorified admin’ are surely numbered. Ditto the attitude that Paraplanners don’t need to worry about their qualifications or the standard of advice they provide on behalf of Advisers because that’s the Adviser’s responsibility.

    I’m really impressed by the drive of Paraplanners to increase their professionalism, often in the face of reluctance by the Advisers that employ them, and the excellent work outsourced Paraplanners are doing in promoting the role of the Paraplanner and the level of collaboration between them.

    This is the future and Paraplanners have an absolutely crucial role to play in promoting ethical, professional financial advice.

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