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Nick Bamford: Why you really do need a paraplanner (and other support)

Richard Bishop engendered a lively debate this week with his piece Do I really need a paraplanner? Contributors put forward their arguments both in support of the need for a paraplanner and against such a role.

Certainly one of the things we have noticed is that since the paraplanner role has developed recruitment agents have realised it is better to describe an “administrator” as a “paraplanner” because that way a higher salary might be demanded (and of course the agency fees will be bigger- or am I being too cynical?)

In my experience a co-ordinated team will be able to deliver better financial advice to the consumer than an individual adviser is able to do.

I appreciate that many advisers do indeed perform all of the tasks associated with advice delivery, administration, technical and research, advice construction and advice delivery, but after 38 years of doing this I cannot recall ever meeting an adviser who was really good at all of those things.

In fact I would go even further by saying that even with all my years of experience and level 6 qualifications I feel much more comfortable not being solely responsible for the construction and delivery of advice. Much better in my view to have multiple pairs of eyes examining the whole process to ensure that the most suitable advice is delivered to the client. The added benefit is that such an approach means that thinking can be challenged- very healthy.

The administrator has as vital a role to play in the delivery of advice as does the paraplanner and the financial planner. Each has different skills, experience and knowledge to bring to the mix.

The challenge is to make sure that no one feels “out of joint” about who does what. In our team we have very clear demarcation lines between the roles. Our paraplanners are not authorised and regulated individuals but they are expected to have qualifications at least as good as the financial planners.

Our paraplanners and financial planners are not expected to perform administration tasks, in the same way that our administrators are not expected to carry our product research or write technical copy and reports.

What we have learned is that this team based approach is commercially very sensible. Why have one person trying to do everything when by dividing up the task business efficiency (and therefore effectiveness) can be achieved?

Let the financial planner be responsible for engaging with the client and carrying out the know your customer exercise. Let the administrator be responsible for data gathering, capture and storage and then let the paraplanner interrogate that data and produce the advice report.

The production of that report not being in isolation from the financial planner but collaboratively with him/her. The financial planner should be the skilled person who is then responsible for the delivery of that advice and yes, of course they need to know how and why it was constructed so that they can answer the client questions as they arise.

The same approach can be adopted for reviews where the three parts of the team take on their skilled roles but it is the financial planner who maintains the relationship with the client. This also facilitates the approach of signing off advice before it is delivered to the client as opposed to the rather archaic  approach of a sign off after the event which seems to me to introducing an undue degree of business risk.

This tripartite approach can also be enhanced where other parts of the delivery are centralised for example product and fund research. Taking these two activities away from the adviser also helps to protect against the occasional erratic  behaviour  when a totally unsuitable fund or product is sold to consumers

I empathise with the sole trader here. Taking on a member of staff is a significant and potentially costly step. It can only work if the productivity of the financial planner increases as a result of the introduction of the paraplanner. In most cases the first recruitment step is typically the introduction of an administrator. Where this team based approach won’t work is where the financial planner is so reluctant to let go of the non-client facing activity perhaps as a mask  for client inactivity. Or where perhaps they feel their role will be reduced in value if they have to give up administration or report writing.

All businesses are different and what works for one may be inappropriate for another but in my experience the paraplanner has a growing and important role.

Nick Bamford is executive director of Informed Choice


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There are 15 comments at the moment, we would love to hear your opinion too.

  1. As they say – if it works for you – great. But this rather looks as if you are trying to convince yourself rather than others.
    I don’t for one minute doubt that a well-trained team can produce good results, but we are in a competitive world. You clients pay for an adviser, and administrator and a paraplanner – in addition to all the other overheads. These people need to eat, so are you making a mountain for yourself to climb? You have GOT to have the throughput. Presumably you work very hard at client acquisition. Can you afford to turn too many away? How much have you to make just to break even? It would seem you have firmly placed the monkey on your back.
    I won’t debate the assertions you make with over 30 years of experience – only to say that things change, technology helps and it is the exception that makes the rule. But overall clients want a cost effective service and if it is 16ct instead of 18ct are they bothered? Perfect is always worth striving for, but often a good workmanlike job will also do. (Just ask the Regulator!)

  2. What this debate really shows is that there is no one way to operate a business. It also needs to take into account that the vast majority of IFA’s are one man outfits, which also dictates a level of business that sometimes does not need or warrant any form of admin support. The minute your turnover increases so does your need for support and to be fair support staff come in all guises and if they are good enough they almost do anything. Some good points Nick, my only issue is that sometimes people get carried away with titles and I believe if your business needs support or you want to increase your t/o and profit, look at the support you employ as an investment in your business not a cost!

  3. As Harry says whatever works for you.
    I cannot get out of my mind the old cliche about the camel being a horse designed by a committee. If my name is going on the advice then I want to make the choices,decide on the presentation etc. Can well see the point of paraplanners but as a sole trader, also level 6, I prefer to do it myself.

  4. Horses for courses, as ever. As I get older (and hopefully a little wiser) I’ve begun to realise that I need to enjoy my work more – which means focussing on the parts of the job that I like best and getting help for (sorry, correction – NOT DOING) the other bits. The ‘other bits’ will, of course, vary from adviser to adviser, which is no bad thing.

  5. I totally agree with Blair. I have been in the Financial Services for over 37 years and prefer to be in total control over advice and administration, especially giving Mortgage and Protection advice.

  6. From the perspective of someone who works in one the large life offices as a consultant I see a HUGE variation in what a paraplanner does, as mentioned some are just really admin people with a fancy title, others are exceptionally switched on with all the current product changes and options on the plan.

    I also agree, view these people as an investment, if your paying someone £8-9 to key applications online to generate online commission as its easier for you then surely its a cost effective decision.

    If your paying them to call a life office and to answe rthe phone then its a different game altogether

  7. @Harry Katz

    No it was you I was trying to convince (unsuccessfully) I already am convinced. So basically you are anti-social media and anti- Paraplanners if you could let me have a short list of everything else you are anti I will avoid commenting upon those subjects?

    “All businesses are different and what works for one may be inappropriate for another but in my experience the paraplanner has a growing and important role”

    I just had to check to make sure it was me who said that…. oh yeah it was

  8. Just a thought, but if you hope to build a valuable business, a team approach and playing to each member of that team’s strength’s is essential.

    If you run a lifestyle business then it’s totally down to what works for you.

    Depends on your focus, but the most successful businesses in this country and globally, work to a team approach as advocated by Mr Bamford here.

  9. A well-written and thoughtful precis. Kudos, Nick.

  10. @Nick

    As far as para planners are concerned I think I established in a previous article that I am by current consensus a paraplanner that engages with clients. I’m just not a salesman. I just don’t need a para Adviser tagging along.

    As far as social media is concerned, that is a whole other debate. Personally I think it is a potential force for evil. I also think that it could well be a fad that will eventually run its course – particularly when the adverts become intolerable.

    I didn’t just eschew this willy nilly, but did go into it in some depth. The clincher was when I canvassed my clients. Only one uses social media. So obviously we inhabit different spheres. But again – if it works for you…

    You certainly don’t have to restrict yourself to those topics on which we don’t agree (Indeed that comment was unworthy of you).

    There are perhaps topics on which we are very well aligned. Independence for a start.
    As you yourself so aptly said ‘businesses are different’. I don’t want to build an empire and like Blair I too am a Level 6 Sole trader who does agree with the points he makes – in my case.

    I have purposely not expanded my business (which has been running in its present unchanged form) for 22 years, as I don’t want to become a ‘nanny’ looking over the shoulders of others to ensure that they don’t do anything daft and sink my business. If my business sinks I would rather do it myself!

    The main point of my post concentrated on cost. I have always believed in the mantra ‘Profit is sanity, turnover is vanity’. I’ve had my time as an employer, but in manufacturing it is much more of a necessity. I also know –from my pretty long experience that one of the biggest problems in a business is invariably the staff. I have been lucky. Even now the few I do employ the shortest tenure is 14 years.

  11. What’s in a name? My job title is ‘administrator’. I am a diploma qualified invidual with level 6 qualifications. I write reports, do investment research (which includes trips to London to meet fund managers), I keep the suitability reports up to date, i interpret compliance guidance, i research existing investments, prepare valuations, meet with providers, help formulate ‘best practice’ for the company etc I feel that I must be of use to the company, otherwise I wouldn’t employed. I don’t feel that my job title is of any consequence. Interestingly, I met a ‘paraplanner’ 6 months ago who had less than one years’ industry experience, didn’t have any level 4 qualifications but had business cards proclaiming her ‘senior paraplanner’ role…. I think that it’s a case of ‘horses for courses’ – if you operate on a certain scale and want a life outside of work, i couldn’t imagine how you could cope without some form of assistance.

  12. I think you are bang on the mark Richard. This is what our business is all about. It is how we provide such a good service to our clients.The financial planners can focus on them and develop a relationship while admin and para’s support that process. We all have a say in the meetings and we all shape the business. We all give each other feedback. I’m not surprised many people on here don’t agree with you though. I think they are blind.

  13. @Harry Katz

    My apologies I always try really hard to be worthy sometimes I fail to achieve that state.

  14. I’ve come to this blog late but aired ny thoughts following Richard Bishop’s earlier article.

    One aspect that does sadden me however is how quickly some of these blogs turn nasty and personal. I have broad shoulders and like to think I can give as good as I get but often it’s just unseemly.

    We want to be viewed as a profession but that is a state of mind, actions and qualifications.I recently saw a blog on Accountancy Age about the merits or otherwise of tax mitigation schemes (sad I know) There was a wide divergence of views but it was a civil debate.

    And there were no anonymous posts!

  15. I agree with most of your points, Nick.

    I wonder why some seem so against taking on the assistant of a para or administrator. Okay, “whatever works for you” certainly does apply, but those that are reluctant to pass responsibility for certain key areas to others have a problem relinquishing some control and dress this up as a problem with paraplanners themselves,

    Hire the right person, help mentor them if necessary, let them grow into the business, build the trust and you have a winning formula.

    Job titles are irrelevant. I am a paraplanner working in a company that has been established for 30 years. There are other paraplanners within my firm, but they were hired many years before the job title existed, hence they are called client service assistants. They do the same job as me. What is in a name? Nothing, it is how your support staff work for you, not the names they are given.

    As I have commented on previous columns, the para/assistant/administrator will fit in around the business for whatever purpose you need.

    If you need the help, there are plenty of apt people out there that can really make your life easier.

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