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