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Richard Bishop: Do I really need a paraplanner?

Richard Bishop MM blog

The debate over the validity of paraplanning in the adviser community continues to rumble on. They justify their existence by telling advisers it is stupid to spend so much time on administration and reports as this valuable time could be used to see clients. Personally, I see admin and reports as part of my job.

On the same basis I should employ a chauffeur as time spent driving could be used to make client appointments. You could use the same argument for 90 per cent of the tasks undertaken by an adviser.

Paraplanners, with the help of the Institute of Financial Planning, are trying to build themselves into a profession. The problem with this brand-building exercise is no-one really understands what paraplanning is.“We do not just write reports,” is the common retort to accusing any paraplanner of doing just that.

There appears two factions – report writers and those who do offer a complete holistic service which could include report writing, research, fund portfolio construction, complex tax and trust work and analysis of group pensions or complex corporate pension schemes.

The majority fall into the first camp. A quick scan of paraplanning websites results in pages offering pension switch reports together with completing all that boring administration.

Like many professions defining exactly what a paraplanner does is difficult, I would suggest they can offer real benefit in supporting an adviser (or team of advisers). But in my experience they never ask the right questions or take the time to dig deep into what the individual adviser needs. Without this process it is impossible for the paraplanner to match the adviser needs with real tangible benefits.

For me to use a paraplanner I need real benefits to my business (in terms of increased turnover and profits). Saving a few hours a week typing reports is not worth paying for. It does not add real value.

Paraplanners need to stop marketing themselves as report writers. They should have far more to offer in partnering with the financial adviser and adding real value to client outcomes and my bottom line.

Richard Bishop is director at Premier Practice


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There are 41 comments at the moment, we would love to hear your opinion too.

  1. Well it’s nice to know that at last I’m not alone. I have been hammered for daring to raise this question. Indeed I too see admin and reports as part of my job. However I certainly don’t type them.
    What is not clear from Richard’s piece is where is the line between what I used to call a personal assistant (or before that when the world was young and not PC – a secretary) and a paraplanner? The work, the ideas and the solutions should be the advisers – otherwise what real role does he play? If their paraplanner does it all then he/she might as well deal with the client directly – then the paraplanner becomes an adviser.

    Let’s see how these fit and remain cost effective in the new highly competitive RDR world.

    All too much for me I’m afraid.

  2. Hi Harry,

    Thanks for the comment. I think all these roles are interchangeable, anyone can call themselves a paraplanner.

    Is my main point – what is one and what do they do. As you say (and I agree) what ever support an adviser uses it needs to add value and be cost effective.


  3. Gents, maybe I can shed some light for you. A paraplanner works alongside an adviser to develop the advice and create a compliant file. It works something like this:

    – You meet your client and discuss an outline plan.
    – Your paraplanner puts the meat on the bones of the plan, conducts the product research, provider research and investment research.
    – In the meantime, you’re seeing a new client – starting the next ball rolling.
    – Your paraplanner, at the end of the process, drafts a compliant report which is clear, succinct, which flows and which covers all compliance points. Some advisers do this well, but others feel it’s not their skill set.

    In addition, keeping tabs on the whole of the market will take up more of your time post RDR – a paraplanner will meet with providers for you and allow you to get on with other things – if you want them to, of course.

    A paraplanner should be heavily involved in the technical side of runnig your business. We are not glorified PA’s. Many of us are more qualified than the advisers we work for and, guess what, we know a thing or two.

    You may have no need for a paraplanner or maybe you’re just a bit old fashioned, but please don’t suggest that no-one knows what a paraplanner is. Who are you speaking for? You might see the benefit in paraplanning if you learned to use a paraplanner properly.

    I agree though that anyone can call themselves a paraplanner and this needs to change; and it will – with time. But don’t throw the baby out with the bath water eh.

  4. This article raises a really good question – do we actually need advisers anymore?

    As a paraplanner in Richard’s ‘second camp’ I can develop appropriate client solutions as well as write the reports. We have a great administration team that keeps the client relationships running smoothly, the appointments coming in and business being processed.

    Do we really need the salesperson anymore?

  5. Not sure that you can argue that having a paraplanner is on par with having a chauffeur etc.

    You also say ‘In your experience’ you have never found a para that asks the right questions. Well, Richard I would suggest your experience is limited.

    A paraplanner can be whatever their company wants them to be. This flexibility and adaptability is vital for advisers. Personally I attend client meetings with the two chartered consultants I work for. I also write reports, rebalance portfolios, undertake through product research, hold meetings with insurance company consultants to keep abreast of product launches and details, carry out detailed tax planning exercises. Most importantly I am a sounding board and devils advocate in ad-hoc discussions with my advisers over client cases. I suggest paras are a very useful tool to ensure advisers remain thorough and compliant by regularly challenging them.

    Your paraplanner can be anything you want him or her to be. They are ever increasing in popularity, gaining recognition, and being rather well remunerated.

    Ok so for many it is a stepping stone to becoming an adviser (how else do people get the experience needed) but career paras are growing in number.

    Rather than the paraplanning fad dying out I think we will sooner see the administration role dying out

  6. Alan Gow. I agree entirely with your comments.

  7. I wonder if Richard Bishop’s clients would be happy to be paying his hourly rate (£150 per hours?) for him to complete admin? I know I wouldnt.

    I never used to have a paraplanner but that was when I first started up. As business levels and my client bank increased, I’ve since took one on which has helped me grow my business still further.

    Business must be slack at Premier Practice.

  8. Hi Alan Hi Matt

    Thanks for the comments. – What is a paraplanner and what do they do is my point.

    If you FSA authorize a paraplanner are they now an adviser?

    The roles are totally interchangeable in terms of reports, research and skills in that area.

    Is not the IFA the client facing part, the networker? The person who can bring clients in. That is another skill set on it’s own.


  9. @A

    Its far from limited – I could list the paraplanners I know. There are many.

    I don’t agree, with the possible move to restricted – the paraplanning function could contract.

    Don’t forget much of the PP role is because of the FSA. Who, agree the client dosent read what they’re given.

    If the FSA reduced the paperwork would it not follow the role of the PP would lessen.

  10. Hi Ross,

    Thanks for the comment. Yes, I work from the spare bedroom, not a Plc IFA 0)

    I agree that is an issue going forward for many IFAs. I’m hoping the FSA sees it that way and cust down the admin for us and the cost to the client.

  11. R.E. Anonymous @ 10:24 – “Rather than the paraplanning fad dying out I think we will sooner see the administration role dying out”

    I disagree, paraplanning IS administration, albeit with a snappier title. New administrators will deal with general admin, whilst more experienced and qualified adminstrators take on the “paraplanning” tasks that you refer to.

  12. Clearly from reading what Richard has written I can say 100% he needs a report writer. His writing is poor and his grammar and usage abysmal. An experienced paraplanner could have perhaps helped him develop a coherent argument and turn it into something interesting and thought provoking to read. All I can say is roll-on RDR so these industry dinosaurs can prove their obsolescence and a new generation of forward thinking Advisers can take their place.

  13. @Richard

    “Authorise” is the way we spell it in England – can you turn your MS Word dictionary to UK English please.

  14. Richard

    The reason the clients are not reading the reports are because they are being written by advisers whose skills lay elsewhere. There are simple ideas and techniques which a good paraplanner will employ to make the report more readable. Don’t forget this report is a client interaction from which a client will form/ amend an opinion about you and your firm.

    If you feel that the ‘PP role is because of the FSA’ you haven’t been paying attention. PP carry out all sorts of tasks some of which have been listed above. Mine also does cash flow planning. I have no idea how to do it but love the results as do clients. Better still, clients get charged at PP rates for this rather than adviser rates.

    If you and Harry love research, constructing a plan yourself, carry out tax calcs etc, knock yourself out. Personally I leave these things to people who specialise (apart from the financial plan where I do believe two heads are better than one) and I get to meet clients. Each to their own I suppose.

  15. As an industry – rightly or wrongly – we are aiming to be held in the same light as solicitors et al.

    Solicitors make full use of highly qualified legal secretary’s to do a lot of the work for them.

    I suppose the bottome line is whethere or not it fits your business model though – it will work for some and not for others.

  16. Hi Keyte,

    I know, my spelling and grammar is appalling. You will have to blame MM’s spell checker I dont type these comments into word.

    You seem upset?

  17. Hi John,

    Thanks for the comment. I would argue the FSA wants simple reports. We as an industry tend to go ‘belt and braces’. I have used a PP and got back a 30 page document not for purpose.


  18. glad to see another list of comments descending into advisers over-reacting and getting all personal, the quality ( or otherwise ) of Richard’s grammar is , I suggest, totally irrelevant but as usual, someone states an opinion and a couple of comments suddenly appear which are neither helpful nor constructive. Lets stick to discussing the opinion , and the content therein , without resorting to childish comments

  19. Hi Richard

    I didn’t realise you worked from your spare room at home. Many of us have been there. It does seem that the one man band type firms such as yourself and Harry Katz do seem to fall into the anti-paraplanner brigade.

    Hopefully over time your business can grow to the point that you won’t have a choice, you will simply need to delegate your work to others. I know if I took the same approach as Harry and yourself, my wife would leave me!

    P.S. You do seem to have found a contentious topic on the MM boards!

  20. The approach to this is all wrong, the question is what controls and audit trails does an adviser firm have in place, what steps did they take with the client to come to their conclusions and what process was used to come to the decision (and how is this documented).

    It’s then up to the adviser whether they have the spare time or technical skills to do all these to ensure best practice and risk to their lively hood of regulatory action.

    If they don’t have the time or capacity then a paraplanner, admin, compliance or portfolio manager can help them at any stage, its upto the adviser to determine who they delegate tasks to.

    Its about working as a team to deliver best advice, essentially its the sum of the parts.

  21. Hi all,

    I don’t tend to comment on these type of threads because there is always a shed load of us paraplanners having a whinge about an adviser that doesn’t necessarily value what we do. We know our value and so do those that employ us. This is one of the more cogent advisers who has actually taken the time to review and understand the service we can provide and then decide it is unsuitable for his business model.

    Not every planning business needs a paraplanner. But I am also of the mind that more and more planning businesses could do very well without the traditional ‘adviser’.

  22. Hi – All,

    Not sure size matters, thats not what my wife tells me. I do agree IFAs like me I think the phrase is Lifestyle IFA shouldn’t need a PP.

    Not sure thats true.

    Most PP I know are very skilled, knowledgeable folk who I would love to employee.

    I cant afford them, or my clients cant afford them should I say in the Fee world.

  23. @Matt Jones

    For me Matt has hit the nail on the head. Is the Paraplanner really the adviser and the adviser just a salesman? That answers a lot of questions and the light has dawned.
    In which case the whole thing is turned on its head. I am therefore a directly authorised and fully qualified paraplanner. And I am not being in the least facetious or disparaging. Perhaps the prefix ‘para’ can be dispensed with? After all para means beside or adjacent to. Perhaps in reality it should be Para-adviser for those advisers who use paraplanners?

  24. Is a paraplanner simply an IFA without any clients?

  25. @mattjones – Thats a great point Harry makes.

  26. I’m not an expert but from my experience a para planner is an IFA without the interpersonal or selling skills…. or rather doesn’t want the task of a client facing role, selling or generating business… and from what i see they tend to be a lot more qualified than the IFA… without them the IFA probably wouldn’t get half as much done…or even have the credibility they portray.

  27. @A – Is a paraplanner simply an IFA without any clients? Great comment

    Hi Jane, thanks for the comment. I think you could be right, PP more academic – IFA more sales?

  28. Like most things it is about what suits your business requirements and indeed if you choose to have a Paraplanner in your organisation how best to use them.

  29. The clue is in the name. IFA’s who just flog products, arrange investments etc need a report writer. End of.
    PROPER Financial Planners need a Para Planner, a fellow professional, who works alongside the ‘Planner’ to create a meaningful Financial Plan BEFORE any mention of suitability reports or any financial product.
    When will the ‘industry’ wake up.. financial planning has nothing to do with the sale of, or implementation of a financial product. Only a few short months left before wake up time. Video available here:

  30. IMHO a paraplanner is like a second striker playing in the hole.

    @Sean – re becoming like lawyers – god forbid. hopefully a hell of a lot better – set the benchmark high!!

    Richard is really getting all interactive over this article.

  31. I think the issue historically has been one of what is the definition of a para-planner? To some it’s a technician’s role, for others it’s the admin’ side of the advice process.

    Having mulled it over for some time I think its’ closest parallel, without any pun intended, is that of a Doctor and Nurse. They are specific professions, academically linked and with a common objective but very distinct.

    In our practice my partner is also my para-planner and she is more qualified than me. She enjoys client contact and effectively both manages and implements the process; oils the wheels so to speak. This may be easier in a smaller firm but she is the link between our administrator [pure admin’] and me [pure advice]

    Do I need a para-planner? I could [have done] do it myself but our model feels more efficient with skills and attributes being matched to the required tasks.

  32. @Paul, I know lots of financial planners who don’t do any planning. Love to get paid for planning. My clients won’t pay several 1000 for it. Tried for 6 months. I have to eat and so does my family.

  33. Hi Duncan – Thanks for the comment. I think the definition and what IFA does vis a vis PP are blurred.


  34. Alistair Cunningham 16th October 2012 at 7:48 pm

    When you employ more than one adviser something happens. Opinions creep in. Bias, preconceptions and assumptions become more obvious.

    Having a paraplanner, divorced from the case, following a pre-defined process can mitigate these issues. Advice becomes more consistent, and any gaps in an adviser’s skillset can be plugged.

    Having a team based approach to advice should result in better client outcomes. Given the choice would you rather have six eyes or two eyes prepare and check your advice?

  35. RegulatorSaurusRex 17th October 2012 at 7:33 am

    Why would any self respecting professional adviser hand over important work to someone who will pay no price for being wrong?

  36. A financial planner is someone who sits down with his/her client, recommends, explains and implements plans to meet agreed financial goals, regularly reviewed and tweaked over time. This involves the use of financial products, which the financial planner knows a lot about.

    The paraplanner creates the initial plan for the financial planner to ratify, very often doing the data gathering and business processing too. He/she sits alongside the financial planner and enjoys researching products and funds and ticking compliance boxes with well written reports.

    They have a lot of skills that overlap. They have a lot of skills that are complimentary to each other. Combining these skillsets is very sensible.

    An IFA looks for people with money but without financial products that he/she can sell to them to earn commission. An IFA doesn’t need a paraplanner because he/she doesn’t do any planning.

  37. Having worked with and without a paraplanner I would recommend employing their services as they help reduce stress levels.

    As the industry moves into the RDR world next year one main concern as a smaller IFA practice is not who will assist with my admin, but wondering if I’ll be able to obtain my PI cover.

  38. My that’s a very broad brush you are wielding there! I am a career paraplanner – i turn down at least 3 advisory positions a month. I enjoy what i do and am well suited to it, and create significant value for my bank of advisers (which i can empirically prove but thats not for a general forum debate) – and you have just suggested that i have no worth or value?

    There are 2 issues at play in terms of “paraplanners” – first is the continual one of the label of paraplanner being applied to all and sundry – my persoal view has always been that to be a good paraplanner you should be at least as technically competant as an Adviser and have a preference for detail (i.e. an adviser but instead of being good with people they are good with facts and figures)

    Secondly is that contrary to popular opinion, only maybe 20% of advisers benefit from having paraplanners – if you are tecnically minded and have time to write reports, and are confident about doing so, then you don’t need a paraplanner. If you are not busy and struggle to generate work – don’t use a paraplanner. If you are so busy you can’t find time to yourself, THEN is the time to use a paraplanner – what you are willing and able to pass over will determine what the paraplaner does and the costs. I have clients who want control over every aspect right up to the point of compiling a report, and i have others who send me a factfind and say – tell me what to sell – it’s horses for courses.

    So while you can certainly suggest that Paraplanners have no use for you personally there are many out there who would benefit from paraplanning – provided the advisers understand whether it will help them or not – and provided paraplanners are brave enough to turn away those for whom paraplanning provides little benefit.

  39. Waow. Nearly as many comments on ths one as the blog on MM that Sants resigns. Anyway in my view the question should be Is it not ridiculous that we have got to the stage where some IFA’s actually need a para planner? What happened to the good old days where the fact find was only 12 pages long and the suitability letter only needed to be 3 pages long? in 99.999% of cases, clients these days are no better off with the advice given than 20 years ago. The same plan with same funds would have been sold then as now. The only thing is that clients pay more for it now and unfortunately this increase does not come to us as increased profit. It goes in regulatroy fees in their various guises. It is disgusting it has come to this and its time to pull waaaaaay back on the paperwork and cr*p that goes into the suitability letter. Even the FSA now recognises and admits there is too much in these. Big lol at that one as its they who are responsible for the vast increase in the content of the the S L. Maybe they just dont realise the consequences of their actions and statements. Now where have I heard that phrase before……?

  40. The answer to yoru original question is this. If an IFA feels they need one as it increases prodcution of new business beyond the cost of the PP then YES and its not open for debate. Just thought to through that into the mix.

  41. What concerns me in respect to paraplanner is the lack of qualifications with some of the people offering this service. There are course many paraplanners who are highly qualified and have chosen to go down this road, instead of having to do with face-to-face client, but there are also many paraplanners who hold very little qualifications.
    I see from some comments from paraplanners in response to this article that they question the need for an actual adviser well, the fact is we are the ones hold the qualifications and ultimately take responsibility for the advice. If paraplanners are to become an integral part of financial services which I believe is going to be the case in highly regulated industry, then they need have a minimum qualification levels for people offering this service e.g. level three qualifications.
    They should also never be allowed to give face-to-face advice as this would clearly breach the RDR requirement level for diploma level qualifications and I can see some people trying to use this as a way of circumventing these rules.

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