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The year of the paraplanner

The role of the paraplanner is going to be vital after the RDR, says Julie Hepworth, group regulatory manager at Perspective Financial Group

A quick Google search tells me 2012 is the year of the dragon according to Chinese astrology. I am unclear what this means for the advisory profession but it seems those who are born as dragons are “driven and unafraid of challenges”, which neatly sums up what IFAs have always needed to be.

Speculating on what 2012 will bring seems futile, especially if we are looking for insight into how the financial markets and the eurozone crisis in particular will pan out. Numerous experts suggest markets will remain volatile and that quality financial advice will continue to be in demand as a result.

Much of 2012 will be spent putting the final touches to our preparations for the retail distribution review and beyond. Some IFAs will be confident they are on track while others will know they have much to do. 2012 is going to be the start of some big changes for the entire profession.

The Tomorrow’s Client conference and the recent Money Marketing RDR invitational got me thinking about how the inevitable changes that firms have either already gone through or are having to go through to be able to thrive after the RDR will affect job roles.

Advisers are going to have to accept that clients may hold certain parts of their service experience in higher esteem than others. For example, research revealed at the Tomorrow’s Client conference showed that clients place the greatest value on the meetings when advisers explain their recommendations or solutions. They also place ongoing value on their long-term relationship with the adviser. In contrast, advisers value highly the time they spend preparing the financial plan – something that is valued much less by the client.

You could argue this is because the value of the financial plan has not been communicated well in the past but, whatever the reason, there remains a disparity in our industry between the perception of value in the eyes of the client and of the adviser.

Perhaps now is the time for the advisory profession to take this research on board to maximise the delivery of what the client values and to delegate those tasks that are not valued so highly by clients.

I am not suggesting that preparation of the financial plan is not important – indeed, it is the crux of the actual service being provided. However, we do have professional individuals who could fulfil this task with no drop in quality. Enter the paraplanner.

Whether some advisers would like to admit it or not, the traditional model of an adviser spending hours conducting research and dictating their suitability reports to their PA is thoroughly outdated. For some, it will be hard to let go of the comfort and familiarity of the old ways but the new world beckons and ways to survive and thrive need to be found.

A quick look at the alternatives to this approach should convince even the most strident traditionalist of the leverage that can be achieved. Having highly qualified, experienced paraplanners to whom elements of the advice process can be confidently delegated will be key to a successful RDR-proof business. Many firms have already recognised this and I believe many more will come to the same conclusion over the next 12 months.

How can this new arrangement work in practice? First, sharing know your customer information through regular dialogue with a paraplanner will help ensure thorough research is conducted and accurate reports and recommendations are produced. The adviser has freed up his or her time to focus on those areas valued by clients.

Advisers should be conducting more in-depth client meetings where the recommendations are outlined and also increasing the number of regular review meetings with clients. No one is suggesting advisers meet with clients once a week or even once a month but perhaps there is an argument for a quarterly catch-up or twice a year.

Now is a great time for advisers to use paraplanners and I believe next year will be a golden age to be a paraplanner. It seems obvious that highly experienced, well qualified planners will be snapped up by those businesses with the foresight to realise paraplanners will be crucial to their success. Forget 2012 as the year of the Olympics, 2012 is going to be the year of the paraplanner.


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