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Tony Stevens: When a paraplanner can add value (and when they can’t)

Tony Stevens MM blog

Last week’s article by Richard Bishop raises a number of questions (and undoubtedly hackles too). The first question to answer is “what is a paraplanner?”.

As a career paraplanner, and trainer of many paraplanners over the years, the question is akin to how long is a piece of string?

There are as many types of paraplanner, as there are advisers, and they all require different functions and skill sets. About the only universal constant is the need to write reports, and that “basic photocopying and form filling” is not the mainstay of the job (naturally in most practices it will be an element of it).

This leads on to the second question – how do they add value to what I do?

Most people see these as separate questions, but to me they are intrinsically linked as the type of paraplanner you employ will be dependant on what you want them to do. Consequently the value to your practice is driven by those most fundamental of questions – what do I want, and why do I need it?

Then there is also the hidden question – do I need a paraplanner at all?

Paraplanners of all types serve two basic functions – they take away work that you would do yourself, freeing up time, and they do that work more efficiently than you would do yourself. Obviously there is a whole host of other subjective benefits, but they don’t usually directly result in cold hard cash.

If they fulfil neither of these functions in your practice, then the answer is no, you don’t need a paraplanner. That is not to say you do not want a paraplanner – just that they will rarely be cost effective.

In my years in the field I have come to realise the adviser types who benefit from paraplanners are those that are client rich, time poor and are able to delegate and/or better at client interaction, and who struggle with compliance and the technical aspects in a timely manner.

The practices where it is usually not cost effective, are those where the adviser has lots of free time or fewer clients, and has the capacity to focus on the research, and report writing or those who cannot disengage or delegate. Micro managers undo much of the benefits of paraplanning as the time spent erases these benefits.

Typically those with a fixed compliance regime, such as network members, tend to do well with paraplanners as long as they have access to clients/leads. Directly authorised advisers, especially single adviser firms, tend to have smaller numbers of clients requiring more complex advice. Some benefit from the support a paraplanner can bring, but most do not, although there are obviously some that benefit from outsourced and/or ad-hoc services where a full time paraplaner would not be cost effective.

So if you are considering a paraplanner, the three questions you should ask are – do I need one, what do I want them to do, and what type of paraplanner do I need?

I suspect if these questions were asked then more advisers would get the right type of support and the arguments that rage at the moment, would cease to exist.

Tony Stevens is head paraplanner at Svensoni Research & Consulting


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There is one comment at the moment, we would love to hear your opinion too.

  1. Now, this is actually a well balanced article. Value propositions, mission statements mean not a great deal unless you can and do what you communicate to the end user.

    A paraplanner is like a second striker playing in the hole behind a main striker IMHO.

    Can we please now stop the flood of articles on this subject.

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