Chief executive officer Chris Smallwood says that although paraplanning does play an important role in financial planning, there are other alternatives to employing more paraplanners.
For many smaller and directly regulated advisers, the cost of employing a fully qualified paraplanner is now over £30,000 per annum.
Smallwood says: “Clients understandably perceive much greater value around spending time face to face with their adviser, helping them achieve ongoing goals and having options properly explained, so building a trusted relationship.
“But employing additional staff for the paraplanning function needed to allow advisers to do this is simply an archaic route to take.
“What is the point in having all the high-tech, on-tap, scaleable solutions at our fingertips if we still revert to costly and outdated methods of achieving this?”
“Choosing a centralised technology-led route, with chartered experts on tap, not only makes fiscal sense, but on a broader commercial level it also means that some of the very highly competent and qualified paraplanners can then be up-skilled to become fully qualified advisers in their own right – thereby contributing to their own and their firm’s revenue, rather than unnecessarily sapping it.”
IFP chief executive Nick Cann says: “Each adviser firm has to make a judgement on its own merit as to whether the cost of employing dedicated paraplanners internally makes sense.
“If the additional input required allows an adviser to be released to spend more time with clients and earning fees which more than cover the additional expenditure, then there is still a very strong case for this.
“However, for many firms, particularly those now dealing with more internet-based or less face to face advice business, the paraplanning role becomes much less complex and it makes absolute sense to look at other alternatives.