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Virtual reality

Nobody would doubt that the Association of British Insurers and the Institute of Financial Planning, among others, are doing a great job in terms of helping IFAs bring some key issues to the fore.

I wholeheartedly agree with the IFP’s recent comments on the “pivotal and vital” function that paraplanning has in an RDR world.

But what was perhaps missing or misunderstood was the fact that this does not necessarily mean that we need more paraplanners, more investment in training them or indeed any more costly human resource to achieve the very same objectives.

While the role of the paraplanner is becoming more and more important, with RDR and TCF requiring more in-depth research, reporting and reviews, all this can weigh very heavily on the already growing cost burdens of many smaller IFA businesses. So what is the point of taking on more staff to do this when there are perfectly good technology-led alternatives that can do all this work, often better and cheaper?

Choosing this route 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.

Using a centralised team of chartered specialists on tap (and not requiring hefty full-time salaries), along with dedicated technology which can re-use client data for all the necessary letters, reports and reviews has got to be the better option.

The technology-led alternative provides for a much more efficient, automated and streamlined way of doing business. And, with minimal room for human error, it also ensures a straight-through process which makes light work for any compliance officer or regulator when it comes to any reviews or inspections.

So while I totally agree with the IFP’s comments that para-planning (but not “a paraplanner”) “can make a huge impact on a business and really help an adviser focus on the client”, why spend unnecessary money on employing more staff to achieve this when it just is not necessary?

Although we all must appreciate that day-to-day business levels vary and there are times when an extra pair of hands would prove invaluable, the more savvy advisers can now do this with a virtual administrator service.

Available on tap, this provides full administrative support to package business cases electronically – complete with suitability reports and compliance approval.

Of course, clients 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.

Chris Smallwood is chief executive of 2plan Wealth Management

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