Jobs in finance: how paraplanning has become a profession

30 April, 2021Gerry Brown

Paraplanners support financial advisers with research, report writing and planning strategies for clients. Their role has become increasingly important to advice firms and is now a well regarded and rewarding career.

What’s in a name? That which we call a rose
By any other name would smell as sweet.

Red roseShakespeare might not have had financial planning in mind when he penned these lines. But his observation – that names simply act as labels to distinguish one thing or person from another – is still valid four hundred years later.

Historically there were two main functions in a financial planning firm – planning and administration.

The former involved regular client contact, usually face to face. The latter was regarded as somewhat tedious but nevertheless essential.

The firm’s owners – particularly in smaller firms – were the only financial planners. The other staff fulfilled administrative functions.

Principals in a firm were usually the owners. They often found that a significant proportion of the working week was spent on research, report writing and administration, due to:

  • the increasing complexity of regulatory requirements
  • the growing sophistication of client needs, and
  • the myriad of financial products available to meet those needs.

This left little time for client contact and business development.

How advice firms work?

The principals in a financial planning business should have as key objectives the retention of existing clients and the winning of new ones.

Man reading business newsWinning new clients often means developing ‘professional connections’ with local accountants and solicitors. But these business development activities can be time consuming.

Until relatively recently, paraplanning was often viewed as an extension of the administration function rather than as a profession in its own right.

While it is arguable that paraplanning grew from administration, many paraplanners – both qualified and trainee – are recruited directly.

Paraplanners allow financial planners the space to undertake client maintenance and business development activities by:

  • undertaking the research and report writing functions
  • assisting in the implementation of agreed planning strategies, and
  • getting involved in the annual review process.

Is there a career path from administration through paraplanning to financial planner?

Much depends on the structure of the firm. In many small firms there’s little succession planning. When the owners decide to retire, the business – effectively the client bank – is sold.

Sometimes the administrative staff and, to a lesser extent the paraplanners, follow the clients. Sometimes they face redundancy.

Fortunately, there’s a buoyant recruitment market for experienced administrative staff and for paraplanners.

However in a recent survey for Professional Paraplanner, only 47% of paraplanners saw a clear career path.

Crucially the survey revealed that “the size of the firm was also found to play a role, with larger firms considered to have more of a structured path in place”.

Paraplanning as a career

It is possible to move from administration through paraplanning to financial planning. But it’s equally clear that being a good paraplanner is a satisfying and rewarding role in itself.

Many paraplanners operate their own businesses, servicing the needs of several financial advisory firms. For those who want control and flexibility this can prove a very satisfactory arrangement.

So, having started with Shakespeare, let’s end with Fun Boy Three and Bananarama.

It ain’t what you do, it’s the way that you do it! And that’s what gets results!

In other words, professionalism wins in the end.

Gerry Brown
Gerry Brown is a Consultant at QB Partners. He began his professional career as an inspector of taxes and later qualified as a chartered accountant. He’s worked at a number of financial services companies providing technical support and contributes to our Diploma in Paraplanning (DipPP).

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