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The new breed of paraplanners


Here’s an intriguing question for some of your more historically minded colleagues on a quiet lunchtime.

What’s been the biggest change to the industry over the last 20 years? By way of answer, you’ll probably get some mix of:

  • Pension simplification
  • Regulatory body changes (PIA to FSA to…)
  • Pension freedoms
  • The rise of platforms.

But will anyone mention paraplanners? Probably not.

Yet it’s reasonable to argue that few things have changed the industry as much as the introduction of paraplanners in the last two decades. There’s also a good chance that some of the biggest changes are yet to come.

Paraplanners largely didn’t exist as a group 20 years ago – or at least, they weren’t called that. There’s always been someone in the back office helping, of course, though for many years it was (and maybe still is) an adviser wearing a different hat. There was a relatively slow realisation across the industry that there are benefits to having a specialist behind the scenes to do that part of the job. The rise of paraplanners has been largely unremarked, occurring quietly in a way that belies the scope of what they’ve actually achieved.

A recent survey by Canada Life provides the evidence: 

In a survey of some 200 advisers, only 8% saw paraplanners as not adding any value. That’s a tiny figure that has fallen by a third in the last year alone. You could hazard a guess that many in this minority have had little experience of using a paraplanner anyway – it’s possible they are converts waiting to happen.

Getting it right

According to the same survey, where paraplanners have made themselves indispensable is by helping advisers get on with what they need to focus on.

  • Nearly two thirds (65%) of advisers say paraplanners free them up to do more valuable activities
  • Just under half (47%) said they add value in non-financial ways, for example, by researching different options for the adviser to consider.
  • Three in ten (29%) believe that paraplanners add significant value to a client’s financial strategy.

Put another way: on any given day a paraplanner could, amongst many other duties, be researching which bond works best in which international jurisdiction, crunching numbers on the overall IHT strategy, and keeping up to speed on the latest regulatory changes, thereby enabling advisers to focus on retaining and increasing their client base.

The past is no guide to the future

This is a key moment in time for paraplanners. Much of the hard yards have already been done in terms of establishing themselves as a credible, authoritative voice in the industry.

What we are seeing is a big opportunity to redefine and expand their role even further. The interesting part? It’s advisers who are often the ones keen for paraplanners to do more, be it taking on a greatly increased planning role, or even to start meeting with clients (if they haven’t already).

These different opportunities are already being reflected in the workplace. Some firms are reporting a ‘split’ in the jobs paraplanners are doing, as paraplanners move away from being entirely back office based.

By the way, we should also be clear that it’s time to finally put to bed the idea that being a paraplanner is just a stopover on the road to being an adviser. For many, being a paraplanner is the goal. They’re happy in the back office bringing their planning and analytical skills to a financial strategy (and, like advisers, grappling with the requirements of life-long learning as the rules and opportunities change).Others will grasp this opportunity to further blur the lines between themselves and advisers – and enjoy a hybrid role that brings out the best in their skills.

The challenge ahead

Perhaps unsurprisingly, demand is outstripping supply with several firms reporting difficulties in recruiting paraplanners. Currently around half of financial adviser firms employ at least one paraplanner. That may not seem like much, except that another 30% of firms are expecting to employ a paraplanner (or a paraplanning service), in the near future.

For paraplanners this could be a golden opportunity – in demand and in the driver’s seat, when it comes to defining what their role should be. Time will tell how many grasp this chance.

Neil Jones, Market Development Manager. Neil is an investment specialist with over 20 years’ financial services experience with life and pensions providers, an investment company and as a professional adviser specialising in pensions, investments and estate planning. Neil has been involved in product development, investment research and training.