Where Do Paraplanners Fit In The Future Advice Puzzle?

The role of the paraplanner has evolved rapidly in the past few years, with businesses now increasingly using technology and remote teams to supplement or even replace the function.

While Adviser Ratings data shows most practices still have two support staff for every adviser, we’ve seen a steady increase in the number of outsourced staff. Indeed, the average practice now has the equivalent of one outsourced staff member for every six internal team members.

Of course, the changing landscape hasn’t escaped the attention of paraplanners, some of whom are leaving the industry or going on to be financial advisers. At the same time, there’s also a push for greater role clarity and development for those who wish to continue in the industry.  

Carving out a path

Recently, education provider Kaplan announced it was creating a dedicated paraplanner Advanced Diploma, which it said may act as a gateway to financial planning for those who wish to pursue that avenue.

“The industry is focused on supplementing its talent pool over the coming years, so this course will provide an accessible and suitable pathway for those who want to enter the industry and eventually become a financial adviser,” Kaplan CEO Brian Knight said.

The course is also offered to paraplanners who don’t have financial planning aspirations, which describes a lot of the industry, former paraplanner and founder of Tanngo, Melanie Drago, said.

Ms Drago said paraplanners are “a bit lost on what qualifications they should get, especially if they don’t want to become advisers in the long term”.

Unsurprisingly, research shows not all paraplanners are financial planners in waiting, with many instead wishing to hone their skills in their chosen role.

Tanngo and the Paraplanning Hub’s survey of 130 paraplanners found 72 per cent had no intention of becoming an adviser. Meanwhile, UK research from Idex Consulting found half of paraplanners had long-term plans to stay in their current role.

What paraplanners want

While many paraplanners may not wish to become planners, Ms Drago said there’s a clear demand for greater role demarcation.  

At present, she said there isn’t clear delineation about what is considered paraplanning and what is considered financial planning, which deserves greater attention, given paraplanners currently aren’t required to undertake professional accreditation.

Early feedback from one survey Ms Drago is conducting shows as many as three-in-four paraplanners want professional accreditation, while the vast majority want mandated ongoing professional education.

“A professional standard for paraplanning [would] clearly define what the adviser should be responsible for, and what the paraplanners are able to assist with,” she said.

“Another strong position from paraplanners is that there should be recognised ‘levels’ of paraplanners – for example, from junior to senior,” Ms Drago said.

“This would help the advisers understand the quality and expertise of paraplanners, especially as they are usually employing or contracting out their services without any understanding of their skill level.”

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