What is a Paraplanner?

In short a paraplanner is a person who works with a Financial Planner or Financial Adviser and completes a number of the non-client facing tasks involved in preparing and administering a Financial Plan or Report for a client.

Perhaps a little bit of history would help to explain this further.

Up to approximately 15 years ago paraplanners in the UK did not exist. Advisers had their clients and would tend to complete everything involved in the planning process with the exception of processing any applications though in many instances advisers did this themselves also.

Advisers realised that some of these basic administrative tasks could be undertaken by another person thus allowing them more time to see clients. At this time there were a number of Financial Advisers and Planners who felt that their strengths lay more in the technical/report writing aspect of preparing the financial plans rather than the explaining and discussing the plans with clients.

Also at this time a number of administrators were wondering how their careers would move on. Administrators did not necessarily want to become advisers and yet they wanted to put the knowledge they had gained over the years to more effective use.

This created a role almost sandwiched between that of an adviser and administrator. The role initially appeared to be a ‘Senior Administrator’ but it is this role that has developed over the years into the role of paraplanner.

A paraplanner then is a person who is variously described as:

  • An administrator (we are much more than that)
  • An Adviser’s secretary/PA (we should be equal to the adviser)
  • A highly technical and qualified individual who can offer skills in addition to those of the adviser to provide the client with a positive professional experience.

What does a paraplanner do?

This is a very difficult question to answer as all Financial Planners and Advisers require slightly different things from their paraplanners, however there are some core financial planning skills that all paraplanners perform to a lesser or greater extent and would form the basis of any Paraplanning role. These are:

  • Excellent report writing and communication skills
  • Ability to analyse statistics
  • Ability to conduct research for appropriate solutions (including providers and investments but not always)
  • Good understanding of compliance issues
  • Good time management skills
  • Excellent interpersonal and IT skills

A paraplanner can and will be asked to undertake various other tasks depending on what is actually required by the adviser or the company for whom the paraplanner works so this list should not be seen as either exclusive or exhaustive. In addition paraplanners asked to undertake the tasks listed above will be at different stages of their careers, they will have different abilities both technical and personal and be able to perform these tasks to different standards.

Therefore, in much the same way as the role of the FP has changed to allow them more time to do the things they are good at (spending more time with clients) so, I feel, the role of the paraplanner should now be more clearly defined.

Different levels of paraplanner

A person who is new to the industry, perhaps a graduate, will not be able to offer an adviser the same level of support as a person who has worked in the industry for 15–20 years. And yet they could both be described as paraplanners as they ‘assist a Financial Planner’. For this reason and for clarity within the industry, it was previously proposed that we introduce 3 levels of paraplanner in addition to the highly important role of an Administrator. The different levels, along with a suggestion for the amount of experience each would have and the level of industry qualifications, are below:

  • Support Paraplanner — 1–2 years experience, Certificate in Financial Planning
  • Paraplanner — 3–5 years experience, some Diploma level qualifications (i.e. Level 4)
  • Senior Paraplanner — 5 years + experience, Full Diploma / Advanced Diploma / Certified Financial Planner / Chartered Financial Planner

The specific skills and qualities required by individuals to fulfil these roles will vary but defining the paraplanners role in this way could have a number of benefits.

Firstly there will be a much more clearly defined career path for those individuals who wish to pursue Paraplanning as a career. They will be able to follow the examination path from certificate level qualifications, through to Diploma level qualifications and then on to advanced level qualifications. There is a career knowledge structure which would be enhanced by the experience gained through employment.

Secondly employers will be able to define more clearly the type of paraplanner they require (and budget for). Do they require a Senior Paraplanner who will be able to provide all the benefits of experience and knowledge but would be much more expensive or does the employer actually only require a Support Paraplanner who has some basic qualification and is able to change the name and address on a standard template letter.

Thirdly it will help the industry to become more attractive. People new to the industry who do not wish to become advisers and hope to become more than an administrator will be able to see a clearly define career path where their knowledge and experience is rewarded both financially and with professional standing in the industry. They will be able to work towards an internationally recognised qualification in the knowledge that it has taken time and effort to achieve this.

But, there’s a but!

Some paraplanners are truly superb at what they do yet don’t have a Level 4 qualification. Some people have Level 6 qualifications but would not meet my own definition of what a good paraplanner looks like. So, a prescriptive definition has its faults but it’s a starting point if we want to have ‘names’ attached to the roles.

Personally I think a better alternative is to have a ‘kite mark’ or whatever we call it that paraplanners can achieve and maintain to demonstrate that they have certain skill sets that all employers, and ultimately clients, would benefit from. In other words, a practical assessment. This is something that was discussed at the recent Paraplanners Powwow and Dan Atkinson shared the approach used by nurses of peer reviews to demonstrate and maintain standards. I think this is a very interesting idea and the Powwow will be publishing more thoughts on this soon.

In summary, the paraplanner works as part of a team alongside the adviser and the administrator to provide the client with a professional ongoing Financial Planning experience. Having a team approach ensures that there is always a point of contact for the client, and ensures that by using each individuals strengths the sum of the whole is greater than the sum of the individual parts.

This is an updated version of a blog first published on The Paraplanner.