Previously I looked at the recent changes in relation to paraplanning within the industry. These changes have led to a greater understanding of what a paraplanner is and the benefits a paraplanner can bring to an individual firm.My focus now is to look at how paraplanners can play a part in shaping the future of the industry and where they fit into the different financial planning and advice models.
As the industry moves on and develops we have seen more and more firms begin to specialise. In many cases they rethink their proposition and realise where their skills lie, where their expertise lies and understand the type of firm they want. This has meant that the more progressive firms have fallen into 2 camps those of Financial Planners and Wealth Managers. Paraplanners are invariably present in both types of firms however the types of tasks they undertake can be very different.
Within a Financial Planning firm a paraplanner is likely to assist the financial planner with the preparation of cash flow analysis, designing tax planning, investment, retirement or other strategies, possibly some product research and of course, report writing.
Within a Wealth Management firm the emphasis will be slightly different. Because this type of firm is designed to manage a client’s wealth they will invariably have a much greater emphasis on the management of the wealth of the client in all its forms. For this reason the paraplanner is likely to be involved in much more research into the underlying investments within whatever tax wrapper has been recommended. In turn there is likely to be much more involvement with the underlying assets when it come to completing the reviews and the implementation of any changes resulting from the reviews.
It is important to note that I am not saying Financial Planners do not undertake any wealth management – they do – or that Wealth Managers don’t undertake any financial planning – they do – however it is likely that the paraplanners in each of these firms (as the person who completes many of the back office tasks) are likely to have very different day to day roles.
One of the difficulties the working group had when writing the NOS for paraplanning was in trying to ensure all of these different types of paraplanning were included and it is hoped that within the NOS is a framework which can be used as a guide for paraplanning whatever the type of business.
As more and more firms move towards the ‘new model’ which often by its very nature includes using a paraplanner, it provides a fantastic opportunity for paraplanners to be involved in shaping and influencing the way the industry develops and moves forward.
Paraplanners will be the ones who will notice the technological advances first because they will be using the software. They will notice changes within a fund or investment sector because they are doing analysis everyday. They will notice the changes within the product providers because they are dealing with them everyday. They will be the ones who are best placed to advise planners on the best way to implement any particular strategy for a client as they will be aware of what changes have been made to a platform, what changes the provider of a tax wrapper may have made, what changes have been made within a particular fund or investment or what legislative or compliance changes have been made and how best they can be implemented.
Because they are on many occasions the first group of people to be affected by the changes mentioned above Paraplanners are also the group of people who are best placed to offer feedback on how the changes impact on the industry as a whole and are also well placed to offer constructive feedback on how the changes could be improved.
Paraplanners are an extremely underused resource. As paraplanners become better utilised, better understood and better qualified they will be at the forefront of the development of the changes within in the industry whatever type of firm they are used in. Individuals coming to paraplanning now will find themselves in a role which is increasing its own professionalism within an increasingly professional industry and well placed to help shape the industry’s future over the next 10 – 15 years.
