The latest round of the NMG / theparaplanner.com survey was completed recently and the results have been collated and can be seen here.  They consider the time paraplanners spend on various activities as well as the qualifications paraplanners hold along with their position prior to becoming a paraplanner and are very informative.

The results shown here are only the salient points which are relevant to the paraplanners role and more questions were asked in the actual survey.

We would like to thank greatly, all those who have already taken part in the survey and will continue to do so. This is an excellent way of us communicating as a group to professional bodies and financial services providers. It allows them to understand more fully exactly what it is we do; where we spend our time and how they can improve and make our working life more productive.

We are always looking for more paraplanners to complete the survey so if you would like to take part in the next survey please send an email to martin@theparaplanner.com and I will make sure you are included.

As proof that the survey has an effect, theparaplanner.com has for the past two years presented the Paraplanner of the Year award, indeed we were the ones who created the first award specifically for paraplanners in the UK.

As part of the last survey we asked as number of question about the award and it was pleasing to see many of you providing comments both positive and negative.

We would like to run the award again this year but wish to ensure that it is an award for paraplanners which is meaningful and allows paraplanners to demonstrate their skill rather than just a letter from an employer or work colleague.

Therefore we would like to hear your views!!

Please tell us the type of award you would like to see; the format; the types of things that you would look for when entering, in fact everything surrounding the award.

This way we will ensure that we can create an award for paraplanners which not only allows them to demonstrate their skill but is also exciting, meaningful and worthwhile.

Thanks for your help.

Many of you will have completed the paraplanner census at the end of last year which we thank you for. Due to various things beyond our control we had not been able to bring you the results until now. The census is a fantastic way of making your views heard and of providing real statistical evidence of the increasing importance paraplanners play in IFA practices.

The salient points from the survey can be found by clicking this link – Paraplanner Census Nov 09

As you can imagine this is only a part of a much larger survey; if you wish to discuss the full survey please contact NMG who will be happy to help.  To make the survey meaningful we would like as many people as possible to take part so if you are a paraplanner and would like to be part of the next survey please send an email via the enquiry form in the Contact Us section and we shall make sure you are included.

A ‘Peter Taylor’ seems to think so having added the following comment at the end of the IFA Online profile of Cathi Harrison:

Paraplanning:for those who can’t open doors. the future will be full of ‘Chartered planners’or back office advisers who have the time to study, whilst we develop and get to know clients to provide specific sdvice. To all those who create clients and provide tailored advice, I salute you.

Not quite my view and there are some comments in relation to Peter’s view which you can read here.  Feel free to add your own.

The Professional Adviser Awards took place last night and I was kept up to date with events by Dennis Hall via Twitter (thanks Dennis).  I have a slight reservation with this type of awards ceremony mainly due to the fact that the winners are declared based on a vote.  It could be said that this is a popularity contest and not an objective test of quality although I would like to think that a vote would only be cast based on the quality of the recipient but you never know.

We were nominated for a similar award once and the clarification of the nomination came with a table booking form for the awards dinner at a cost of £2,500 – we didn’t go and didn’t win either.  My reservation about such events is that they are there to make money and produce marketing and PR content and not to produce an objective assessment of the nominees.  Compare this to events such as Financial Planner of the Year or Paraplanner of the Year both of which involve a rigorous assessment of the entries and not a popular vote.

Anyway, the main reason for this post is to comment on Skandia as the winner of the Best Wrap Platform.  Now Skandia does what it does very well in the main but it is a fund supermarket and not a wrap platform.  It does not have:

• Access to the whole market
• A true customer agreed remuneration facility
• Transparent charging with no kick backs from fund managers

These are all things which, in my opnion, must be present to make a wrap account.

Skandia has been very cute with their marketing to position themselves as a ‘wrap’ and they do have a very good online proposition (better than some wraps).  BUT, it is not a wrap account.  I could understand if Skandia was voted best pension or investment provider.

I am not questioning that a lot of people think Skandia is a good product provider (I would not disagree with them) but that it was placed in the wrap category in the first place.

One really good thing to come from last night was Svenja Keller winning her second Paraplanner of the Year Award.  You can read her submissions from her first award here (bit more work needed to win this one).

Citwire reports that pilot paraplanning examinations will be held by the Institute of Financial Planning (IFP) in the coming months as the professional body prepares to roll out the country’s first level four-based qualification for paraplanners. Two pilot schemes will take place for the certificate in paraplanning before the first public examinations go live at the end of June and the IFP expects as many as 100 paraplanner candidates to have completed the exam process by the end of the year.

The rise of the paraplanner marks a step change in the way the industry views those in support roles to financial advisers with increasing numbers of financial planning practices hiring or taking on full time paraplanners to help with day to day work.

The assessment will comprise an online, multiple choice examination as well as a written paper in which candidates will have to supply responses to questions based on case studies.

Scottish Widows has confirmed it will support the development of the IFP’s paraplanner qualification and offer it to intermediaries through the Scottish Widows Academy.

George Andrew, head of market relations at Scottish Widows said the decision to support the IFP’s initiative followed a marked change in the way support staff were viewed within financial planning practices.

‘Our research shows that many intermediaries are changing their business models and this includes some advisers recruiting and working with paraplanners. So we’re delighted to make the IFP’s new paraplanner qualification available through the academy,’ he said.

Nick Cann chief executive at the IFP, said. ‘This additional support from Scottish Widows enables us to complete this exciting development on schedule in 2010. We have already seen strong demand from the market place as adviser businesses look in more detail at the value that the paraplanner role can add to their growing business.’

The launch follows the IFP’s creation of the paraplanner job competence profile and its recently published syllabus for the qualifification.

Just a year ago, you would be forgiven for thinking that Social Networking websites were just for kids, but all of sudden the business world is using them as a powerful new tool for networking, marketing and sharing best practice. And yes, even the financial advice industry is getting on board too – because according to IFA Life around a third of all IFAs now have a Facebook page, with many also using LinkedIn and Twitter on a regular basis.

Paraplanners too are getting on board and are using social networking sites to attract new clients to their employers’ businesses, whilst others use these sites to add value to and communicate with existing clients. So it’s very exciting that in January 2010 there is a special Social Media conference for IFAs, Paraplanners and Providers where you’ll learn from the likes of Google, YouTube, LinkedIn and others exactly how you can use social networking sites in your day-to-day work.

We’ve also negotiated a great deal for Paraplanners who are going to attend – just £150 plus VAT for two-day pass saving £££s on the standard prices! Visit www.ifalife.com/socialmediaFS for further details – but if you want to reserve one of the special tickets for Paraplanners please send an email to philip@ifalife.com.  Act quickly to reserve your place and to beat the VAT increase!

Many of you will have seen the post earlier this week about the latest Paraplanner Survey.  A big thank you to all of you who have completed the survey. To those of you that haven’t had a chance yet, please see if you can find 5 minutes to complete this over the next few days.  The last chance to do this will be Monday 30^th November and everyone that does complete it will be entered into a prize draw with a chance to win some great prizes.

The link to the survey is in the post below but if you need it again, here it is

http://paraplannercensus.nmgsurvey.co.uk.

Many thanks in advance, your efforts are appreciated.

Many of you will remember that earlier in the year NMG in conjunction with the Paraplanner conducted the first and so far only survey into paraplanning in the UK.   This dispelled a few myths, namely that all paraplanners want to go on to be Advisers, and also provided some vitally important data about the type of people paraplanners are and the influence they have within the Financial Services industry as a whole.

Many thanks to all of you who took part in that initial survey your efforts were greatly appreciated.

Due to the surveys success we are looking to carry out the survey again so for those of you who completed the survey last time we would be grateful if you would be kind enough to complete this survey and for those of you who are new to the site or didn’t get the opportunity to do the survey last time, please complete the survey and take part; your input would be appreciated.

The survey only takes a few minutes to complete and as before all those who complete the survey will be entered for a prize draw to win some fantastic prizes.   The details are below.

Thank you

Martin and Richard

Here at The Paraplanner we have been involved with the IFP in developing the new qualification for paraplanners.  The syllabus has been published today and you can read it here.  We would really like to know your thoughts so that we can pass these on.  It would also be good to know what title you would like to be able to use once the exam has been passed.

There is a broad spectrum of approaches to risk profiling. How far along the spectrum should advisers go in turbulent times, asks Cathi Harrison of Para-Sols?

One of the most striking and interesting aspects of financial services I have noticed is the huge variations that can still be found between firms and the way they operate.

The Financial Services Authority’s nirvana is that a consumer can go to 10 different IFAs and come out with the same advice or thereabouts.  The likelihood of this happening is slim, however, and if it were to happen I would feel it was a sad day for financial services.

Advice may differ between firms, but so does the personality of each firm, its style, approach and method. And these can also vary greatly between advisers at a single firm. That is because they are human, not robots.

The wide spectrum

One of the biggest range of differences I have noticed lies in the approach firms take towards risk profiling and asset allocation. The two ends of the spectrum are very different.

At one end is the pick-a-number camp in which the client rates their own perceived attitude to risk by allocating it a number between one and five or one and 10, for example.

At the other end of the spectrum is the method of questioning the client to within an inch of their lives, followed by a thorough analysis of their psyche and innermost dreams and fears in order to come out with… a number between one and 10. Between these two extremes lies any number of methods.

In turbulent times

During these exceptionally turbulent times, IFAs have felt clients’ wrath more than ever over their asset selections and fund choices. A few advisers will have selected funds that have performed relatively well but they will not be basking in the praise and adoration of their clients. At best, they may be met with apathy. As one adviser puts it: ‘When it goes right, the credit goes to the client. When it goes wrong, the adviser will soon hear about it.’

The effects of this seem to be to have pushed advisers ever further down their preferred profiling route. The one-to-five group, worried that even such a simple approach did not work – and tired of endless ear-bending from disgruntled clients –now find that the majority of their clients fit into one of just three categories: defensive managed, balanced managed or cautious managed.

The super analytical advisers will now go even further in their analysis, also taking into account the client’s parents’ investment history (and shoe size). But, joking aside, recent events appear to have pushed these extremes even further apart. How far should advisers go when looking at a client’s attitude to risk?

Risk profiling approaches

Should the client just pick a number? This is not as terrible an option as the critics may perceive. At the very least it enables the adviser to gauge their client’s gut reaction to risk. However, this approach is by no means comprehensive enough to constitute a full analysis of someone’s risk profile.

A few questions can be added about the client’s experience and knowledge to date, to gauge how they may understand the definition of being a ‘three out of five’. The adviser could then add a few more questions to test the client’s understanding of the risk-return rule.

For example: ‘If you invested £100,000, which of these ranges would you feel comfortable with your investment falling into at the end of 12 months: a) £95,000-£105,000; b) £90,000-£110,000…’

The adviser could also consider adding a few questions about decision making, the speed with which the client tends to make their decisions and their propensity for regret at those choices.

That has quite quickly added up to a lot of questions.

Willingness versus need

The answers to these questions only give you an indication of the maximum risk the client is willing to take. The question then needs to be answered of how much risk they need to take.

This is a concept that is rapidly being incorporated by advisers. It involves looking at the clients assets versus what they hope to achieve and determining some kind of required growth yield to meet that objective. To do this, some form of cash flow planning is often needed, which can be done using expensive, complex, time-consuming but super-accurate software or a basic, internally designed spreadsheet – or a huge range of methods in between.

This results in a well-rounded profile of the risk tolerance and risk level that it is necessary for the client to take. The pitfalls are that it can take far too long, the results of each area could contradict one another and it will probably still result in picking a number between one and five.

Ready for asset allocation

Once the risk profile is determined and you know whether the client is moderately adventurous or cautiously balanced or a number four, that can be incorporated into the asset allocation.

Each firm will have its own risk-profiling procedure with which it is comfortable, based on the level of importance it attaches to the process. It is interesting to see how firms have moved further along the scale towards detail in light of recent events. If only there was a way of knowing which method works best.

Cathi Harrison is founder/owner of Para-Sols and this article was first published in New Model Adviser.