Jane Holt has recently joined Paraplan Plus and this blog records her first month as an outsourced paraplanner.

I never planned to be a paraplanner.

But having outgrown my previous job role of admin person / office manager / sometimes-paraplanner in a small but successful financial planning practice, I was excited as I started work with Richard three weeks ago to finally be able to call myself a ‘proper’ paraplanner.

I was also interested to see what life would be like “on the other side of the fence”, as Richard puts it. I was used to the client facing environment; familiar with the majority of my practice’s clients, having spoken to them on the telephone, greeted them at the office, written them letters, slaved over their reports, and had a hand in their financial strategies.

Week one was a whirlwind of information. New systems, processes, research tools, report styles.

Week two, things fell into place somewhat, and I felt confident about starting to write my own reports rather than just do the preparation as I had the first week.

Now in the middle of week three, I feel my feet have barely touched the ground since Monday, and the volume of work I’m getting through is astonishing me!

It has suddenly fallen into place for me just how much sense outsourced paraplanning makes. In my previous job; a small practice, as mentioned earlier, a client report could take us a week to complete. I would have a number of cases on the go at once, all with totally different objectives, requirements, and recommendations, and each would need a different sort of research process, a bespoke recommendation, and a carefully crafted personal report. The process took hours and hours, not just of my time, but of the adviser’s, who wanted to scrutinise every step of the process; every word of the report.

On “the other side of the fence”, though, the process is much more efficient, streamlined and slick.

This doesn’t for a moment mean that our reports aren’t personalised. Providing our IFA provides a reasonable summary of their client’s personal situation and objectives, each case is worked around the individual scenario.

However, it’s considerably more efficient to write, say, ten reports recommending a risk-appropriate portfolio of mutual funds held via a wrap, than it is to write just one, even if each client’s attitude to risk is slightly different, appropriate wrap provider is different, and portfolio of funds is different. Our technical knowledge is up to date, the software and research processes are familiar, and while the reports are worked around what the adviser wants to provide to their client, the basic structure of each report is similar. Hey presto, many more reports can be written in the time it originally took me to write one or two!

Do I think, though, that the individual financial planning practices are losing that personal touch in their reports; that by going through a process, their clients are somehow losing out?

Quite the opposite; I feel that if providing a robust and repeatable process is one of the fundamental principles of TCF, then putting each client through a paraplanning process carried out by a paraplanning specialist, rather than an overstretched adviser or administrator who hasn’t used such-a-piece of software for a month, is a great leap towards this.

And the amount of adviser time that is freed up by the outsourcing of the paraplanning can be used to focus on more face-to-face client projects, which, as numerous studies will tell us, is what the clients value most.

It sounds like a win-win to me.

My business is in the fortunate position of being able to turn away new clients as we are so busy with our existing ones. However, we still get lots of enquiries each week and I felt quite bad not being able to help as most wanted to engage with a paraplanner.  This lead to the idea of the directory.  It’s the first time an IFA or financial planner can go to one site and see a listing of freelance and outsourced paraplanners (and administrators), review detailed information about them and make contact with as many as they want with a single click.

It’s a simple idea but I think it will work.  The profile of parapalanners has grown rapidly in recent years and this is another step forward in meeting the demand for our services.  You can find the Directory here and follow us on Twitter here.

In the most recent edition of Financial Solutions magazine (the magazine of the Personal Financial Society) freelance paraplanner Cathi Harrison explains what she does, how she came to work in Financial Services and what paraplanning means.

The article shows again how paraplanners are beginning to be seen more and more throughout the industry and Cathi also shares her views on what the future holds for paraplanning particularly in the UK in light of the Retail Distribution Review.

Financial Solutions magazine has kindly allowed us to reproduce the article and you can read it here.

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.

Martin is the featured paraplanner in Professional Adviser this week which has recently introduced a paraplanner section.  It’s good to see another publication recognising the importance of paraplanners and dedicating resources.  Here is what he had to say.

Martin Vaughan is founder of Paragon Paraplanning.  He is also co-founder of theparaplanner.com, the UK’s first website dedicated to paraplanning.

How did you become a paraplanner?

I have been working in financial services for 17 years, initially as a financial adviser for Prudential, HSBC and others. I reached a point, around nine years ago, when I wanted to get into the IFA field. I looked at where my strengths lay, and found I was best suited to research, writing reports and other tasks which we now associate with paraplanning. I have not been a regulated individual since then, and worked as a paraplanner for a several IFA firms before setting up on my own last year.

Has the role changed much over the years?

The role, and its profile, has changed dramatically over the years. When I first started doing this nine years ago, paraplanning wasn’t really a recognised career in the UK. There have been paraplanners in the US for about 25 years, and they became common in Australia around 10 or 15 years ago, but in the UK paraplanners have only started to become a major part of financial advice in the past five or so years.

The actual tasks a paraplanner undertakes on a daily basis haven’t really changed, but the profile of the job has increased as we can see from steps taken by the IFP to formalise the role.

I think advisers are really starting to see the value of having a paraplanner to work alongside them. It is a more cost effective way of delivering advice, as the adviser can spend more time doing what he is good at and the paraplanner can focus on what they are good at. It is all about making sure your business has the right people, at the right price for the right job.

What do you think of the IFP’s new paraplanner qualification?

Bearing in mind that I helped put the qualification together, I think it is superb. It’s a step in the right direction for the industry as it helps recognise paraplanning as a role in its own right. It identifies paraplanning as a job that requires specialist skills and knowledge, filling a vital role within a business.

The development of this qualification shows people in the industry they can go on and take more advanced qualifications without necessarily becoming an IFA. You can move up in the financial advice sector without becoming a regulated individual, and it can open doors to other related careers, such as compliance or office management.

What is the most rewarding part of your job?

The most rewarding part of being a paraplanner is helping advisers create a fantastic solution for clients. It is especially satisfying when you have a tricky case as you work with the adviser to examine everything needed and you come up with an excellent plan and clients really appreciate it.

Freelance paraplanner Cathi Harrison has been shortlisted for an entrepreneurship award just three months after starting up her own business, Darlington-based Para-Sols.

She made it through the first round of the Shell LiveWire Young Entrepreneur Awards and stands to win £10,000 if she scoops the award. She will have to pitch her business to the LiveWire judges in London if she makes it to the next stage.

‘It is such a huge award. I did not expect to get anywhere,’ said 26-year-old Cathi (pictured), who used to work at Harrogate-based Brook Dobson-Brear and set up Para-Sols in June.

She was inspired to start her own business after spotting a gap in the market in the north-east. She said her daily commute had in part prompted her. ‘I started to look for something in the north-east and saw a lot of advisers needed support.’ Guidance from freelance paraplanners Martin Vaughan and Richard Allum helped her in setting up, she said.

Thanks for the name checks Cathi and good luck in the awards.

This article was published on Citywire.

]]> http://www.theparaplanner.com/2009/09/30/freelance-paraplanner-on-livewire-shortlist/feed/ 0 http://www.theparaplanner.com/2009/01/25/martin%e2%80%99s-blog/ http://www.theparaplanner.com/2009/01/25/martin%e2%80%99s-blog/#comments Sun, 25 Jan 2009 22:27:43 +0000 Martin Vaughan http://www.theparaplanner.com/2009/01/25/martin%e2%80%99s-blog/

This week I had the pleasure of attending the Nottingham Insurance Institute’s Annual Dinner and I would like to thank all those involved for such a well organised and well run evening.

I must admit I was surprised when I received an invitation to attend having never had one before but not being one to miss out on a free dinner, I accepted gleefully. I had been invited because a short time ago I had achieved the Advanced Diploma in Financial Planning and the Institute wanted to present me with my certificate at their annual dinner. It wasn’t just me though; there were other award winners there. I was able to sit next to a very nice gentlemen called Mark Loydall who is a Director of Cambourne Financial Planning and we had a very pleasant chat about many things during the course of the evening.

I met many nice people and had the opportunity of speaking to many people in Financial services (a vast number worked in General Insurance) rather than Personal Financial planning but throughout the evening people asked what I did and I said I was a Paraplanner and they had no idea of what this was. Sometimes not even any conception of what this was. So it just goes to show how much work is involved in making everyone within the industry aware of what a paraplanner is first if all before going on to explaining what a paraplanner does and the benefits of having a paraplanner in your business.

Which brings me onto the role of the Paraplanner. As many of you will know who have followed the site since last April, I have been involved with the Financial Services Skills Council in writing the National Occupation Standards for the role of paraplanner. These are extremely important as they will allow people within the industry to see ‘officially’ what a paraplanner is and what a paraplanner does. We have now reached a critical point in the process where the Working Group has thrashed out the basis of what it thinks a paraplanner is and does but we now need EVERYONE ELSE to be involved.

And the best people to do this are those who are paraplanners and those who employ paraplanners.

Many businesses will have received a letter a couple of weeks ago from the FSSC explaining the above but if you have not received one or are not at an employers where they have received one you can still be involved.

The paragraph from the letter which you need to be aware of is as follows.

‘We have recently prepared a suite of draft NOS for Paraplanning, with one of the main aims being a desire to raise the profile of Paraplanning within the industry, and these may be found on our website at http://www.fssc.org.uk/ – please go to the Paraplanning page via the National Occupational Standards dropdown menu under Education.’

There you will find a questionnaire which I would ask you to complete once you have read the NOS and made comments.

The closing date is 9^th February so you need to get on with it.

This is massively important as these NOS will be used for explaining and setting standards for the role of the Paraplanner for years to come so I would ask you to get involved, use your experience and make your voice heard.

Whether you are a new starter or have been a paraplanner for many years – your opinion counts and it is important that you say what you think.

Hopefully then we will have  a set of standards and a description for our role which will raise the profile of Paraplanners so that I don’t have to explain what I do every time I meet someone.

I write a fair few reports each week and sometimes my brain and fingers don’t seem to talk the same language – I think something and then type something else.  Other times, I know exactly what I want to say and then type it confident in the knowledge that what I have typed clearly explains my analysis or recommendation only for one of my advisers to call asking:

‘What the hell are you talking about?!’

We have a good proof reading process and no report will get sent to an adviser until it has passed the razor like eyes and intellect of one of our proof readers (who are all paraplanners).   However, some of you may not have a proof reader and need to check your own work.  In this case, you may find this article very useful.

This is taken from a site dedicated to the world of freelancing, not just paraplanners but all types of freelancers, and is well worth checking out.

Hope you find it useful and if I haven’t made myself clear in this post, call the proof reader!

We continue our series of interviews with a paraplanner to gain an insight into his or her career, working day and top tips for the rest of us. This week features Heidi Witham who runs her own freelance paraplanning business.   If you would like to feature in this section in the coming weeks and provide useful information to your peers (as well as raising your own profile) please contact us.

Name – Heidi Witham

Current Role – Senior Partner

Employer/Company – Absolute Paraplanning

Qualifications – Certificate FP- awaiting results J4- pension funding

How long have you worked in Financial Services? – since 2001- 7 years

Have you always been a paraplanner? - no, I began as sales support for Royal London Insurance Society, then a sales consultant for the same company, then worked in sales support for Lifesearch who are protection specialists and a subsidiary of Baigrie Davies, then financial administrator at Carrwood Macintyre who were integrated within Macintyre Hudson- a national accountancy practice. Then in 2005 I became a paraplanner for Michael McCroddan at his firm, The McCroddan Partnership. Following Michael’s sale of his business, I decided to make the jump into freelance paraplanning and established Absolute Paraplanning in August 2008.

How would you describe a typical day as a paraplanner for you? – As I work from home there is no commuting, so I step into the spare room. My usual business is pension transfers- reports and fund research to back up the advice given. I also do ad-hoc work such as file organisation for a local adviser and contacting insurance providers for information and chasing transfer monies.

Once a week I harass my collection of insurance company and fund management broker consultants; getting myself invited to any seminars or events, as this is my ideal chance to meet IFA’s and promote my company, as well as keeping up with industry gossip. Once a week I send a “cold” letter to 10 IFA’s, whose details I source from leads from the broker consultants/recruitment agencies or by postcode on the FSA register. I also set aside time on a weekly basis for my business paperwork; filing invoices and receipts and keeping my business spreadsheets up to date.

How do you fit into the overall paraplanning support within your company? – My role predominantly is paraplanning and support as mentioned above. I also have other paraplanners available to me for overflow work, as well as access to a fully qualified pension transfer specialist, mortgage adviser, accountant and IT specialist, who all work under my umbrella.

What aspect of paraplanning do you enjoy most? - I enjoy getting stuck into a report and seeing the report finally coming together. I am paranoid so I tend to check my reports the day after completion before sending to the IFA; otherwise I wake up in the night in a cold sweat thinking I have missed a major point! I enjoy getting the feedback from the advisers when they finally read the reports. It’s also a good feeling when my clients contact me saying they have another few reports for me. It is good to know I have a positive impact on other people’s businesses.

In what ways can you add value as a paraplanner? – Being proactive and ahead of the game, anticipating the adviser’s needs rather than waiting for the needs to be told. The IFA can then be confident his/her world won’t come crashing down if him/her is not around. The fundamental reason of our existence is to allow the adviser more and more time sitting in front of a client.

What tips would you offer any other paraplanners? -

• Pay attention to detail, it’s the most important aspect of our role. Double check everything you do, no matter how small the task.
• Never leave valuable paperwork on the advisers desk- it will invariably get lost!
• Always maintain good relationships with visiting broker consultants and any other industry professionals you come into contact with, as they can provide valuable advice both now and in the future.

What websites do you regularly use? - Citywire, Trustnet, The paraplanner, IFA Life

What’s the best piece of advice you’ve ever been given? – Michael McCroddan was full of tips, the best one being to be confident in yourself. He firmly believes in self promotion. It’s all about the image you portray to your clients.  It’s ok to say “I’m not sure”, so long as you follow with “but I’ll find out” rather than guessing.

Personal Mantra: “Only a fool thinks he is a wise man; a wise man knows when he has been a fool”

What exam are you taking next? – J5- Retirement Options/Pension Income

What one thing could make your job easier? – Having access to provider websites, which I cannot do as I have no FSA number.

Thanks Heidi.

My first full week.So that was it! The end of my first week as a fully fledged Freelance Paraplanner and what a start to the week I had.

I was unlucky enough to be struck down with ‘flu. (It really was flu as well not just man flu!!) Saturday was spent unable to move because I felt so ill, Sunday was spent getting a little bit better and then back to work on Monday.

Fortunately by that time I had got over the worst of the illness and was able to do some work but certainly not a full day. I was glad that I didn’t have to get up and go to an office and be there for 9.00 am; I certainly don’t think I would have been able to do that but at the same time because I didn’t feel 100% I wasn’t able to do a full days work and when you only get paid when you work (I’d given up the benefits of sick pay) you realise how important it is to get up and at least attempt to do something.

I have been fortunate to have been asked to do some work for an IFA who I have known for some time so my week was spent doing things I am very familiar with, completing research and writing reports. I also had the pleasure of trying to get client information from a couple of companies who of course have been as helpful as ever!!! Even when you’ve sent off letters of authority there is still a reason why they are unable to give you the information you need to be able to complete a report!

Of course as well as ‘work’ I had a business to run so my time is now spent doing work for which I am paid and then also doing work running a business. This includes a lot of the things Roger pointed out in his excellent article; registering for Data Protection, registering the company with Companies House, making sure I have everything for my ‘office’. It all takes time and you never really realise how much.

In addition, included in my ‘running the business’ work is also making sure you have work to do. It’s no good doing all this work and completing it if there’s no more work to do after that, so part of this week was spent speaking to other IFAs to offer my Freelance Paraplanning services. I realise that what I offer is not going to be suitable for everyone and similarly IFAs may want to use a Freelance Paraplanning service but not mine – it may not suit their business but my motto at the moment is ‘if you don’t speak to people you’ll never know’.