Making the para normal

As your financial planning business grows, you may find yourself spending longer on the administrative and technical side of your role, with less and less time to excel at what you really enjoy, which is engaging with clients. If so, then maybe it’s time to send in the paras. The paraplanners, that is.

In management land there’s something called the Peter Principle, which is the rule that people will rise to their level of incompetence. In other words, if you’re good at your job you’ll be promoted, and promoted again, until eventually you ascend into a job you can’t do. An even more vicious take on this is the Dilbert Principle – the theory that incompetent people are promoted to middle-management because they can’t be trusted with doing actual work.

Thankfully this doesn’t always happen in real life. What is true, however, is that the more successful a business becomes, the more ‘time overheads’ start to build up, the administrative and non-client facing tasks that are unfortunately necessary to keep moving forwards. In a financial planning firm, for example, this can mean that someone who is brilliant at explaining and designing financial plans with new clients (and thereby winning their custom) is increasingly stuck at a desk putting those plans into practical effect. Great talents can suddenly find themselves pinned down, like Gulliver, by huge numbers of small but vital tasks.

Special forces dropping in

Enter the paraplanners. Until around the mid-nineties it was simply accepted that financial planners would carry out all of the administrative side of a plan themselves, as although some of the work might be considered routine it was generally too technical and demanding of specialist skill sets to entrust simply to an administrator.

However, the vacuum was soon filled by a new breed of super-administrators, individuals with comparable technical skills to a financial planner, who nevertheless felt more at home in the analytical side of the role. In the larger firms that first began to employ them, these paraplanners specialised in the writing of reports, research into providers and investments, the analysis of statistics and the handling of compliance. This helped to free up time for financial planners themselves to focus on what they were best at: getting out there and winning clients.

What level?

A paraplanner, then, is broadly defined as one who provides technical and administrative support to a financial planner. They shouldn’t however be mistaken for PAs or secretaries. The most appropriate use of paraplanners will vary according to the business, so you may find you need only low-level support from a newly qualified graduate with a basic Certificate in Financial Planning. Conversely, a larger business may require a senior paraplanner with a full qualification as a Certified Financial Planner, who stands as an equal partner with the financial planner, so the two work together as a close-knit team. Some ‘support paraplanners’ may well be looking to become financial planners themselves in the future, but plenty of others will consider paraplanning their final career choice.

The new norm

The use of paraplanners is already standard practice in many firms, and is likely to rise as the pace of the financial advice industry increases. Lone financial planners may find themselves spread too thinly if they try to build their client lists while personally administering every plan themselves. Some may be reluctant to cede any control if they fear it may compromise their own high standards – but in many cases such worries are misplaced. The firms who do employ paraplanners on the whole demonstrate the effectiveness of such a team effort – so there is no reason why it can’t work on a small scale too. A team can end up achieving more than the sum of its parts, if each of those individuals is able to focus entirely on what they do best.


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