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Nathan Fryer – Plan Works

26 June 2015

Nathan Fryer set up outsourced paraplanning firm Plan Works in 2014. He’s now looking to expand the operation. 

Nathan Fryer, director and paraplanner at outsourced paraplanning firm Plan Works, began his working life within the sales side of asset management houses dealing with the intermediary market. Over 10 years he says he met with many thousands of advisers and it was one of his IFA clients who turned him on to paraplanning. During a meeting, the adviser outlined the role of the paraplanner and the issues firms were having trying to recruit good paraplanners. “He said he thought there was a huge opportunity within the outsourced paraplanning space,” says Fryer. “We sat down and talked through what the space looked like, what the competition looked like and how we might structure a business to benefit from the clearly growing need for outsourced paraplanners.”

Fryer was fortunate enough to be in a position to take six months out and spend it in an adviser firm where he started learning the ropes of paraplanning. “The particular firm is an award winning, ISO 22222, British Standard financial planning firm and my six months with them gave me the direction and the confidence to want to be a truly great paraplanner.”

Moving directly into paraplanning was a steep learning curve, Fryer admits. “But throughout my career I’ve always challenged myself to go beyond my comfort zone. When I started at Fidelity I didn’t even know what an ISA was. I was thrown in the deep end and had to start swimming.” However, his asset management background did provide a lot of transferable knowledge and skills that he could bring to the paraplanning, he says. Given his background in asset management sales the obvious question is why he chose to become a paraplanner rather than an IFA? Fryer says: “The answer lies in the reason that I set up an outsourced paraplanning service rather than go in-house. Within an adviser firm the obvious career progression would be to become an adviser but the roles have very different skill sets. The paraplanner is very technical and analytical, whereas a large part of what an adviser does is the customer-facing element of the business. I really enjoy the technical and analytical elements. It’s something I’m good at. But I don’t want to be a paraplanner in just one company, I want to run my own business.”
Also, having liaised with financial advisers every day and seen the good and the bad practices, “I’ve had valuable insight into adviser processes and procedures and that is something extra I can bring to the table,” he says.

Currently Fryer holds the Certified PFS Discretionary Manager and is working to become Diploma qualified. “I’m going through the exam process because I recognise that it is a competitive industry that we’re operating in and qualifications provide a distinction in the market but qualifications aren’t everything. I am open and honest with my clients about what I have and haven’t got while I’m working towards Diploma. I offer to do the first report free of charge so that they can see the quality of the work and the way that I work, and also so I can see the way they work to make sure we are a right fit.”

Setting up Plan Works 

Plan Works was established in January 2014 and has grown to the size where Fryer is looking to take on another paraplanner in the firm on a freelance basis. “I’m at that tipping point where I have a lot of work sitting on my desk,” he says. “I don’t want the quality to be affected because I’m busy so I need to have someone there I can rely on to give work to which will allow me to build the business.
“I’ve spoken to other paraplanner business owners and they say that this is the difficult point, when you have to bring someone in and not only ensure they work in the way that you want them to but you have to commit to paying that person on ongoing basis. It’s a nice problem to have but also a nerve wracking one and a huge commitment.”

So when he set up Plan Works, was there a masterplan as to how he would build the business? “I was quite fortunate that my first client was the adviser firm I spent my six months training with. So I didn’t have that launch fear of going to market without having a client. My plan for the first year was to get up to 4-5 clients who were using us on a regular basis (he currently serves 8 adviser firms). The three-year plan is to have another member of staff and to be up to around 15 firms using us. Also, I’m looking to integrate software into the business to make us more efficient while retaining the quality and bespoke nature of what we do.”

Plan Works offers a full paraplanning, as well as administration and consultancy services, which draw on Fryer’s career in financial services. “We look to offer a bespoke service, which means we can be as involved in a business as the adviser wants,” he says. “On the administration side, we can take on writing out to the various providers, requesting the information and documenting and filing that according to how the adviser operates. What we try to do is not add additional processes to the adviser’s business; we want to fit in with the way the adviser is working. So, for example, if they use drop box for filing, we’ll integrate with that; if they want operate on email we’ll do that; or if they want to give us access to their PC remotely we’ll do that. We want to make the outsourcing of any piece of work as easy as possible.” 

Market developments 

Having analysed the paraplanning market before setting up Plan Works, how does he see it developing?
“There is no doubt in my mind that there will be a growing need for paraplanners whether outsourced or in-house. To give you an indication of growth, there are three firms in my local area all looking for paraplanners. Demand is there but supply isn’t.”
However, just how much and fast the market grows will depend on how adviser firms view the paraplanner role, he adds. “Some smaller firms might think that they can do all their paraplanning work. It will depend on whether the adviser firm recognises that what the client values is the time the adviser is sitting in front of them, not what goes on in the background, and they can see the paraplanner bringing something of value to the business.”

“The other factor is whether they want to scale the business. Those who want to grow their business may want to have a paraplanner to increase their efficiencies and allow the advisers to concentrate on bringing in new prospects and building relationships with clients.”
Typically advisers are looking to Plan Works to provide full paraplanning, Fryer says. “They will provide me with the Factfind and the adviser’s initial idea of what they want to deliver to the client. We undertake the research and deliver feedback on those initial ideas. Then we agree a course of action and compose a compliant report together with all the relevant documentation.”

Where Plan Works tries to stand out from other firms, Fryer says, is in constantly focusing upon improving efficiencies. “I’m always questioning whether there is a better way of doing things. A client might say we’re thinking of doing xyz and I’ll come back and say, have you considered abc?”

Charging structure 

While offering the first report free of charge may be unusual, in fact it is an effective way for the client and Plan Works to see if they are a good commercial fit, Fryer says. He limits the type of work he’ll take on within that first report, to ensure the workload is reasonable. “It enables the client to identify how we work, for us to identify how they work and at the end I produce a quote of what it would have cost to produce that piece of work. Providing both parties want to go forward from there we will add them to our client list.”
Currently, most work comes in on an ad hoc basis. On receiving the request, Fryer will call the adviser, establish the nature of the piece of work and then aim to have a quote with the firm within an hour, detailing the cost and a timescale to deliver the work.
However, Fryer says he is developing a retainer pricing structure, which will give adviser firms priority access to Plan Works’ services rather than take potluck on capacity under an ad hoc system.

“I’ve seen this work very well for other outsourced financial planning services. It gives the adviser firm that feeling of confidence that they know they have someone to do the work for them and for our business it provides regular cashflow and a bank of good quality clients with which we want to work,” he says.

Building the business 

Having started his own business and seen it grow, are there any tips he would give to paraplanners thinking of going down the same route?
“The first piece of advice I would give is value what you are doing. It’s very tempting to begin with to underprice yourself in order to secure the business. The problem with that is because you aren’t highly valuing what you do, the client won’t either.
“Secondly, if you are going to launch your own outsourced paraplanning business, it’s not just about doing the work. You have to have an interest in what it takes to grow the business. For example, learning what SEO is. When I first started Plan Works, SEO was just three letters that meant nothing to me.

“Also, remember that there’s doing the day-to-day work and then there’s running the business. These are two separate elements that to start with will take up a lot, if not all of your time.”
So is it worth the effort? “Not having the security of a wage at the end of the month can be hard but the element of fear that comes with owning your own business really drives you. It’s long hours, there are those fears and the doubts about what you’re doing but then you start to turn a profit and it all fits into place.

“Is it worth it? Yes. I’m glad I set up Plan Works. It’s by far the best thing I’ve ever done.”

Drawdown calculator 

In the course of his work, Fryer identified a need for a more accurate drawdown calculator and so developed one using Excel. He explains:
“I was working on a drawdown calculation for a client and spotted that the cashflow modelling software we were using was making assumptions based on linear positive returns; it wasn’t taking into consideration a market fall. As we all know, markets are unpredictable and, of course, the impact of a fall at the start of a drawdown period can have a massively different impact than one that occurs later on in retirement.

“The first calculator I made therefore factored in a market fall. We’ve since updated that version to include random growth figures within a specified range, so it’s a lot more like analysis based on Monte Carlo modelling. By using your maximum uplift and maximum drawdown numbers from your model portfolios you can get a more realistic idea of whether a client’s funds will last.”
The calculator is available to adviser firms and paraplanners for a small charge. Readers of Professional Paraplanner can obtain a discount lowering the price to £30.00. Just mention the magazine when ordering.