Half of paraplanners believe they are underpaid despite the role becoming more integral and widely recognised within the financial planning process. Fiona Bond looks at the responses from our Parameters survey into paraplanner remuneration.
Professional Paraplanner’s latest Parameters Survey found that 50% of paraplanners feel underpaid, versus 37% who feel they are paid fairly. Just over one in 10 (13%) are unsure.
Findings from the data revealed that many paraplanners feel their workload is growing and evolving from report writing and research, particularly as younger, less experienced advisers enter the industry.
One respondent told Professional Paraplanner: “As more and more young advisers come into the market, some who have not been paraplanners beforehand, I am finding more and more is being passed onto paraplanners. A paraplanner’s role is also expanding in light of the increased use of things such as cash flow.”
The advent of Consumer Duty and growing regulation has also made the role of paraplanner more challenging.
“My role is high pressure and I have to cover many tasks which I didn’t when I first joined. Compliance has made our lives more difficult, especially with the dawn of Consumer Duty and the lack of clarity over what we should be doing,” one respondent said.
Another bemoaned the failure of salaries to keep pace with paraplanners’ growing responsibilities.
“I feel our role is becoming more and more integral to the whole financial planning process, a project manager if you will, and with the increased importance, the salaries haven’t caught up with this move,” they said.
There was a general consensus that although paraplanners are able to complete many adviser tasks, their remuneration remains significantly below that of advisers.
“I am aware that I earn substantially less than an adviser/planner with the same skills and experience, when in my role I can do 90% of the work an adviser does. Maybe there is some potential for better remuneration for paraplanners taking on a lot of the advice work, such as formulating full advice and helping present recommendations,” said one.
Another agreed: “Although progress has been made, paraplanners are still under appreciated and thus underpaid.”
The survey also shone a spotlight on the role of advisers in recognition of paraplanners’ value. One respondent told Professional Paraplanner that there is a “disconnect” between advisers who understand and value paraplanners and pay them accordingly and advisers who advertise for a paraplanner on an administrator’s salary.
The data also suggested a divide between those working in-house and outsourced/self-employed paraplanners, with the latter likely to earn more.
But while the recruitment market suggests that paraplanners could be earning more than the current average salary, respondents said the lure of extra money would need to be great enough to offset other factors, including the potential loss of flexibility and familiarity.
“I know I could get a little more elsewhere from recruiter emails but for £1k-£5k extra I don’t feel a move is worth it especially when factor in other variables such as potential for less flexibility with a new employer to Work from Home or that understands me and my circumstances. I know if I say I need to do something, generally I can have the time to do it, as I have that long standing relationship with my employer there is give and take and that is worth more than c£300 per month extra which could easily be gone in additional expenses such as fuel.”
Another said: “I am underpaid for my level of experience and qualification and could possibly secure up to an additional £10,000 elsewhere, according to the job market. However, I have really good additional benefits including 8 weeks holiday, PMI, critical illness and remote working which suits my circumstances and is currently more important than a higher salary.”
There was also recognition that the wide job scope of paraplanners can make it difficult for the industry to set salaries.
One respondent said paraplanners are “generally catch all roles”, expected to fill gaps in resources and deal with overflow from other departments.
“Looking at job specs across the industry, each paraplanner role varies with the amount of client facing / advice planning/ admin so it’s difficult to find consistency. I’m sure employers also find it difficult to offer consistent salaries and bonuses as they generally recruit to include tasks and processes which aren’t fully covered within their company currently.”
Main image: emil-kalibradov-BGu0J5wCah4-unsplash
