In our recent parameters survey we asked for your opinion on remuneration in the market. Fiona Bond delves into your responses.
Paraplanning could benefit from a pay structure review, according to the findings of our latest Professional Parameters Survey.
Asked whether the pay structure for paraplanners should be reviewed given the role paraplanners now play in financial planning, nearly two thirds (64%) agreed. In stark contrast, just 10% of paraplanners said the industry did not warrant a general pay review.
Among those who welcomed a pay structure, one told Professional Paraplanner: “There is always going to be a wide variation based on qualifications, client contact and experience, however, it would be useful to have a national pay grade system in place for paraplanners.”
Another told Professional Paraplanner that there should be greater value placed on the skills of paraplanners. “Qualified paraplanners have very important technical skills which have been studied and worked towards. Therefore, pay structure should recognise this,” they said.
A further response suggested that a pay structure should be reviewed in line with a combination of knowledge, experience and qualifications.
“As an employer I would not rely solely upon the relevant qualifications as this just shows me that the person is good at passing exams,” they explained. “Whilst this is important to show commitment, I have come across many paraplanners with letters after their name who have no industry experience and their output does not reflect a rounded understanding of the role.”
The findings suggested that the level of pay for paraplanners can vary greatly according to the value placed on the role by advisers.
“Some companies underpay and do not value paraplanners but some companies really value the role of paraplanner and believe they are an integral part of the advice process and therefore pay accordingly for that,” said one respondent.
However, many respondents said that the issue of pay often arises due to a lack of job definition for paraplanners. A combination of regulation, growing client demands and advances in software including cashflow modelling and technical research has led to the role of paraplanner evolving greatly in recent years. Yet, many still struggle to see the role of paraplanner as separate to administrator.
One paraplanner said: “I feel most firms that value paraplanners seem to remunerate them fairly. It’s clear from job adverts which firms don’t value paraplanners or don’t really understand everything a paraplanner does. I think this is the issue more than anything, some see paraplanners as a report writer or glorified administrator, whereas other firms see them as an integral part of the advice delivery team.”
Another highlighted that without a firm definition, pay could centre on qualifications rather than experience or knowledge. They noted that graduates can sometimes believe that achieving level 4 is sufficient without the ability to structure a report or logically tackle a case.
“There should be a certain level of attainment that is not just level 4,” they said.
A fellow respondent noted: “It would be nice to see an industry standard of what is expected but then you would also need to define job roles. Some paraplanners have many years’ experience without qualifications whereas others may have a diploma that they have achieved within 6-12 months. That doesn’t make the latter a better paraplanner.”
Another said pay should depend on the responsibilities of individual paraplanners and noted that discrepancies between how firms utilise paraplanners has led to disparities in pay.
“It depends on what the firm needs/ wants. If the paraplanner only writes reports but does little research or client interaction, then remuneration should reflect this regardless of level. If the firm needs client-facing in-depth research and report writing remuneration should increase,” they said.
One paraplanner also raised the issue of gender disparity in the industry.
“I think there’s a belief that paraplanners are just support staff and that the only valuable contributors to the business are the advisers. They still tend to be male while paraplanners are often female. With decisions made by men and for men it’s unlikely to change.”
However, one respondent who believes the sector does not need a pay review argued that it should fall to individual employers to pay fairly.
“Pay structures are down to each individual company, it’s not like paraplanners are a public sector service,” they pointed out.
Another echoed the sentiment: “The role varies so much from firm to firm that I think it would be difficult.”
Main image: sebastian-herrmann-O2o1hzDA7iE-unsplash
