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Becoming a specialist – Benjamin Fabi, Principled Paraplanning

10 February 2020

Benjamin Fabi talked to Rob Kingsbury about the first two years of running his outsourced paraplanning firm Principled Paraplanning, his ethos and why he has specialised.

First published in the February 2020 issue of Professional Paraplanner.

Benjamin Fabi founded his outsourced firm, Principled Paraplanning, in January 2018, opening doors to clients in March of that year.

It was the second time in his 11-year career as a paraplanner that he had set up his own outsourced paraplanning business. The first one he ran between 2010-12 but when it wasn’t working out as he wanted, he changed career direction first joining The Time Bank and then going in-house.

In the intervening years, he says, he has put eight exams under his belt, achieving Chartered status and Fellow of the PFS, as well as becoming clearer on the kind of firm he wanted to establish and the kind of adviser clients he wanted to work with, i.e. those who hold the same values as he does.

One of the main differences between 2010 and now, he says, is that previously he was working as a financial planner and a paraplanner as well as serving a range of different advice firms. At the time he described it as being “five different paraplanners at once” because of the spread of work he was undertaking. Now he is more focused and over the past two years has established a reputation for delivering highly technical and specialist work for clients.

“Given the market for paraplanners and my own professional development, I felt there was a real opportunity for me to become the technical expert for firms, working not only as a paraplanning resource for businesses but also as the technical resource for paraplanning teams.”

He works primarily with small, directly authorised businesses that need an independent paraplanner to do the technical aspects for them, either because they don’t have the time, they lack the resource or the need someone independent to analyse a case from a technical perspective. “I am leveraging my knowledge and skills sets, my technical expertise and experience of paraplanning gained over the past 11 years, to deliver a service my clients value,” Benjamin says. This includes clients who have their own in-house paraplanning teams but who keep him on a retainer to help with the technical aspect or to undertake in-depth calculations.

“I am working with people who are as qualified as I am and businesses I would like to be running if I were an adviser. They are small and dynamic and want to affect change for the good of the profession. They are the ones doing cashflow planning and who are keeping DB pensions where they are because they are right for the client and not passing assets over a line so they can take a fee.”

As the name of his business suggests, the principles and ethics of financial planning matter to Benjamin. “It’s about aligning my principles and the Graduation Oath I took when I became a PFS Fellow with the people and businesses I am working with.

“When you’ve worked across a number of businesses you see the difference between the industry side of the market which is self-serving, the brokerages that are focussed on their bottom line first and which have almost a veneer of doing the best thing for the client, and the professional side, those firms that are truly focussed on advancing the professionalism of what we do, challenging whether everything is right for the end client.”

From a business perspective, focussing on his niche and the kinds of businesses he wanted to work with has been a form of marketing. “People can see from my website who I am, what I do and what I believe in. They can get the measure of me and it tends to mean I get approaches from the people I would like to deal with.

“There is a growing community of people who are focussed on financial planning as I think it should be done and I’ve had a lot of referrals from the people I work with.”

NextGen

One of the key phrases that comes through when viewing the Principled Paraplanning website is ‘advancing the profession’. Hence, it’s no surprise to learn that Benjamin has become involved with the NextGen movement within the financial planning space.

“There is an entire wave of NextGen financial planners coming through with exactly the mindset I was looking for when I decided to become outsourced again. There is a common thread for us all which is focussed on what the client wants to do, and how we are going to help them achieve that. Everything else, the products and tools they use, in the context of the client’s needs, become less important. What’s important is the purpose for which they are being used.

“In addition, many NextGen members are going out to universities and sixth form colleges and talking about financial planning as a profession.”

Benjamin is a keen participant in the NextGen forums where he is happy to answer his peers’ questions and share the knowledge he has gained, with that view of helping to advance the profession. He does the same in the Paraplanner Powwow Big Tent forum and was recognised with a one-off award for ‘Outstanding contribution to the paraplanning community’.

“It’s exciting for me to be working now with this type of firm and to be part of this dynamic for change and to be able to feed back into it.”

Setting up the business  

In setting up the business, Benjamin says the first few months required “some heavy lifting”, making sure his proposition was written down “and that I had all the necessary documents in place, the terms and condition, letter of engagement etc, as well as the regulatory elements.

“Then, in the first six months, every time I undertook a task I knew I would need to do again, I would create a spreadsheet or other resource template to save me time when next I came to do it, so I was streamlining my operations as I went along.”

Also, he has running the business down to a fine art. “I don’t find it takes me a lot of time. I track all my time via Harvest and looking at my time report to date this year, I’ve spent 85% of my time on billable hours.”

While primarily operating a retainer model, Benjamin says he doesn’t apply the retainer for a period, usually around 3 months, while he waits to see if he and the client can work well together and to assess the regular volume of work. He then charges a percentage of the expected work as the retainer and the client pays monthly for everything above that level. “I’ve never had anyone not use up their retainer.”

Working from referrals and highly focused marketing channels where he is targeting a particular type of adviser, Benjamin finds most people who approach him to undertake work for them are on his wavelength. “I’m going to attract the kind of firm that needs my level of expertise and experience and will get the value from it; I’m at the more bespoke end of paraplanning, which means costs vary and I don’t have a price list.

“When new clients contact me, we’ll have a conversation to see if we’re a good fit for one another. I won’t take on clients unless they are happy that I am going to challenge them on their advice if I think there is a better way for the client. But I can count on the fingers of one hand the number of times I’ve had to raise something with a client in the past two years. Most of my clients want the security of independent advice on a case. They want critical input. They want me to ask ‘Why?’.

In terms of business challenges, a major one he recognises is how he scales the business, when it is built around him doing the work. “The question I have is how to bring other people into the business. I’d need to be 100% sure they have the same foundation and mindset as me. This is something I’ll be tackling over the next 12 to 24 months.”

Advice for those going solo

If there is one piece of advice he would give people setting up their outsourced business it is “try not to force anything”. He explains: “If a potential client talks to me I know they are interested but I’m not going to chase them to sign up. They will come when they are ready. I had a client who first contacted me in November 2018, they followed up in July 2019 and I got my first case from them in October 2019. That was right for them.

“Also, strive to put forward the best version of yourself. If you are honest in your opinion and generous with your time and knowledge to those who will value it, they will better understand who you are and in time that will pay off.

“It’s letting people see that you are someone who is going to add value to what they do. And they will be the people you want to work with.”

 

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