How different are paraplanners perspectives on paraplanning compared to financial advisers’ views? Ranila Ravi-Burslem, Intermediary Distribution Director, Scottish Widows and Embark Group examines the results of two independent surveys by the group for the answer.
Paraplanners and advisers work side-by-side but do not always see the industry in the same light. Through our recent Scottish Widows Investor Confidence Barometer, which survey advisers, and our Paraplanner Survey from earlier this year, we take a look at the key similarities and differences between their perspectives.
Paraplanners are in a good position
Paraplanners are in demand. Our Investor Confidence Barometer reveals that advisers are struggling to source new paraplanners. 69% of advisers are actively recruiting, with 68% admitting it was a challenge to source candidates for the role.
By continuing to distinguish themselves as key value drivers in the advice chain, paraplanners are demanding more responsibility and career progression. Our Paraplanner Survey revealed that 55% of paraplanners see themselves remaining in their current role for at least the next five years, with only 9% looking to move firms within the next 12 months.
We found that 81% of paraplanners believe their position adds more value to the advice chain than it did in the past and 75% of advisers agree. While the value of the role is now more recognised within advice firms, the search for paraplanners may be a sign that experienced paraplanners are at a premium as demand outpaces supply.
Paraplanners are not looking to move sideways at their current level but rather seeking more responsibility and greater professional development. This is a strong sign that advice firms need to nurture their pool of junior paraplanners, build out paraplanner career paths and training academies to retain staff and offer career development, and provide roles that offer more responsibility, rather than simply replacing existing roles as they become vacant.
Perceptions of value
Do advisers and paraplanners agree on where paraplanners add the most value? Between our Paraplanner Survey and the Barometer there are some similarities. For example, advisers see adviser support as the top area for paraplanners to add value (33%) and nearly half of paraplanners agree (49%), making it their third highest ranked area.
However, paraplanners are a lot more focussed in where they believe their value lies. When asked to rank the top areas in which they add value, 69% of paraplanners said report writing skills, compared to only 26% of advisers; 53% said technical analysis, compared to 26% of advisers; and 45% said advice recommendations, compared to only 27% of advisers.
At the other end of the scale, only 4% of paraplanners believe that providing due diligence is a key value add area, compared to 28% of advisers, and only 11% cited systems and tech expertise, compared to 31% of advisers.
Are paraplanners guilty of under-stating their value and putting too much focus on report writing? Perhaps the large divergence in the results for report writing is partly a reflection of time spent rather than pure value add, given it is a time consuming activity for paraplanners. Advisers on the other hand appear to be seeing value being added in a wider range of areas. This would fit with the varied and expanding nature of the role at many advice firms, with advisers clearly keen for support over and above the traditional core functions of paraplanning, such as reporting.
Advice firms can probably do more to come to a consensus on where they want paraplanners to develop their skill sets and align these needs with clear career development plans.
A united front on new opportunities
While advisers and paraplanners may disagree on where paraplanners are contributing the most, both groups appear to be united on where the advice sector should be focussing its efforts.
91% of advisers are worried about losing money as wealth moves from older to younger generations, with 1 in 4 advice firms not yet having an intergenerational planning strategy. Meanwhile, paraplanners ranked intergenerational planning as the number one opportunity for financial planning firms.
61% of paraplanners are aged between 25 and 44 and are predominantly female¹, compared to advisers who are typically male and average in their mid-50s². As inherited wealth will likely either go to a widow or transfer straight to the client’s children, this is a clear opportunity for paraplanners to increase their engagement with clients and their value add.
Indeed, advisers recognise this as it was one of the top three areas where they see paraplanners adding value through their greater ability to engage with younger and female clients.
Paraplanners may well sit in the perfect space to aid advisers with intergenerational planning, one of their biggest concerns, and contribute more in areas in which advisers are not always currently leveraging their skills. Firms that take the time to examine their adviser-paraplanner relationships may well find themselves with a significant advantage in the coming years, with a loyal and highly-skilled paraplanning team working seamlessly alongside advisers to deliver the best possible client outcomes.
¹ Research in finance report 2021: https://eumultisitev4prod-live-eb461540d2184169bb77db2b062d9318-f268f99.s3-eu-west-1.amazonaws.com/fnw/guides/technical-resource-centre/paraplanning-in-pandemic-2021-report.pdf
² Money Marketing 2022: https://www.moneymarketing.co.uk/news/paraplanners-never-had-it-better/
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