What prospects for outsourced paraplanning over the next few years?
2 July 2019
We asked Scott Daniels, director of the PLUS Group, for his views on the outsourced paraplanning market going forward.
There is no doubt that the market is much more saturated with outsourced and self-employed paraplanners than it was when we set up PLUS Group in 2013.
That said, I think there’s still huge opportunity for paraplanners in general, although now it is probably more difficult to scale as quickly as we did.
What’s important is to position yourself as a qualified professional, the person that knows what they are talking about and can have an equal relationship with the advisers. That’s what’s valued by advisers, people who they can bounce ideas off and have that conversation with – somebody who can challenge their ideas and point out alternatives, so they get the best outcomes for the client. The best advisers welcome that.
There are other practical drivers that, I think, are going to make paraplanning in general more prevalent in the industry.
Firms are restructuring and I can see a point where the advisers essentially manage the client relationships and gather the fact find information and what the clients’ aspirations and goals are, etc, and maybe formulate the overall advice, and the paraplanners will do the research and look into things in a lot more detail and actually put the plans and recommendations together.
This makes sense because the paraplanners are often more technically qualified than the advisers and because they don’t have direct contact with the clients, paraplanners can look at it from pure hard-and-fast facts, rules and regulations perspective – it can take the emotional side of things out of it.
I think that split approach is the way the industry is going. It allows the advisers to go out and see more clients and provide more advice to more people. I think advice will be all the better for it as well.
That’s why I think it is important to differentiate between a report writer and a paraplanner. Someone who is a true paraplanner can formulate the advice based on the clients’ circumstances and the tax implications, etc, and challenge things where necessary.
As a company we’re geared up to deal with that change. It’s a more collaborative relationship which gives the best outcome for the client. I do think that’s where the industry in general is going and should go.
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