By Nicola Watts
There’s a lot in the press regarding a shortage in good Paraplanners and also discussions around why they are now able to command such high salaries.
When we recruited in late 2015, although there were a number of candidates, they weren’t necessarily of the calibre we were looking for, but they were expecting top level salaries because that’s what they’d seen others could demand.
For many, I think this comes down to a misunderstanding of what a Paraplanner really is.
The historical view, which still exists widely, is that this is a non-descript administration role, someone who is writing reports and completing basic research, but following instructions from an adviser.
However, the role has in recent years developed into something that is technical and demanding.
For me, a good Paraplanner is someone that is technically excellent. They need to be as good, if not better, than me, at least qualified to Diploma level, heading towards or already at Chartered level.
They will be at the centre of the advisory process, able to create the technical plan and challenge and collaborate with me to ensure that the advice being provided to the client is correct and of the highest standard.
Although of course I need to sign everything off, the Paraplanner’s level of expertise leaves me to concentrate on client financial strategies and relationships and managing my business. They are certainly not taking instructions!
So why isn’t this person an adviser? The Paraplanner role is often seen as a stepping stone to becoming an adviser.
But, for some, they love the technical aspect of the job and the thought of sitting in front of clients will fill them with horror or this just might not be what they’re good at.
Has this led to the shortages in candidates? In order to enjoy a higher salary that reflects their qualifications, they may be being pushed down an adviser route they’re not happy with.
They find that they can however potentially earn more and enjoy increased flexibility if they become self-employed or work for one of the many outsourcing firms out there.
But, why not encourage them to stay in employment as career Paraplanners in a position that they can excel at, a highly technical and demanding professional role for which they are respected and paid accordingly?
And so this leads on to how the role might develop further in the future. Some will no doubt continue down the route of becoming advisers and planners.
For those that progress their careers as Paraplanners, I can foresee an increasing need for them to attain FCA authorisation as they take on more and more responsibility for advice.
And of course that then leads to increased regulation costs.
But that’s a story for another day!
Nicola Watts APFS Chartered Financial Planner, Chartered Wealth Manager, CFPTM Chartered FSCI - director of Jane Smith Financial Planning
After joining the family business in 2000, Nicola qualified to provide advice in 2001, and has been a director of the business since 2006. Since the retirement of her mother (Jane Smith), Nicola bears sole responsibility for the management of the firm, and the advice provided to clients.
Nicola is married to David and has two young children, Emily and Olivia, and Poppy the black labrador.