A "simple" plan

As a paraplanner, there's one comment I dread the most from an adviser: "This will be a straightforward plan."  

It normally means a heap of conflicting information, projections that show the cashflow won’t support the recommendations and a frustrated adviser wondering why this simple advice is taking so long to produce.

Ask the people in your practice how long it takes to create an advice document. The answers will vary greatly. Advisers and practice managers, for example, are likely to think they take significantly less than those who are doing the research and actually writing the document. 

The plan might seem straightforward but the journey to get there is often a complex and time-consuming process.

Imagine, if you will, trying to navigate a simple route on Google Maps. It's a straightforward path: point A to point B. Now imagine trying to navigate a complex maze with countless twists, turns and dead ends. This is the reality of creating a complex financial plan.

While the difference in time taken for basic and complex strategic advice documents might seem minor, the reality is quite different. The wider the scope of advice and client information included in the document, the more traps we can fall into. 

Looking at the final product, though, you might never know those traps were there. This can lead to advisers underestimating the amount of effort it can take to reach this stage. 

Behind the scenes, we’re gathering information from multiple sources, conducting complex financial modelling and ensuring the file remains compliant with a mountain of ever-changing regulations. Ask anyone who has been lucky (unlucky?) enough to build a house – the smallest mistake can lead to significant delays and rework!

The complexities of complex advice 

A complex financial plan isn't just a longer version of a simple one. It involves a multitude of factors, which include:

Client complexity

Clients have more diverse assets, complex structures, family dynamics and unique financial goals that require a more in-depth analysis. 

The days of rolling every client into the same super fund regardless of their situation are, thankfully, over. It's no longer one-size-fits-all but rather like tailoring a suit to a specific individual, with every detail considered.

Data complexity

Gathering and organizing accurate client data can be time-consuming but it’s important to do before any modelling is completed. Having additional information provided once the plan is commenced can mean essentially starting again. 

Even the “smallest” change can affect cashflow, assets and the suitability of the advice for the individual client. 

Regulatory complexity

The ever-changing compliance landscape adds another layer of complexity, especially when the advice is unique and the license/compliance team may not deal with it often. 

Getting a clear and consistent answer to what is required and how things need to be disclosed can be a battle in itself.

Bridging the gap 

To bridge the gap between perception and reality of what goes into an advice document, we need to:

• Increase transparency: practice managers and advisers should be more aware of intricacies involved in creating complex advice documents.
  
  They need to understand the steps taken to get from the initial client appointment to the SOA presentation stage. 
  
  
• Foster collaboration: effective communication between paraplanners and advisers can streamline the process and reduce unnecessary delays.
  
  Knowing who is doing what task and the expected time frame for each to be completed ensures that all parties involved are working towards a timely outcome. This also ensures a clearer journey.
  
  
• Leverage technology: using software that can be part of the data gathering, research, modelling and advice creation ensures everything is in the one place and avoids doubling up of work.
  
  Advisers often provide us with “research” done on a separate program that then needs to be redone in Xplan to ensure a flow into the advice document. This leads to discrepancies and reduces efficiencies for both parties.

Outsourced paraplanning services such as TNT Group can be a valuable solution for practices seeking to improve efficiency and reduce costs. By outsourcing specific steps in the advice process, advisers can focus on what they do best: building relationships with clients and providing strategic advice. 

Understanding the complexities involved in creating complex financial plans can help of us better-appreciate the value of paraplanners and the importance of efficient processes.