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Advice Efficiency
4 MIN READ

The paraplanner of the future

Tamara-Morey's avatar
Tamara-Morey
Icon for Advisely Partner rankAdvisely Partner
2 months ago

At the height of the GFC, I took on a role in a regional practice as a "paraplanner".

I was as green as they come and wasn't entirely sure what, exactly, I would be planning. One of my first tasks was to call our margin loan clients and let them know they were in a margin call and had to either invest more or sell down in a plummeting market.

What an introduction. 

Back then, most paraplanners were like caterpillars: destined to morph into financial adviser butterflies. Paraplanning was a stepping stone; a safe space to learn the ropes and develop knowledge.

However, the last 10 years have seen the rise of the career paraplanner. And why not? 

Many paraplanners have peeked into the advising world and decided that they prefer to stay cozy in their paraplanning cocoon, where they can get lost in a challenging cashflow model or nuanced policy interpretations – all while sipping coffee in their pyjamas. This evolution reflects a world where paraplanning isn't just a stepping stone; it's a whole charming profession in its own right.

So, what does the future hold for the paraplanner? 

Ask any financial adviser: a good paraplanner is worth their weight in gold. Paraplanners are the silent workhorses in our industry: behind-the-scenes soldiers, magicians of modelling, keepers of policy and Xplan gurus. They are the practice’s compliance safety net and the first line of defense at audit time.

But a great paraplanner possesses an even more remarkable ability: they are "time-makers" for advisers. A well-utilised paraplanner gives time back to the adviser, and time is perhaps an adviser's scarcest commodity.  

The paraplanner of the future won’t simply be punching documents out of Xplan and playing policy enforcer, because – hold onto your hats - these paraplanners, and this traditional style of paraplanning, will become extinct. It will be made redundant by better tech and less red tape.  

Sooner or later, AI will transform the landscape of advice production, automating the lower-skilled tasks of the paraplanner’s week (we live in hope for sooner and not later). Furthermore, the QAR changes should encourage shorter, simpler advice documents. That’s a big win for the clients, but fear not, dear paraplanners – your jobs are far from obsolete!

After all, who else will decipher the cryptic, scrawled client goals, ensure they are "SMART" goals and connect them to the advice? Who will pull together the strategy, suggest improvements and navigate the tech? I hope by now we all agree that this should not be the adviser. (And if you don’t agree, take a quick detour here.)

The paraplanner of the future will be more knowledgeable than the adviser. They will be a strategist, a trusted second opinion and a challenger of adviser thinking so as to build even better advice. They will be the adviser’s right-hand person.

And this adviser (the future adviser, complementing the future paraplanner) doesn’t touch Xplan. Ever. Or a plan request, a research document or working paper. Instead, they briefly Zoom with their paraplanner after the client meeting to convey their thoughts and ideas, and then they move on to the next client meeting. 

These advisers are the holder of the client relationship, the client advocate and the co-strategist. And nothing more. 

Sound simple? It can be. But for this model to succeed, there are some key points to consider:

Trust

The adviser is ultimately responsible for delivering appropriate and compliant advice. So it takes a profound shift in mindset to entrust their paraplanner to assist with the strategy and product selection.

For advisers used to maintaining tight control over every aspect of the advice process, relinquishing some of that control can be daunting. But as they witness the positive outcomes and enhanced efficiency that result from this collaborative approach, they will begin to appreciate the value it brings.  

In our business, we’ve transitioned some of the more controlling advisers (self-confessed!) to this model – and they’ve never looked back.

Onshore paraplanning

Offshore support has proven successful in tasks like administration and basic paraplanning. But the paraplanner of the future is not simply completing set tasks in a pre-determined way.

They are out-of-the-box, critical thinkers, proactively challenging and anticipating the adviser.  Opting for onshore paraplanning vastly enhances the ability to achieve this level of engagement and collaboration. And the extra labour costs incurred are far outweighed by the added value of adviser capacity.

Key person risk

You might be feeling at this point that the adviser is sounding dangerously dependent on their paraplanner. And you would be right. So what happens when that paraplanner is sick or away? Does all work grind to a halt? 

In the case of an internal paraplanner, the answer is often yes. But the paraplanner of the future is one highly-skilled team member, belonging to a larger, equally-proficient team who can step in at a moment’s notice without any disruption to the adviser’s process. This points to medium-to-large Australia-based paraplanning providers, as they possess the resources and expertise necessary to mitigate key person risk effectively.

Metamorphosis 

The line between the adviser and the paraplanner is shifting. And it has to, if the advice profession is ever going to meet the demands of the thousands of Australians needing advice. 

So the next time you consider your paraplanner, ask yourself: are they a "time-maker" in your business? Because it’s never too early to step into the future.

Updated 2 months ago
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