Dispelling Misconceptions about Paraplanning

So, let’s step into the mysterious world of paraplanning, where myths and misconceptions can disappear like a snowflake in the wind. Joking aside, before we start, let’s forget the notion that we’re mere number crunchers, secluded in windowless rooms from 9-to-5 with limited contact with the outside world. 

In a similar fashion to accountancy, the paraplanning industry has been brought into the modern era with the use of cutting-edge technology, but our public persona has failed to move as quickly. We are an integral part of many businesses, working with clients and using our skills and experience to enhance the services they offer. 

Anyway, let’s get back to the subject at hand. What better place to start than with number crunching, perhaps the number one myth when it comes to understanding the life and times of a paraplanner?

Myth 1: Paraplanning is Only About Number Crunching

This is by far and away the number-one misconception when it comes to paraplanning, the idea that we sit at a desk number crunching all day (and sometimes late into the night!). I’ve no doubt our forefathers, the trailblazers of our industry, spent a lot more time number crunching before the introduction of new technology, the Internet and, more recently, artificial intelligence.

I wouldn’t say we have it easy. Still, we certainly have a lot more time to spend talking to clients, with automated procedures and even voice recognition systems reducing the chances of triggering carpal tunnel syndrome!

Now that we’ve put those old calculators down, we are a lot more efficient, which makes the outsourcing of paraplanning affordable to the masses and not just a few (sorry, I sound like a politician!). So, that’s myth number one dismantled; where next?

Myth 2: Paraplanners Lack Client Interaction

They say a picture paints a thousand words, but words tend to resonate better when you’re trying to explain a complex investment procedure to a client! 

It may surprise many people, but we actually enjoy client interaction – not just when we escape from the darkened room, but regularly. Actively welcoming the opportunity to speak with others, living and learning along the way, yes, we can hold a conversation. 

Client interaction is a critical part of any business, and we think we’ve done pretty well mixing new technology with simple chat. Whether our clients need help firefighting (yes, we all make mistakes) or a sounding board for ideas about scaling their businesses, we are there to support our clients in any way we can. 

Is this what makes us different from our competitors? We hope so, and the testimonials on our website suggest we are hitting the spot.

Myth 3: Paraplanners Are Not Involved in Strategic Decision-Making

As Steve Jobs once said, you don’t employ experts and tell them what to do; you let them tell you what to do. We don’t want to bang our own drum or pat ourselves on the back too much, but we’ve been there, done it, and the experience amongst our team is impressive. 

So yes, we do get involved in strategic decision-making, we do advise clients based on our experience and, surprise, surprise, many clients ask for our input. More so when they see us at work and understand what we can do.

On the surface, it looks as if you are buying into a simple outsourced paraplanning service; in reality, you’re actually buying into years of experience, expertise and problem-solving experts. So come on, hit us with your best shot; how can we help?

Myth 4: Paraplanning is a Lower-Skill Position

Where do we start with this particular misunderstanding, as perhaps one of the longest-standing urban myths?

The fact that we work behind the scenes (to a lesser extent than in years gone by) has probably helped the continuation of this impression. However, it’s time to bring the industry and our services into the 21st century! Historically, many paraplanners eventually flew the nest, moving on to successful roles as financial advisers, but times are changing.

Yes, paraplanning is actually a career choice for many of us, and it has to be said, a very satisfying and fulfilling job. We certainly challenge the concept of low-skill entry-level positions. 

Yes, we take on junior team members, but there needs to be a degree of interest and understanding of the industry to make it work. They aren’t just here to make the coffee and pass the Hobnobs around. Remember, we all had to start somewhere.

To provide clients with the highest calibre of staff possible, we encourage existing and future colleagues to consider qualifications. Enhancing expertise and experience together, creating an in-depth team…you get the picture.

Back to the topic at hand…

Myth 5: Technology Makes Paraplanners Redundant

Ah yes, the old IT/AI argument, the end of low-skilled paraplanners, replaced by………..machines? This prompts the response: well, if you’re not in favour of IT/AI, then you must be against it. Really?

We are just like any other business; we adapt, we build, we’re flexible, and we do (believe it or not) make the best use of IT and, more recently, AI. Balancing efficiency with safety and output with fees, we retain control but manage to get the best out of the latest technology. Without this flexible approach, we couldn’t provide our cutting-edge services at affordable prices. 

If you really think that technology could make paraplanners redundant, where does it end? Would any industries be safe? The key is to be flexible and amenable, learning to work with and making the best use of new technology. This may sound a bit harsh, but adapt or die.

Myth 6: All Paraplanners Are the Same

Well, we have a flair for finance, are good with numbers and are great at problem-solving, but not all paraplanners are the same. How can we put this? A doctor specialising in heart problems couldn’t help with a migraine; a mechanic working on Lamborghinis might struggle to strip down and rebuild your vintage motorbike. 

As with any industry, there are areas of expertise and general areas of interest, but how do we make the most of it? We ensure the team works by putting together different skill sets, personalities, expertise and interests, which means that we generally have all of the bases covered. It’s not quite as easy as that; we’ve made it sound easier than it is, but you can see what we mean.

Myth 7: Paraplanning Offers Limited Career Advancement

Last but not least, there is a misconception about limited career advancement opportunities for paraplanners. If that really was the case, how do we manage to retain our high-calibre colleagues?

We realised many years ago that building a successful business means retaining experienced, high-calibre staff. How do we do that? Opportunities for career progression, enhanced salary packages and a great working environment are critical to our staff retention. We value our employees, and so do our clients!

Joking aside, many people see paraplanning as a career, not just a useful stepping stone to a financial services company. As the number of services we provide continues to grow, in tandem with our client base, we have to incentivise employees to stay, make them want to work for us and pay them accordingly.

Here at Parafinity, we actively encourage employees to increase their qualifications, experience and expertise, which is a win-win situation. Our colleagues have more to offer the business and clients, and they are also extending their own CV. Why would you want to leave?

What does this mean for the end client?

In a similar fashion to accountants seen as nothing but “number crunchers”, the role of a paraplanner is very different today than it was a decade ago. The outsourcing of such services brings not only time efficiency but also cost savings. It is easy to forget that you are also tapping into the expertise and experience of the outsourcing company and individual paraplanners. This allows you more client-facing time, creating new business opportunities and expanding your existing services.

It is more appropriate to see a third-party paraplanner as an extension of your existing business instead of a stand-alone service. The ability to talk through situations and consider various options ensures we can find the best solutions for our clients.

Conclusion

The financial services industry is a unique animal in that some areas are incredibly proactive when it comes to new technology, while others are more traditional-based. This is probably one of the reasons why services such as paraplanning attract many misconceptions. The paraplanning outsourcing industry has seen significant growth in recent years, creating service benefits and a means of tapping into experience and expertise. We don’t spend our days in rooms with no windows, tapping away on calculators and writing on Post-it notes lol

Developments in technology allow in-depth analysis of fund performances, vast rafts of data, and the ability to forecast cash flow as well as create new services. It is now possible to promptly match individual investments with a client’s risk profile and long-term financial goals. This is critical not only for client outcomes but also as a means of evidencing compliance with regulation. As the regulatory trend evolves, it seems almost certain that additional rules will be introduced with a greater focus on investment returns, client understanding and value, and long-term financial planning.

The ultimate goal is to give financial advisers more client-facing time by reducing time spent on research and administration. We work with many in-house paraplanners, providing support and additional capacity when required, although some clients outsource all of their paraplanning requirements to us, so they can maintain their focus on client relations.

Hopefully, we have addressed a few myths and misconceptions about our role in the financial planning profession.