Should you Consider Outsourced Paraplanning?

Unless you’ve taken a wrong turn somewhere, you’re here reading this because you’re considering outsourcing your paraplanning. Great! Allow us to make a case to you. 

In fact, let us give you eight mini cases, all adding up to a killer one. These are all born of experience – our clients time and time again tell us these are the reasons why they choose to engage us for their outsourced paraplanning. 

What is paraplanning?

We know most of you know, but not everyone does. You may just be starting out on your journey. Or unaware of just how broad our skills are but, for those who are well aware of what a paraplanner does, then save yourself 30 seconds and skip this part.

If you’re still with us, paraplanning is all about the provision of support services to financial planners (a bit formal, but that’s what we do), taking in:-

• Research and analysis in all areas of financial advice
• Portfolio reviews
• Financial cash flow modelling
• Report writing
• Compliance and regulatory requirements
• Associated admin 
• Ongoing support

Skilled, high quality, high impact work, we’re sure you’ll agree!

So why not keep it in-house?

Outsourced paraplanning v Hiring a paraplanner

Where do we begin comparing outsourced paraplanning to hiring a paraplanner? Well, by considering how you balance efficiencies with maintaining high quality advice and service. 

Our case is that the efficiencies are precisely what allow you to maintain high quality advice. 

1. Cost-effective

Money talks in the business world and it positively screams in financial services. On average, it costs 1.5 times an employee’s basic salary to maintain employment. So that paraplanner on £50,000 a year costs you £75,000 a year – which is probably a conservative estimate because you can’t easily tag a price onto some of the more intangible costs. 

Our packages range from £900 to £1,900 monthly inclusive of VAT for output which, based on our pooled, flexible inhouse resource and efficient way of working exceeds that of the average employed paraplanner.

Depending on your specific situation, we’re between half and one third of the cost of taking on an employee.

Outsourcing statistic: Only 25% of British companies have never outsourced

Outsourced paraplanning means you can forget about National Insurance, PAYE, salaries, 

pensions, training, and other additional costs. You won’t need to think about holiday cover or sickness pay. By outsourcing paraplanning services, you get total value for money, nobody sitting idle costing you £75,000 a year. 

In plainer language, we are a significantly more cost-effective way of getting more done, without any of the hassle of employing someone. 

2. Flexibility and scalability

The flipside to sitting idle is having too much work for one person to do. 

If you have growth plans, the ability to flex delivery capacity up at short notice is essential. There is not much to gain from generating new clients if you can’t deliver, or have to reduce the quality of the service, especially in the post-Consumer Duty world. Outsourced paraplanning removes one of the major blockers of scale – formulating the advice. 

No recruitment headaches, no second guessing how many staff you will need one month, six months or one year down the line. Outsourcing to a paraplanner brings with it the benefits of “fractional support”, the ability to pick and mix different skill sets as and when required. This avoids the cost of taking on one or more underutilised full-time employees while creating a valuable degree of flexibility.

Extra work, pass it on to us – simple. We could ramp up your support tomorrow; how long would it take to find, train, and build an in-house team of paraplanners? As a business director/owner, aside from the practical benefits, the extra thinking time can be priceless!

3. Specialist expertise

Your in-house paraplanner will no doubt have great experience. But will they have come across syndicated property purchases within SIPPs? Or repatriating Maltese-based pension contracts? Or using Lloyd of London Underwriting for Inheritance Tax planning? Having a team of outsourced paraplanners means the combined knowledge of a diverse team with specialist expertise and a culture of sharing that knowledge and expertise between their colleagues.

We’re also available to support on more than just case work. We have helped our clients adopt new systems, processes, tools and templates. We have built Centralised Retirement Propositions for clients. This all gives us more than the average level of insight into how the pieces fit together for you, or how to advise on how they could better do so. 

We also have a range of professional qualifications and invaluable experience which allow us to deliver extra value. Our core team comprises higher education in law and years of practical experience in accountancy firms, so we understand the full spectrum of professional services. If you’re from those sectors and run a financial advisory channel within your practice, we are quite uniquely placed to support. 

Outsourcing statistic: A report in 2020 found that 73% of UK accountants recognised the positive effect of outsourcing

This is where we stand out, where we provide added value for money, a proactive sounding board for advice, guidance, and ideas. Our team structure works perfectly, with experienced paraplanners focused on building and maintaining client relationships, as well as finding new clients, ably assisted by a highly qualified support team. Each part of the team is an important piece of the jigsaw, providing capacity with the expertise to discuss issues and find solutions for clients and potential clients.

We invest in employees, in the business, new technology and training to create a formidable service. If we were on Mastermind, our chosen subject would be, you’ve guessed it, paraplanning. But we do have lives outside of the office – honestly, we do.

4. Compounding Gains

We take the time to understand your unique requirements as a business which means that, when the report lands on your desk, you can speak to your client knowing you are fully prepared. You deal with the same person each time, and because the report has been written by someone you know and who knows you, the efficiency gains compound over time. 

That efficiency progresses over time, too, due to your ability to manage costs and idle time more tightly, as well as from delegating some of the regulatory responsibilities to us. 

5. Ease of dealing with Parafinity

You get the best of both worlds, a virtual colleague when required but at a fraction of the price of a full-time employee. We may not physically be sitting beside you, but we are close by – at the end of the phone, an email, or a Teams chat. No ticket system and waiting for hours to have to then start from the top with someone you’ve never spoken to before. 

And yes, this is a kind of efficiency and yes, we did squeeze another reason in there.

As this is our core business, our experience means that we have fine-tuned how best to interact with clients. Meeting booking software is an integral part of the work handover process. 

Our case request form has two questions, “What is the case about?” and “What do you want us to do?” – does it get any simpler and straightforward?

When it comes to speed and turnaround times, the industry average for outsourced paraplanning is anywhere between 5 and 10 days per case which compares favourably to in-house services. The forward thinking nature of a paraplanning business also means they are likely to keep a closer eye on the jobs market and prospective employees in a way that advisory firms might not. 

Having the skills to scale at short notice means that outsourcing companies can be operationally efficient, getting things done much quicker than in-house paraplanners who have to context switch several times a day. 

6. Focus on core activities

Workflow in the advice world can be unpredictable. 

As a financial advice business, outsourcing paraplanning work allows you to refocus your time, energy and capital on future growth and the day-to-day management of client-facing services. 

We also work with many accountancy and law firms as they introduce complementary financial services, while leaving them to focus on their core business, without having to upskill to monitor a paraplanner as well as the adviser team. 

We are experts in paraplanning; you are experts in your core business.

7. Risk mitigation

The majority of your business activities carry a degree of risk – there is no escaping from that. 

However, outsourced paraplanning allows you to introduce a degree of risk mitigation. As an established paraplanning business, we are up to date with the latest regulations, compliance and legal liabilities (our legal grounding helps!). Consequently, our outsourced paraplanning services are all carried out within this framework. As our work is fully compliant, your work is fully compliant, reducing your compliance burden.

Outsourcing statistic: Many accountants are now outsourcing compliance operations, allowing them to focus on their core business

8. Employee retention – avoid the stress

Last but not least, the subject of employee retention is one that employers dread but often face regularly. Imagine taking on an in-house full-time paraplanner, training them, providing the latest technology, and introducing them to your clients, only for them to be poached by a competitor. It’s nearly as impactful a risk as the adviser themselves leaving. 

There will always be demand for highly skilled, experienced paraplanners, with many companies willing to pay over the odds for good ones.

Outsourced paraplanning transfers this risk to us. In order to mitigate this we pay our teams well and also take a flexible approach to working practices. Appreciative of our colleagues, we aren’t seen as a stepping stone and instead attract career paraplanners. This allows us to plan ahead with confidence, create stability for employees while also strengthening client relations. 

Finding the Right Outsourced Paraplanning Partner

Parafinity specialises in paraplanning for firms across the financial planning spectrum, with a focus on accountancy and law firms. We have strong credentials in supporting firms introducing Centralised Investment Propositions (CIPs), Centralised Retirement Propositions (CRPs) and understand the full commercial model in depth. 

We create close working relationships, focus on building a partnership, and often seeing an expansion of our remit over time. While cost and expertise are essential to any business, trust can’t be bought but can be lost relatively quickly.

Making the Transition to Outsourced Paraplanning

Here at Parafinity, we fully understand the challenges of outsourcing, trusting third parties while being conscious that often “nobody can do it like you”. It is fair to say that delegation is an art as you are giving up a degree of control. On the flip side, paying the added expense of an in-house paraplanning that may not be fully utilised often doesn’t make commercial sense. You are spending time, money and focus on an area often off the beaten track, away from your expertise and primary business endeavours.

We see ourselves as virtual team members, someone you can turn to as and when required but who doesn’t take up a seat in your office. There are no additional expenses, no hidden extras and as a team, individually, we may take holidays and time away from the office, but cumulatively we are here 24/7. Trust is earned, not assumed, but our experience and expertise certainly go before us.

 
We’d love to speak to you if outsourced paraplanning is something you’re considering.