As a self-employed financial adviser, you probably feel pulled in a number of different directions. But if you’re going to spend time in front of your clients and continue to win new business, you can’t do it all. With the role of the financial adviser moving from transactional to consultancy-based, it’s no wonder that there’s been a rise in demand for paraplanners in recent years. The role of the paraplanner is essential to financial advisers, and since the Retail Distribution Review, paraplanning is now a career in its own right. Advisers today rely on paraplanners to assist them with everything from research to financial plans and report writing, freeing up the adviser’s time to focus on client retention and new client acquisition. But when it comes to paraplanning, what’s the best option – in-house or outsourced paraplanning?
Outsourcing versus in-house
It can be tempting to outsource your paraplanning. There are, of course, a number of benefits to outsourced paraplanning, such as saving time and minimising costs, not to mention one of the most popular reasons that people outsource their paraplanning: flexibility. When you outsource, you only pay for what you need, when you need it, as opposed to the constant cost of employing a paraplanner.
Outsourced paraplanners also benefit from the wealth of experience that comes hand in hand with working with a variety of clients for a range of different firms, meaning they will be able to bring specialist knowledge to the table. However, despite all this, 88% of advisers don’t outsource their paraplanning and less than 1% would consider doing so in the future. But why?
The problem with outsourcing
For many advisers, there are some concerns surrounding outsourced paraplanning. For starters, you won’t have the same relationship you would with an in-house paraplanner – and it can be difficult to trust your life’s work with someone you don’t really know. There can also sometimes be complicated legal and contractual issues surrounding sharing and protecting customer data. And additionally, by outsourcing your paraplanning, you are technically relying on a third party to produce your work – so if your paraplanner falls behind they are much harder to manage than an in-house employee, resulting in a lack of control.
The benefits of in-house
But instead of looking at the negatives of outsourced paraplanning, perhaps it’s better to look at the positives of hiring an in-house paraplanner. The benefits of employing a paraplanner speak for themselves: for instance, there’s reduced risk, increased communication and stronger relationships. An in-house paraplanner can take total ownership of the advice process, taking care of research and analysis, as well as liaising with providers, sitting in on clients meetings, cash flow modelling, liaising with trustees and solicitors, tax planning with accountants and formulating advice. They also provide a sounding board for the team to bounce ideas off and can provide support to clients when the adviser isn’t available.
From the client’s perspective, whilst the technical ability to write a good report is important, that’s not why people choose their adviser. Financial advice is all about relationships. Clients want to be completely understood and feel that their advisers provide bespoke advice that can help them reach their goals. Such a holistic approach to advice requires a team effort – and the paraplanner is an essential part of this team. In-house paraplanners can attend meetings and build relationships with both the client and the adviser, ensuring the adviser can offer exceptional advice and provide a personal touch. By immersing the paraplanners in the advice process, you can ensure they truly understand the client, adding real value to the advice process rather than just generating a report. Finally, from a compliance perspective, in-house paraplanners can also monitor everything that is said and done.
The Foster Denovo paraplanning service
At Foster Denovo, you can have the best of both worlds. Because you can choose the level of paraplanning support you need, you’ll enjoy all the benefits of outsourced paraplanning whilst working with a dedicated, in-house team. This means you can benefit from the expert knowledge of Foster Denovo’s entire team of paraplanners, and because of Foster Denovo’s company culture, you will still have strong relationships with each individual team member.
The benefits
Foster Denovo’s centralised paraplanning team is there to assist you in conducting research and writing suitability reports, as well as helping with technical consultation, in-depth analysis and strategy reports. They can also help with front-line compliance thanks to a robust file and regular consultation on any risks you might need to consider. You’ll also have access to:
- suitability report templates;
- a ‘common pitfalls’ document to reduce the number of easily made mistakes;
- checklists to help improve suitability reports;
- a straightforward assessing suitability form to understand clients’ attitude to risk, ability to understand advice and capacity for loss;
- evidencing research checklist; and
- pre-approval checklist.
If you need more support, Foster Denovo’s Private Client Services is a central support service, whereby a team of Client Experience Executives will take care of the administration and servicing of clients, allowing Partners to spend more time with their clients. You can choose the level of support you need, including services such as:
- client administration and research;
- report writing and servicing;
- preparation of documents for client meetings, including pre-filled applications and forms;
- management of cases to paraplanning, liaising with providers to obtain policy and research information;
- annual review preparation including cash flow forecasting and a professional client valuation pack;
- an efficient and personalised process offering a dedicated point of contact for Partners; and
- regular communication to the client and Partner, providing updates on their cases.
Foster Denovo’s Head of Partnership Support, Neil Wortham, also works with Foster Denovo Partners to provide a help desk service where they can discuss potential cases. Working on the principle that ‘two heads are better than one’, Neil challenges Partners to help them explore advice opportunities and pre-empt any compliance procedures that need to be followed.
About Foster Denovo
Foster Denovo is a multi-award-winning firm which partners with self-employed financial advisers to deliver top quality advice to clients across the country. With over 80 Partners and 200 employees, they’re small enough to be flexible yet big enough to make a real impact on the industry. At Foster Denovo, you will be surrounded by a strong team of knowledgeable people who can help you, whilst their unique training and mentorship programme, ‘Quantum Leap’, also offers support and guidance to all their Partners to ensure they can get to where they want to be.
In addition to the Quantum Leap programme, Foster Denovo also runs a number of other training programmes for Partners, as well as ongoing mentoring and support from Equity Partners. Partnering with a reliable advisory company also has the benefit of taking away all the extra work involved in financial advice. Because they can take care of all the behind-the-scenes stuff such as compliance and IT, it means you can focus solely on your clients and getting out there and building relationships.
Want to find out more?
Contact Recruit UK today to find out more about the opportunities we are currently working on with Foster Denovo.
