Welcome to the age of Paraplanning

by | Oct 14, 2015

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Peter Bradshaw

Since the introduction of the pension freedoms in April, the role of Paraplanners has dramatically changed and there is huge demand for their services, says Peter Bradshaw, National Accounts Director, Selectapension.

Advisers have seen a surge in demand from clients when reviewing their pension pots, as consumers take advantage of the new flexibilities on offer. According to the Association of Professional Financial Advisers (APFA), 87% of Advisers reported on average eight new enquiries since the pension freedoms were introduced. On top of this, the complexity of cases has also increased as Advisers now assess a wider range of retirement options for their clients, including transferring benefits from DB to DC schemes. All this has impacted the workloads of Advisers and, in turn, led to an increase in the number of Paraplanners as they address clients’ needs in the changing retirement landscape.

Paraplanners have been a vital part of the advice business but have played a much more significant role in the past year in supporting Advisers. As annuities are no longer the default option for clients, Paraplanners are crucial in conducting the more comprehensive research needed when analysing the best options available. Paraplanners have significantly increased in numbers over the past years. According to the Personal Finance Society (PFS), an estimated 3,000 of it’s  36,000 membership are Paraplanners. The role of a Paraplanner is continuing to grow and develop too, with many new business models supported by banks of Paraplanners producing the client reports.

As Paraplanners have grown in prominence so we are beginning to see more dedicated support and training become available. So the Government is starting to fund apprenticeships in paraplanning for the first time. The apprenticeships will help firms develop new and existing employees into fully trained Paraplanners adding to the support network of Advisers. They will be recognised by either the Chartered Insurance Institute or the Institute of Financial Planning as having achieved the certificate in paraplanning once qualified. PFS has recognised the distinct specialist role of paraplanning and recently hosted inaugural conferences exclusively for paraplanners, which I found very impressive.

Paraplanners have embraced technology at the forefront of this pension revolution, which can help give them the extra resources they need. In a post RDR world, with the spotlight on the cost of advice, it is now more important than ever to deliver an efficient service and enhanced technology can help ensure that costly time is not wasted. Planning and research tools where Paraplanners can compare new and existing investment products all in one place allows easier reviews and record keeping, allowing Advisers to maximise their time with clients.

Paraplanning used to be seen as a step towards becoming a financial adviser, but now increasingly it is becoming a profession in its own right.

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