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The Rise of the Paraplanner


The UK advisory market is still in transition, and it’s well documented that the hangover from the Retail Distribution Review is still playing out. However, one aspect of RDR which is clear, is that to increase effectiveness, advisers need to spend more time with their clients and focus in on what they do best –  understanding their needs, identifying their true risk profile and lifestyle requirements. However, the whole research and report writing element of the adviser role takes up a huge amount of time, and often requires a very different skill set. This is where the job of the once lesser known Paraplanner has started to come into its own. Over the past few months, we have been investigating the emergence of this market, and how over the next few years they look set to grow into an even more credible influencer in the decision making process, between an adviser and their client.

Quote: “as a Paraplanner I usually get ignored until the adviser mentions to the providers that I'm the one choosing the providers & products”

With the rise of qualifications (by the IFP and CII) and a surge in outsourced paraplanning firms. The role of a “Paraplanner” now offers a whole new opportunity for individuals previously enjoying the data side of the advisory role, but not particularly relishing the client-facing element.

Quote: “I started as paraplanner although it was called an office manager …  In those days it was either a paraplanner moving up to become an adviser or an adviser heading down to retirement, now it is a career.”

In addition the “outsourced” segment of the market is expected to grow, in the near future, as more of the “in-house” variety gain an awareness of the positive opportunities experienced by being an outsourced paraplanner. However, it was clear this is a sector in demand as post RDR, on average, outsourced companies were working with more adviser firms than they deemed to be the most optimum number.

Also, it is interesting to note that the market is very technologically aware. A majority are using social media as a source of information and, in some instances, engaging in crowd sourcing to find solutions. In addition the industry is very vibrant, positive and has a genuine sense of community. Our view is that this is a market which is growing in importance, relevance and value, they are technologically aware, engaged and hungry to make the industry efficient and more professional.

Thoughts and views from our wealth manager study


If managers do not invest in their own funds, why the heck should I’

When actively considering a fund for a client portfolio or buy list, most of the criteria used by wealth managers to screen and evaluate products are hardly surprising.

Long-term sustainable performance is clearly vital – alongside other obvious areas such as strength of process and team, portfolio size and health of a parent company.

However, one characteristic often underestimated is the importance of fund managers who back their convictions and actively invest in the products they run.

Recent qualitative findings from Research in Finance has found fund manager investment in their own vehicles is a favourable requirement for a majority of large UK fund selectors.

“It is one of the first questions we ask a fund manager in our exploratory meetings. It shows that their interest are aligned with the investors of the fund,” an investment manager from one of the UK’s largest wealth management firms revealed.
Another fund selector added: “I am a big fan of fund managers putting their own money into their funds. If they don’t invest in their own funds, why the heck should I.”

In addition, fund selectors also have a particular interest in the personal investments of managers running two or more different strategies. “The really interesting question comes when a manager runs more than one fund. We asked someone the other day about which one of his funds was he investing in right now. That was an eye opener.”

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