The modern IFA business can ensure it has good quality paraplanners by outsourcing the work to specialist firms, writes Martin Vaughan of Paragon Paraplanning.
As the role of the paraplanner becomes more understood, and as IFA businesses develop, one of the challenges facing the modern IFA business is to ensure they are profitable while at the same time remain professional and produce high quality work. An integral part of this high quality work will be the production of reports for clients. In many practices this type of work will be the domain of the paraplanner (though this is not all they will do) and clearly the more complicated and comprehensive the report the more qualified and experienced the paraplanner required to complete it. This can cause concern for IFAs because it is not always economically viable to employ a paraplanner of this standard full-time.
A solution that more and more IFAs are opting to do is to outsource some or all of their paraplanning requirements. This is where the report writing function, and indeed some of the other paraplanning functions, may be outsourced to a company that specialises in this type of work. Outsourced paraplanning is not new; Richard Allum set up the first outsourced paraplanning company in the UK, Adviser Assist, in 2002. Paraplanning Direct has been providing paraplanning services for a number of years and so has Hately Services. More recent entrants to the market have been Perceptive Paraplanning, Outsourced Paraplanning and Absolute Paraplanning. Indeed, there are a number of other companies that also provide outsourced paraplanning services and a directory of outsourced paraplanners will soon be available on www.theparaplanner.com.
Some benefits of outsourcing are:
The ability to spend more time with your clients knowing that your reports are being written for you. Knowing that your reports will be to a very high standard. Knowing that you will receive your reports to a deadline. All of the above are vitally important when considering the TCF requirements. There are also further benefits of outsourcing: The ability to pay for what you need. One of the benefits of outsourcing is that you can use the paraplanner as much or as little as required. The ability to discuss a client case with an experienced and knowledgeable individual. Having one or more highly experienced people to discuss ideas and to help create a strategy for a client is a major benefit for a small business.
Things to consider when outsourcing:
How are you going to pay for the work? Is this going to be on an hourly basis or on a case-by-case basis? How much work are you going to give the outsourced company? Some companies require a retainer; others just work on an ad hoc basis. What type of work are you going to outsource? This is important because you need to ensure that the outsourced company is able to deal with the work given to them. If it is highly complex and technical requiring a high degree of technical ability then you will need to make sure that the people doing the work have the appropriate skills. If you are a financial planner and you wish to outsource some of your report writing you would need to ensure that the outsourced company understands the difference between a full financial plan and a suitability report. Better still, check whether they are CFP qualified. Do not underestimate the length of time it takes to write a comprehensive report.
Martin Vaughan CFP is a director of theparaplanner.com and Paragon Paraplanning.