What Is Paraplanning?

Paraplanning refers to the administrative and clerical duties of a financial planner delegate💦d to and carried out by junior members of a financial planning🅺 group.

Similar in scope to a paralegal at a law firm, the function of a paraplanner was created to allow financial planners to focus on working closely with clients and identifying their 澳洲幸运5官方开奖结果体彩网:investment needs. Paraplanning includes analyzing clients’ needs and rꩲesearching and recommending suitable products alig🅘ned to those needs.

Understanding Paraplanning

Paraplanning staff, also called paraplanners, do most of the 澳洲幸运5官方开奖结果体彩网:grunt work such as preparing plans and reports for financial planners. Larger firms have developed💜 new department꧋s for these roles within their organizations. But the cost of hiring paraplanners is high and, as a result, paraplanners may be unavailable to some smaller companies.

Paraplanners typically have minimal client interaction. Instead, they prepare and construct plans outlined by the financial planner. 澳洲幸运5官方开奖结果体彩网:Financial plans are regularly updated as a client’s situation changes, so they help gather new information and provide financial planners with updated projections. Paraplanners may also attend client meetings to take notes and follow up on administrative tasks, such as obtaining 澳洲幸运5官方开奖结果体彩网:bank statements and identity documents. Other duties inc🎀lude managing the firm’s financial p🍷lanning software and billing clients.

The role of the paraplanner is not synonymous with a secretary or an administrative assistant. It was developed to allow financial planners more time to devote to their clients. By doing so, it gives the paraplanner other duties that don’t require face-to-face time with inves♛tors.

Many paraplanners stay in the role for the long haul and might, after accumulating years of experience, take on the additional responsibility of training new entrants into the field. They may also specialize in a specific area such as 澳洲幸运5官方开奖结果体彩网:estate planning or 澳洲幸运5官方开奖结果体彩网:venture capital. Others may use the role as a steppingstone to advance in the financial industry and may go on to become financia🍃l advisors or planners themselves.

Paraplanning vs. Financial Planning

Paraplanning is functionally different from financial planning. Th🃏e main difference between the two involves how directly they interact with clients.

While paraplanners do not have contact with clients, financial planners do. They guide and advise people about their investment goals, plans, and strategജies. Financial planners also have more advanced credentials, education, and qualifications than most paraplanners have.

Paraplanning Qualifications

Paraplanners are expected to have a bachelor’s degree in 澳洲幸运5官方开奖结果体彩网:accounting or finance. Many college graduates work as paraplanners to gai💯n entry into the financial planning industry. As paraplanners, they gain significant work experience and skills,꧟ network with other financial planning professionals, and work toward becoming financial planners.

The College for Financial Planning offers the Financial Paraplanner Qualified Professional (FPQP) designation. To receive this, applicants must complete a 10-module course and take a final closed-book exam. To increase their prospects of employment, paraplanners can become 澳洲幸运5官方开奖结果体彩网:cert♑ified public accountants (CPAs).

Types of Paraplanners

Paraplanners may be clas🅘sified into twoꦜ distinct groups: in-house and outsourced third-party paraplanners. Here is a quick look at each of these:

In-House Paraplanning

Internal paraplanning allows financial advisors to become familiar with the specialized skills 🌄of their staff. For inst♎ance, if a paraplanner known for their skills in reading bank statements is needed, the financial planner immediately knows who to use.

Hiring internal paraplanners also reduces the risk of sensitive client information being leaked to competitors. One downside of hiring in-house paraplanners is ꦛthat they could put themselves above other staff and the firm to receive a promotion to a more senior role.

Outsourced Paraplanning

Financial planning firms may decide to 澳洲幸运5官方开奖结果体彩网:outsource paraplanning to companies or 澳洲幸运5官方开奖结果体彩网:independent contractors who provide these services upon request. Outsourcing may be beneficial to smaller firms with limited budgets that need additional assista🔯nce during busy periods. It may also benefit firms that intend to grow their business.

Financial planning firms that choose to outsource need to consider that control may be compromised as they delegate work to external contractors. For example, a financial planner may not be aware of a contractor’s other work commitments, which could make it difficult to meet tight deadlines. Setting meas⛄urable work targets ensures that contractors are accountable.