Collaboration for Centralised Research: How Financial Planners and Paraplanners can work together effectively.

By Nathan Fryer

Whilst there are many similarities between a Paraplanner and a Financial Planner, there are also several differences.

Financial Planners are typically quite outgoing people’s people whereas Paraplanners are generally a bit more introverted and analytical.

This makes for the perfect combination, as the Financial Planner can be the face of the business whereas a Paraplanner is quite happy to be in the background helping to create the magic; that is financial planning.

Paraplanners, being analytical, like to question everything; identifying the WHY is key, especially when you start to think about consumer duty.

So, whilst Financial Planners will know in their own minds what they are recommending and why, they typically don’t enjoy putting it down on the file.

This is where having a Paraplanner can be of benefit, but this needs to be a real collaboration between Paraplanner and Financial Planner for it to work. Paraplanners typically don’t like to be told to write up what is being said, and Paraplanners want to know why.

Part of consumer duty is to create a conduit for challenge, and who better than your Paraplanner. Invite them to challenge your thinking and the status quo; they will love it.

We all know that feeling like part of a business rather than a number goes a long way to maintain motivation and devotion, so why not embrace your Paraplanner’s desire to question everything you do, document it and challenge you.

When it comes to centralised research, what I am thinking about here is platform due diligence, PROD and your centralised investment proposition – have you got a process that challenges your thinking on things like:

  • Why do we use that platform?
  • Why do we use passive investments?
  • What makes you consider a Personal Pension contract rather than a platform?

If your answer to some of these is “because we do”, that is not enough. I have seen the comments saying that the majority of financial planning firms are doing most of what is needed for consumer duty, but if you were open to challenge, could that lead to better client outcomes? I believe so.

When was the last time you revisited your thought process on what you do and how? Does the analysis still hold true? Has a new product or investment come to market that may offer a better solution?

We only have to think about the recent increase in annuity rates and how that may have changed thinking about potentially recommending an annuity.

Financial Planners will find out that annuities rates have increased through various media outlets, but how often do you review them and what is the trigger for you to review your retirement proposition? Or is this simply based upon the client’s attitude to investment risk?

I have made some fairly sweeping statements in this article, which I know will not ring true with all, but hopefully I have identified with some and made you think about how you might better open your business up to challenge in the interests of serving your clients even better than you are already.

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