What is Paraplanning?
Paraplanning is a crucial aspect of financial planning that focuses on the administrative, back-office, and clerical duties that financial planners delegate to junior-level staff. This allows financial planners to concentrate on client-facing activities, high-level planning, and analysis. Paraplanners analyse clients’ needs and recommend suitable products aligned to those needs. They prepare plans and reports for financial planners and attend client meetings to take notes and follow up on administrative tasks.
The Role of Paraplanners
Paraplanners often have undergraduate degrees in accounting or finance and may get their credentials from FINRA as Registered Paraplanners. In Australia, the role of a paraplanner is highly valued, with an average annual salary of $46,582 as of March 2021. Paraplanners may be classified into two distinct groups: In-house and outsourced third-party paraplanners.
In-House vs. Outsourced Paraplanning: A Deeper Dive
When it comes to paraplanning, businesses have two main options: in-house or outsourced. Each has its own set of benefits and drawbacks, and the best choice depends on the specific needs and circumstances of your business.
In-House Paraplanning
In-house paraplanning involves hiring a dedicated paraplanner to work within your company. This option offers several advantages. For one, having an in-house paraplanner can reduce the risk of sensitive client information being leaked to competitors. This is because all work is done within the confines of your business, under your direct supervision and control.
However, in-house paraplanning can also present challenges. For instance, it could create internal hierarchy issues, especially in smaller firms. Additionally, the cost of hiring and maintaining an in-house paraplanner can be significant, including salary, benefits, and training expenses.
Outsourced Paraplanning
Outsourced paraplanning, on the other hand, involves contracting a third-party company or individual to handle your paraplanning needs. This option can be particularly beneficial for smaller firms with limited budgets that need additional assistance during busy periods.
One of the main advantages of outsourced paraplanning is cost-effectiveness. For example, Benfield Paraplanning Services, a 100% Australian owned and operated company, offers on-shore paraplanning services that can provide high-quality support without the overhead costs associated with hiring an in-house paraplanner.
Outsourced paraplanning also offers flexibility. You can scale up or down as needed, without the need to hire or lay off staff. This can be particularly beneficial during peak times or during periods of growth.
However, outsourcing also requires careful consideration regarding control and accountability. When you outsource, you’re entrusting a key part of your business to a third party. It’s crucial to choose a reputable provider and to establish clear communication and accountability mechanisms.
Making the Right Choice
In deciding between in-house and outsourced paraplanning, consider your business’s specific needs, resources, and goals. Both options have their place, and the best choice depends on your unique circumstances.
If you’re considering outsourced paraplanning, Benfield Paraplanning Services is a great place to start. They offer a range of services and have a reputation for quality and reliability.
The Benefits of Contract Paraplanning
Contract paraplanning provides flexibility and scalability as there are no ongoing contracts and staffing issues to deal with. It also offers an overflow service and temporary paraplanning solution while allowing for scalable workforce options.
For instance, consider the case of Tom, an adviser in Sydney who works with one other adviser and a full-time administration staff member. They are considering hiring a paraplanner or using outsourced paraplanning services. Hiring a paraplanner would cost $87,500 per annum (or $7,290 per month). Using an outsourced paraplanner would cost $57,024 per annum for four SoAs per week at a cost of $297 per SoA. This represents a potential cost saving of over 30% per annum.
Where to Find Paraplanners
If you’re looking for experienced paraplanners then Benfield Paraplanning Services are the go to option. They have a team of professional paraplanners who can provide the services you need.
Conclusion
Paraplanning is an essential part of financial planning that can help businesses save time and money. Whether you choose in-house or outsourced paraplanning, understanding the benefits and drawbacks of each can help you make the best decision for your business.
References;
- Investopedia: Paraplanning: What is is, Difference From Financial Planning
- Paraplanner: The Benefits of Contract Paraplanning Online
- Fresh Paraplanning: Outsourced Paraplanning Careers
- Aspie AA Group
- Benfield Paraplanning Services
These references provide additional information about paraplanning, outsourced paraplanning, and contract paraplanning. They also include resources for finding experienced paraplanners in Australia.
