Advisers should not be 'snotty' towards less qualified paraplanners

Damian Davies, whose firm outsources paraplanning services to financial advisers, says there is space in the industry for a variety of different paraplanners to exist side by side.

This includes qualified experts as well as those who are less experienced and can simply ‘churn through work’.

Speaking to FT Adviser, Davies said: “The role of a paraplanner varies depending on the company they work in. On one extreme you have a paraplanner who is a hardcore technician. The adviser relies on them as a critical friend and they are the go-to for knowledge. 

“On the other extreme, you’ll also have someone who does a bit of admin and is moving into a paraplanner role. They don’t have a lot of experience but they are getting some papers under their belt but they are there to churn through work.

"In my view, and it’s a little controversial because some people are snotty about what a paraplanner should be, but both of those are paraplanners. I think they are both equality valid and it's down to the firm which type of paraplanner they have.

“There is a polarised view that a paraplanner should be qualified, should be this, should be that. And that’s cool, that's awesome -  if that suits that business.”

Being a paraplanner doesn’t mean you want to progress to be an adviser because they are different jobs

His own view on the topic has changed drastically from 20 years ago when he set up his business and only hired paraplanners with chartered status.

But over the years, he has taken on a relaxed approach and recently employed two graduates with little experience.

He said: “Our business has gone through an evolution. When we started, I would only bring in people who were chartered as paraplanners, because it made sense and that was the way our business was at the time.

"Now we have both. We have chartered financial paraplanners, who are a critical friend to our advisers. But we also just bought on two graduates with financial services degrees. They are green, they have never worked and are kids essentially, and both of those roles fit what our clients want.”

Not all paraplanners will be advisers

He is also keen to challenge the industry’s expectations that all paraplanners want to eventually become advisers. 

He said “Paraplanning can be a really good stepping stone to learn the basics. If you want to be an adviser then I would always say be a paraplanner first but it doesn't have to work that way. It is not that paraplanning is a less interesting job.

"Being a paraplanner doesn’t mean you want to progress to be an adviser because they are different jobs. It is not a lesser job.”

This is not the only way his business had been radical in its approach to work. Davies has always offered his staff remote working long before it became popular after Covid. 

 He said: “I started the business 20-years ago because I had a young daughter and I was commuting a couple of hours everyday and I thought that was nuts.

"That is why I did it, but others have different motivations for remote working. For example, for travel, looking after pets and animals or even elderly relatives.”

Interestingly, he has also noticed that more advisers are opting for outsourced paraplanning services.

This popularity has meant he has grown his business from a one-man-band to now hiring 40 people within two decades.

He argues that this is because there are multiple benefits to outsourcing, which includes it being the more cost-effective option.

He also says outsourcing allows advisers to benefit from best practice.

Davies said: “A lot of people come to us because we touch a lot of firms and can see what everyone else is doing. One of our most commonly asked questions is ‘how is everyone dealing with that’. 

“An employed paraplanner will have a deeper but more narrow knowledge base of how their firm works. Whereas we have a shallower but wider knowledge base of all of the platforms and all of the different back office systems.”

Aamina Zafar is a freelance financial journalist