6 reasons every financial adviser should have an outsourced paraplanner partner

Reasons Outsourced Paraplanner

Have you been mulling over outsourcing to a paraplanner? Or have you never even thought about it?

In either case, it’s time to consider it more seriously. Because the right outsourced paraplanner can bring tangible benefits to your firm and operations.

Here are 6 reasons every financial planner should have an outsourced paraplanner to support their business—in full or in part.

1. Get Support During Advice Backlogs + Busy Business Seasons

Outsourced paraplanning is an ideal add-on when you’re in a busy business season and your administrative team or advisers are overloaded.

With contract paraplanners on hand to support you, you’ll avoid being left empty-handed before a critical client meeting because your team can’t complete the research and documentation needed on a tight timeline.

Ultimately, by getting to know and engaging a reliable outsourced paraplanning provider—even to supplement the skills of your in-house team—you’ll always have someone on hand to support your advisers during busy times.

Especially when you engage a larger paraplanning firm that offers on-demand, customisable services, you can scale your paraplanning up or down as needed—without hiring additional staff or overburdening your team.

2. Acts As A Gatekeeper For Compliance Requirements

With the direction of industry regulation, compliance is becoming all the more critical for financial services professionals to consider when creating SoAs. And when you’re not confident in your documentation? Audit time can feel like a gamble.

Perhaps your in-house team lacks the specialist knowledge needed to produce a compliance-heavy BID. Maybe they, or you, don’t have the time, nor the capacity, to conduct the in-depth research and modelling you require.

Whatever the reason you lack confidence in your documentation’s compliance, an outsourced paraplanner experienced in highly regulated fields can help you feel confident you’ve “got it right” when it comes time to audit.

3. Reduces Recruitment Costs

Many people use paraplanning as a stepping stone into financial planning, which can mean the role has a high staff turnover.

That’s a problem for adviser firms when, on average, in Australia, the effective cost to recruit and hire a new employee hovers around $23,000, according to the HR Industry Benchmark Survey 2021 Australia and New Zealand.

By outsourcing your paraplanning to a dedicated firm, you won’t waste your time and money recruiting, managing, and training paraplanners only to see them move on to become an adviser.

4. Reduces Long-Term Staffing Costs

The cost of building a team of in-house paraplanners extends beyond recruitment costs to include salary (the national average wage of a paraplanner in Australia is around $75,000 and $90,000)—as well as sick leave, holiday pay, Super contributions, training and development.

Client sales volume and corresponding paraplanning requirements also ebb and flow. So, fixed paraplanning overhead is a poor match; you will overpay during low-volume periods and run the risk of being left short-handed during high-volume periods.

When amortised across an entire year, the flexibility to only pay for paraplanning as and when you need it can lead to significant cost savings. Financial planners can optimise expenses without adding to their office numbers by seeking external paraplanning support.

And often, outsourcing your paraplanning to a specialist firm is more cost-effective than hiring someone with the same level of expertise.

5. Allows You To Focus On Clients + Business Generation

Why spend your time training and managing an in-house paraplanning team or spending hours on research for every SoA you create? An outsourced paraplanner could take all that “busy work” away from you.

Rather than managing your team or conducting extensive or complex research, you can focus on higher-ROI tasks such as business generation, adding value to your current clients and taking on clients you previously couldn’t due to bottlenecks or lack of time and resources.

This is particularly true when you work with a larger paraplanning firm with enough paraplanners on staff to support you as you grow; and one offering the option of an end-to-end service, from pre-SoA research to advice lodgement.

6. Provides Access To Specialised Expertise (e.g: Compliance)

By outsourcing paraplanning you tend to get access to a wealth of experience and specialist expertise.

We regularly have more advanced and in-depth strategy discussions with our advisers, answer specialised compliance questions, troubleshoot problems with advice documents—and actively help fast-track and elevate the advice generation process.

It would be difficult and costly for even a multi-adviser team to hire enough paraplanners with the right expertise—and then keep them on staff—to have the same level of compliance gatekeeping, quality assurance and paraplanning support in place that an outsourced paraplanning firm can provide.