Understanding the new world of financial planning

13th March 2019

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PA Adviser

The financial services profession needs to find the single thing that could tackle – or even eliminate – some of the global game-changing challenges it faces.

Our understanding and depth of engagement with the new world of financial planning can help us do this – and firms may find the answer already exists within their own business.

But, what is this new world?

Think about your typical client’s journey and the key stages you go through as a team. You will recognise that, in one way or another, most of these stages rely on you as the financial planner.

This dependency has come about because of a lack of good support. Do you have the right people in your team so you can effectively delegate and/or let go of some of the less critical stages of the process?

Perhaps in the past you could just about pull this off. But now, with new clients, the increase in administrative demands and the greater intimacy your clients require, it is simply too much.

What the new world looks like

We have to change the way we work. First of all, the sale becomes the job of the business. Selling is not a dirty word. The business needs a marketing plan that promotes the brand of the business, not just the brand of the individual financial planner.

Building and nurturing relationships becomes the job of the whole team, whether that means face-to-face, by email or telephone. At the very least, each team member should have a profile on the business website.

I believe the role of the financial planner, when carried out in isolation, will become an unregulated/unauthorised role. It does not need high technical abilities or qualifications.

Life seems to be getting busier by the day, meaning your clients need much more than just money; they need mentoring, support and guidance without prejudice.

The task of moving the pieces around the chessboard of the client’s life takes a different kind of thinking from that of a financial life coach or a financial planner. This approach is more logistical and factual.

This role has traditionally required the skills of only a financial adviser but I believe this is where the shift will happen.

Compliance has increased, and the need for knowledge about a broader range of products and solutions is rising. Regulators require you to do more checks and provide more illustrations, comparisons and reports.

You are under more pressure to demonstrate the technical thinking behind the recommendations and advice you are offering.

The role of the paraplanner

This is where I believe the paraplanner comes in. This is the new role that can be your superpower. It is the paraplanner that will come up with the solutions you need to satisfy all the objectives, dreams and aspirations of your clients.

Paraplanners know everything about every product provider, solution and strategy. They are geniuses in their area and they love processes. They are very happy to work from the office, but do not, under any circumstances, expect them to sell. Any hint that this is on the cards and they will leave before you have time to blink.

Their skills are specific, and in some countries they may even be regulated and authorised to give advice and provide recommendations directly. Paraplanners may in time replace the role of the financial adviser, clearing a path for financial planners to concentrate on helping their clients.

Now I bet you can recognise people within your professional circles who fit this profile. In fact, you probably know financial advisers and maybe even financial planners who fit the bill, too.

The role of the administrator

Administrators generally have a high level of organisational skill, some basic technical knowledge and are reasonably IT literate. These are your client services assistants and your business administrators. They love paperwork, organising filing systems and typing letters. They are driven to complete every task they start.

These are the people who do all the background work and get stuff done. They have a general understanding of products and providers but it is general and relatively low level. These people are good all-rounders who can turn a hand to most things, and your business would be lost without them.

These are not your paraplanners. For many of you, most of your current team members – excluding financial planners and advisers – would fall into this category.

A new way of working

Think about this new way of working as a business relay race where one person/role starts the job and then hands over to the next. It is this collaborative approach to the delivery of financial planning and advice services that will make the difference.

A hand-picked, highly skilled team working together by design to deliver positive outcomes is what is going to transform financial services. So many of your current team are in limbo. If you don’t believe me, ask them to describe their role.

For decades, financial planners and advisers have been justifiably celebrated. The relationships you have built with your clients are remarkable but, while we have been telling the world how great you are, we have also been suggesting that anyone who isn’t a financial planner or adviser isn’t worthy.

Hence, administration is still considered as a second-class role and is totally misunderstood. If you are an administrator and you don’t want to be a financial planner or adviser, what does the future hold for you?

For the moment, there are no other roles or opportunities on offer. This is a tragedy, which, considering the global changes upon us, will only compound this problem if we don’t embrace the new role of paraplanner and the opportunities it uncovers.

My dream is to build a global marketplace of paraplanners, all certified to a new international standard and all working to a consistent role profile at the same level of professional excellence.

They would support financial planners and financial advisers across the world, enabling them to do the job that they came into this profession to do, and that is to change the lives of their clients.

Without a high level of support for, and clarity about, the roles within your team, this is merely a pipe dream. As much as you want it, you won’t get it by simply hiring more of the same type of people doing the same tasks.

Without the right team, a business will never achieve its true potential on its own. It is time for the change to happen.

Roles and responsibilities in the new world

The financial planning and advice process has evolved over time, as have the key roles involved in service delivery.

Historically, in the UK, the financial adviser was responsible for all stages in the financial planning and advice process.

Over the years a more collaborative approach to service delivery has developed, as outlined below in the column headed ‘Responsibility in the new world’.

Technical knowledge alone is no longer enough if an individual is to meet and/or exceed the needs of the new world of financial planning.

This new approach creates the perfect opportunity to highlight the available and corresponding standards and certification schemes, both at a national and international level.

Stage	Responsibility in the past	Responsibility in the new world	Standards and certification schemes
Sale	Financial adviser	Organisation	BS 8577 – framework for the provision of financial advice and planning services
Relationship	Financial adviser	Team	BS 8453 – compliance framework for regulated financial services firms
Coaching	N/A	Financial life coach	International Financial Life Coach**
Strategy	N/A	Financial planner*	ISO 22222 personal financial planning – requirements for financial planners
Tactical	Financial adviser	Financial adviser/ paraplanner*	Advanced Certified International Professional Paraplanner
Technical	Financial adviser	Paraplanner	Certified International Professional Paraplanner
Administrator	Financial adviser	Technical assistant	Trainee International Professional Paraplanner
Ongoing Relationship	Financial adviser	Team	International Financial Services Administrator