I have great respect for outsourced paraplanners and the hard work and entrepreneurial spirit required to set up a business.

    I’ve even wondered at times if it might be something I should do, until the thought of having multiple paymasters to please instead of one deterred me!

    When it comes to the issue of in-house paraplanning versus outsourced, I think we should consider this from the point of view of clients, the adviser firm and the paraplanner themselves.

    While report writing is a key element of the paraplanning role, I believe only the smallest minority of clients love a good report.

    I doubt that many clients, if asked, would say they have chosen the services of their adviser because their reports are the best.

    What clients love are having people who understand them, who offer a good solution, help them prioritise and find a way forward. This requires a team approach, with the paraplanner often instrumental in identifying and communicating the solution.

    In my view, the in-house paraplanner can contribute in a more meaningful way to the client relationship, through attendance at meetings, via live cashflow modelling or simply because they can build a 3D client picture through telephone contact or conversation with the adviser.

    A team-based approach

    At Cornerstone Asset Management, we restructured our service model from a pool of support staff to a team-based approach earlier this year.

    Each team contains a couple of advisers, a paraplanner and an administrator. They all appreciate the enhanced working experience and smoother client journey working in this way brings.  

    One of our advisers and partners, Alan Reid, describes it like this:

    “Having an in-house paraplanner means they can build a full picture of the client situation through discussion or by attending the client meeting. This allows them to get to know the client and their desired outcomes and really add value to the advice piece, rather than just writing a report at arm’s length.

    “The paraplanner is immersed in the advice process and feels part of the larger team, rather than just a cog in the wheel.

    “Our experience is that as a direct result, our paraplanners seek to gain more knowledge about subject matters where they may be lacking in knowledge. In turn confidence grows, which leads directly to self-development, and ultimately, better client outcomes.”

    Having been a paraplanner for a number of firms, I don’t think there are many providers or platforms I haven’t used at some point.

    However, I would say that expert knowledge of the products relevant to your firm’s client bank is more important than knowing something about all products and providers. 

    Our in-house paraplanners know the products we use inside out and have key relationships with the providers. This improves quality of service and makes life easier for everyone - client, adviser and paraplanner alike.

    Admittedly, an outsourced paraplanner may be able to call on something they have learned while working on a report for one company and apply that knowledge to help another firm. This could be useful for the smaller company with limited resources.

    However, in-house paraplanners will generally have access to enough support from technical services and compliance providers to help with any knowledge or skills gaps. 

    They will be more likely to retain and fine-tune the knowledge needed for the type of clients their firm looks after, whether that be expertise about defined benefit transfers, employee benefits or sophisticated tax planning. 

    I wholeheartedly agree that paraplanners should be prepared and able to offer an alternative to what the adviser has proposed.

    Yet it's also true that advisers are busy people, under pressure to meet client demands and generate business income. This can sometimes mean they are resistant to, or perhaps frustrated by, challenge. 

    Having worked for firms that have sometimes used outsourced paraplanners, advisers can be more willing to accept 'pushback' from someone they have a day-to-day working relationship with, and who is at the heart of their business.

    Difficult conversations are best had face-to-face rather than by email.

    With my compliance hat on, if 'pushback' is required to safeguard the client’s best interests, then the in-house paraplanner is much better placed to monitor everything that has been said, saved and issued at all stages of the client journey.

    The paraplanner perspective

    I see many benefits of outsourced paraplanning for firms who lack the resource to employ an in-house paraplanner. Equally, there may be firms who are unable to recruit a suitable candidate, or need cover for holidays and busy periods. 

    Similarly, I can see why the paraplanner themselves may opt for outsourced working. Flexible hours, working from home, being your own boss and enjoying the number one item on my bucket list - dog ownership!

    All of these have huge appeal. But when I look back over my 20 years in paraplanning, the best bits would not have been possible if I wasn’t in-house.

    These include the moment I saw a couple weeping with joy when the cashflow model said yes, to more recently having a key role in developing new client solutions and seeing the benefits in practice, all the way from initial enquiry to annual review.

    Outsourced paraplanners provide a cost-effective source of high-quality research and report writing but, in my experience, 20 years is too long just to write great reports.  

    In the right place, the in-house paraplanner will gain the opportunity and ability to contribute so much more to the business and to the client experience than this.


    For the other side of the debate, read 'The paraplanning debate: The case for outsourcing'

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