Over the past 6 months, many paraplanners have expressed their concerns about the changes in the industry and their place in it post QAR implementation. Coming from a decade long paraplanning background, I couldn’t be more excited for where the industry is headed. Many thought leaders and industry experts express the same optimistic view of the paraplanning profession, given we can see the opportunities it will provide.
With the recommendation to replace “Statements of Advice” for “Fit for Purpose” documents, we not only see the outcome of lowering the regulatory burden on financial planners, but will also reduce the burden for paraplanners and streamline their workflow. I know my favourite part of constructing advice over the last 10 years was not ensuring that every disclosure, table and compliance item was checked off. It was the modelling, the product comparisons and strategy development, understanding how strategies work and how they impact the clients position for the better, that really filled my bucket.
With these changes, I believe paraplanners will be relied upon more to do these valuable parts of the advice process, rather than simply editing word documents. This presents the opportunity for paraplanners to become experts in advice formulation, allowing advisers to spend more time with clients and ultimately increase their client count.
As advice professionals we also need to consider the preferences of our clients. Michelle Levy’s research found that over 50% of clients either somewhat read, skimmed through or signed without reading the document at all. However, we know that there will still be clients who will want to receive something material and advisers who want to provide something to demonstrate value for money. Again, this is where paraplanners will continue to provide this value, by providing documentation that is more concise in format, that’s appealing for clients, but also engaging for paraplanners to be able to produce. There’ll be more focus on interesting elements such as flow charts, modelling and interactive documentation that serve the client better rather than just ticking a compliance box.
Additionally, I foresee a need for licensee’s to still require these documents on file, regardless of what the client requests. Licensees tend to take a conservative approach to advice, ensuring that they can meet any professional indemnity requirements and for their own piece of mind. My conversations with our clients and other planners across the country tend to express the same or similar views, as they don’t expect a significant change in what they are already doing. The majority of planners have expressed “The change may see a simplification of the documents provided, but not a full scale removal and research will still need to be completed, documented and filed; the client will still want to walk out of my office with and to be honest, I want to provide something for them. Removing this document won’t remove the need for these pieces of work to be done, it will just be streamlined” and I couldn’t agree more.
Whilst the removal of the SOA requirement may change the daily responsibilities of paraplanners, they shouldn’t fear these changes but rather embrace them. They will still continue to be relied upon for research and strategy formulation, which will allow them to hone these all important skills, as well as learn new and exciting ways to simplify, and make concise documentation for clients to review.
