Paraplanners are a sought after role and a critical aspect of Financial Services.
The practical nature of the role sees paraplanners aiding financial planners in research, administration and report writing. Their role is essential when it comes to gathering new information or projections based on a change in a client’s financial situation. But, with the developments of technology and automation, what does this mean for paraplanners and how are professionals reacting to the change?
While paraplanners are invaluable to a business thanks to their knowledge and expertise in financial and business management, several areas of the role involve repetitive, time-consuming tasks. This is where automation thrives.
An example of this can be found in compliance and regulatory support. Automation has streamlined compliance processes by optimising regulatory checks, highlighting potential violations and guaranteeing adherence to complex regulations. AI-powered tools can monitor changes in regulatory frameworks, ensuring paraplanners are kept up-to-date with frequently evolving compliance requirements, thereby drastically reducing the risk of compliance breaches.
What do the stats say?
Overall, paraplanners view AI and automation favourably, research by Research in Finance, a market research and data consultancy, state that 77% of paraplanners surveyed across the UK are already using a cashflow tool within their research and to inform clients(Research in Finance: Paraplanning in a pandemic report)and 75% of 312 paraplanners surveyed in a report by Embark Group, WealthTech company, believe technology helps deliver better advice to clients(Embark Group: 2022 Paraplanner survey report).
According to another report by Scottish Widows, “when paraplanners get their hands on AI tools they become significantly more positive on their value. An overwhelming 92% of paraplanners who have used AI tools believe they will be useful in the paraplanner role” (Scottish Widows: The technology-enabled paraplanner).
Our own research agrees. From a wider employability perspective, our 2023 Artificial Intelligence workplace trends report found that 70% of Financial Services employers believe the use of AI is beneficial and will lead to new employment opportunities.
Moreover, a staggering 99% of employees across professional services, surveyed in our AI report said the introduction of Artificial Intelligence has improved their job satisfaction.
Evidently, the threatening rhetoric so often regurgitated in sensationalist media, of AI decimating occupations is just that - rhetoric. So far, the research points in the opposite direction.
For paraplanners, automation has streamlined much of their role, but has yet to tread anywhere near the grounds of taking it over. Skilled paraplanners are essential to undertaking analysis and, as with all things, advancements in technology have allowed for better accuracy and improved efficiency. Alongside this, AI automates other aspects of a paraplanner’s role such as data gathering and report generation, freeing up precious time allowing paraplanners to focus on the more complex and strategic aspects of their role.
How will AI influence the skills involved in paraplanning?
A paraplanners role has traditionally been spent preparing and compiling documents such as Statements of Advice (SoAs) and Records of Advice (RoAs). The turnaround of this work, while absolutely essential, has historically taken weeks. Now, with automation embedded into the role, that same work can be completed in a much shorter timeframe. So what does this extra time mean for paraplanners?
There is more time to focus on training and skill development. We’re seeing professionals becoming ‘product specialists’ -concentrating on specific technical expertise, such as Venture Capital Trusts (VCTs) and Estate Planning. With such specialisms comes a rise in salary and an increase in confidence. According to research from Embark and Research in Finance, 35% of the 332 paraplanners surveyed, identified technology expertise as an area where they could add more value, and “only 15% fear the negative impact of tech threats like robo-advice and report automation” (Embark Group: 2022 Paraplanner survey report).
Technical analyst at First Wealth, Fazer Cronin notes: “[automation] will take a lot of the arduous jobs - say suitability writing - away from the paraplanner. The ability to really dive into a topic and understand client needs and objectives will become the key point of the role, and paraplanners will have to become a hybrid between the technology and the adviser.” This hybridisation will supercharge the role, driving the paraplanner profession into the market spotlight; ultimately ensuring it isn’t overlooked or treated as merely a stepping stone to becoming a Financial Advisor, but a fulfilling, evolving career path in itself.
As professionals are freed from the monotonous tasks of their preceding job descriptions, many will embrace the growth opportunities that are born from developing new skills and pathways. As a result, advancing technology and AI serve to improve employee retention, not endanger it; but as with any change, mindset must evolve to meet this new technological frontier.
Access our 2023 Workplace Trends report for free, to understand what benefits working with AI can create for your business and teams. Looking for support with finding a new role or need help with your talent strategy? Get in touch and a specialist consultant will be happy to help.
Sources:
Embark Group: 2022 Paraplanner survey report
Research in Finance: Paraplanning in a pandemic report
Scottish Widows: The technology-enabled paraplanner
