The role of the paraplanner continues to evolve: here's what it means for you.
Over the past ten years, and with the rise of Independent Financial Advice within the market, paraplanners have played a crucial but often-overlooked role in helping people and businesses best manage their finances. However, this is set to change. With deal volumes in Financial technology growing at 74% every year since 2008, banks and Financial Services providers have started to make the most of the UK’s status as a financial hub and FinTech leader to update their business offering, giving their clients a service that is faster, cheaper and more efficient than any of their competitors’.
This shake-up includes paraplanning, as the past few months have proven. Recently, Mercer announced its plans to launch a DB transfer ‘robo-paraplanner’ to help it automate its processes, and streamline its services. Built by FinTech company Wealth Wizards (which is itself backed by LV=), the end product was the result of a year of testing, and has the potential to transform the role of the paraplanner as we know it.
What does this mean for the market?
It’s important to note that this development has been a long time in coming. Many Financial Services organisations have long been looking at how they can streamline processes when it comes to offering Independent Financial Advice to their customers: in today’s hyper-competitive market, speed is the name of the game, and shortening the time between a customer’s first and second meeting is vital in keeping their interest and offering them a high-quality service. This means that paraplanners need to do their work faster than ever before- which is where AI automation comes in.
These robo-paraplanners essentially act as an automated paraplanner, completing everyday routine tasks in a fraction of the time it normally takes a human to do, such as research and compiling reports for IFAs to take to their clients- before producing a recommendation that the paraplanner can then accept or edit as they see fit. These changes would then be fed back into the system’s network, effectively enabling the machine to ‘learn’ and create more accurate reports over time. As a result, the paraplanner has more time to concentrate on more complex work.
Companies are already reaping the benefits from this system: indeed, Peet Denny, Wealth Wizard’s Chief Technology Officer, says that companies who use it are experiencing a tenfold boost in productivity thanks to the AI learning systems.
A changing role
Naturally, this development has massive repercussions for paraplanners- but not in the way that many might think. There is currently a dearth of paraplanners in the market, with too few of them to fill every vacancy: as a result, it’s extremely likely that this development could go a long way to reducing the workload of paraplanners, letting them manage and take on more clients and thus reduce the talent shortage.
Indeed, its potential to benefit the sector is huge. Though many fear that the development of robo-paraplanners could spell the end of their career, this is untrue: though they can complete many of the tasks a paraplanner can, a robo-paraplanner lacks the human element and the in-depth knowledge of the market that makes a good paraplanner essential to a business. Rather, the role of the paraplanner will change as their time is freed up by this new technology.
For the paraplanner of the future, a new set of skills will become essential to thrive in their changing job. As the time required to do research and everyday tasks reduces, many paraplanners will likely take a much more customer-facing role, engaging more with Independent Financial Advisors, and with their clients; in the long run, it might even result in faster promotions.
Though paraplanners will still need to be organised and highly skilled, there will be a new emphasis on being able to communicate well- and on having the technical ability to manage and maintain these new robo-paraplanners as part of their job. Given, however, that 61% of paraplanners are already RDR compliant, it seems like this is merely the latest move in a trend towards a more digital way of doing business, and one that both new starters and established professionals would do well to heed.
Preparing for the future
With 9.4% of the UK’s GDP coming from its Financial Services sector, and 1.1 million employees working in finance, any change to this industry is going to have huge implications for the rest of the UK’s economy. On a smaller scale, though, it also has the potential to really benefit those who work in Independent Finance Advice, opening up new avenues of work and changing the role of the paraplanner as it’s adopted by more and more businesses.
For paraplanners, this could be the opportunity they’ve been waiting for. It’s time to prepare.
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