All financial planners will be working with paraplanners at some point in their career – but what makes a great paraplanner and why do they do what they do?
Some people are paraplanners on their way to becoming financial planners, but others have chosen paraplanning as a satisfying career with no intention of becoming an adviser.
Melanie Drago, founder of Tanngo – an online platform to connect financial advisers with paraplanners, says of the paraplanners she surveys, only 20% have ambitions to become advisers.
She cites four main reasons for this – they don’t want the pressure of sales, they don’t want the risk of making mistakes, they prefer to be in the background, and they don’t enjoy the people aspect of planning. There’s also the high degree of flexibility to be found with paraplanning.
Melanie says that advisers know the questions to ask clients to get the right answers but paraplanners, in the main, prefer to get the information from advisers and work on the modelling and technical aspects of the advice.
“Paraplanners pride themselves on knowing the strategy and being deep in that. So, it’s a good relationship between an adviser and paraplanner,” Melanie said.
After 10 years working as a paraplanner, FAAA Member Sarah Schultz now sees how much advisers value paraplanners. “The perception has changed a lot. I know advisers value what I offer,” she said.
Flexibility in advice
Paraplanning is often more flexible as a career than financial advice – as people can typically work from home and choose the hours they work. This is one of the reasons why more than 74% of paraplanners are women.
Sarah, contract paraplanner and business owner of Busy Bee Paraplanning, started her own paraplanning consulting business when her husband was offered an overseas posting.
“We were in Malaysia for four years, and Saudi Arabia for a year and I wanted a career where I could have something of mine and I was not just becoming an expat. I wanted my own money and wanted to still use my knowledge of financial planning.”
Sarah was able to structure her work to overcome time zones and distance. Now back in Australia and based in Brisbane, there is still much to keep Sarah engaged in paraplanning.
Her journey in financial planning began when she was offered an admin job by a family friend, who was her parents’ adviser. She earned her Diploma of Financial Planning there, but the practice did a lot of double gearing and margin lending and then the GFC hit.
Sarah said it was then that she knew that she didn’t want to be an adviser with the responsibility of telling clients what to do with their money and having to deal with them if things went badly.
“I didn’t want to be the face of financial planning, but I did love the strategy and stories and what people want to achieve,” she said.
“Paraplanning gives me the opportunity to be involved in the world without being the face.”
Loneliness of contracting
Working on your own has its drawbacks. “I’ve been doing this for 10 years, working from home and not being part of the world. I realised I need connection, like being part of the FAAA,” Sarah said.
Melanie recognised that running a one-person business can be lonely and started a Facebook group, which now has around 2000 members – including Sarah.
“You can go and ask questions on strategy, or if you have a mind block, there’s always someone to jump in and help – it’s a community,” Sarah said.
Melanie’s own career in advice started in 1997, when she dropped out of university and started an admin job in a financial planning firm. She found it interesting and decided to undertake study to become a paraplanner. After working as a paraplanner she moved into designing advice templates and tools, which led to working at a big bank managing their advice solutions, working on digital advice for Industry Fund Services and finally setting up her own businesses – The Paraplanner Hub, Tanngo while still consulting to the profession through Tangelo Advice Consulting.
Building a paraplanning business
Anne-Marie Esler CFP® started her career as a learning and development manager at a large advice practice. This led to a role as a training manager at ASFA (Association of Super Funds of Australia) teaching trustees all about superannuation. After this she went to Centric Wealth as a technical manager. Although she had a good knowledge of super and how it worked, after she joined Centric Wealth, she found it was all very different on the financial planning side.
“We were doing everything for clients. It was very different from the platforms to the planning side,” she said.
From Centric, Anne-Marie joined her brother Matt – who was working with a managed discretionary account (MDA) product and helping interested advisers with the paperwork for SOAs and ROAs. They formed Padua Solutions. The business expanded into offering contributions and rollover paperwork for advisers and eventually moved to paraplanning. A tech component was added to the business’s offering and now the business has 30 people working there as paraplanners, with another 10-15 contracting as paraplanners.
“Some are looking to be financial advisers – and see this as a fantastic stepping stone and there’s a group who don’t want to be financial advisers. They prefer to be paraplanners, enjoying writing strategy.
“For some, they don’t want the pressure of sales, the pressure of finding clients and selling their value proposition.”
Padua, which has offices in Kiama and Sydney, hires a batch of interns every six months, many from Wollongong University. They typically start on the research team learning all the information about products and then move to the transitions team where they learn about fees and features and then into SOA documents, learning the basics of the SOA and how to put it together, Anne-Marie said.
Anne-Marie has a Bachelor of Economics, a Graduate Diploma in Applied Finance, a Graduate Diploma in Financial Planning, and is a CFP® professional. She said she knew she’d work in finance as she was always interested in money and finances and how the industry worked.
Running the business for over 11 years, Anne-Marie says she feels like everything she’s done has led her to where she is now. “I love running my own business, I love that I’m bringing people into the business and introducing them to financial services. It’s a good learning ground.”
A large proportion of Anne-Marie’s paraplanners are female. “It’s an excellent job for women; there are a lot of part-time people flexibly working. Some work only school hours; others work three or four days a week and some work a nine-day fortnight. And it’s really standard hours – not overtime outside office hours.”
