What is a Paraplanner and what do they do?
Most of us are aware of the word “paralegal,” meaning someone trained to assist lawyers in their legal work. But the word “paraplanner” is a little less well known—and if you’re here, you’re probably wondering just what is a paraplanner, anyway?
The profession is a relatively new one, having originated within the last two decades—though paraplanners are in high demand today! Paraplanners support their teammates in the financial industry, but their roles in an office space aren’t always clearly defined.
We’ll give a broad overview of the background and responsibilities of the typical paraplanner, but keep in mind that every office is different—so you’ll want to carve out the position that works best for you!
What is a paraplanner?
A paraplanner is a person on a financial planning team who specializes in the more technical side of financial planning and analysis.
They perform research and administrative duties, allowing the lead financial planner of the business to focus on what they do best: working closely with clients, solidifying relationships, and really ensuring that clients are happy.
What does a paraplanner do?
Like we said above, the main responsibilities of a paraplanner are to support in the technical side of financial planning. In general, while the lead planners are responsible for all the qualitative information about the client (their long-term goals and lifestyle, for example), paraplanners are responsible for finding the quantitative information the client will need.
To do this, paraplanners comb through financial documents and software to find the solutions that best fit whatever goal the client is striving for. This might involve meetings with legal and tax advisers, or simply a deep dive into the client’s records.
Once this research is complete, the paraplanner offers well-analyzed recommendations based on their work. Paraplanners don’t give financial or investment advice directly to clients. However, they are heavily involved in the research and analysis that the clients (and their lead financial planners!) will need to make informed decisions.
Essentially, they’re creating the “big picture” recommendations, the models of different scenarios that allow everyone to see which path to take.
Once the client has made a decision, the paraplanners then implement the client’s wishes based on those recommendations discussed in meetings. In addition, paraplanners play a huge role in preparing annual reviews. When the time comes to look over a client’s financial planning products and strategies, the paraplanner is responsible for giving detailed updates and any further recommendations.
As stated above, it’s very important to note that the responsibilities of a paraplanner can look very different from business to business. After all, it really depends on your company’s needs and qualities. Here are a few reasons the role of a paraplanner might vary:
Your business services. If you’re a financial planning company, what you need from your paraplanner will look very different from the needs of a business dealing with investments or retirement.
The paraplanner’s experience. An entry-level paraplanner fresh out of college is likely to need a little time to learn the ropes.
While junior hires will more likely be doing basic, administration-heavy paraplanner tasks, a paraplanner with decades of experience should hit the ground running with analysis and research. (Don’t forget: the more comprehensive services your business offers, the more experienced your paraplanner should be.)
The size of your business.
If you’re a tiny company where every worker wears multiple hats, your paraplanner will need to be a jack-of-all-trades, dabbling in other administrative or marketing duties in addition to paraplanning, for example. On the other hand, larger companies can carve out a role specifically for paraplanning alone.
In-house or outsourced help.
Internal paraplanners have the opportunity to really dig in and get familiar with the inner workings of your business, which is extremely helpful in the long term. Otherwise, outsourced paraplanning is an option for smaller businesses with limited budgets.
What is the role of a paraplanner?
So where do paraplanners fit into your office scheme? Well, first off, it’s important to be aware that paraplanners aren’t completely “back office” staff as you might think. It’s true that they aren’t responsible for liaising with clients, but you’re definitely going to want to have them come out and shine every once in a while, particularly when they accompany your lead planner to client meetings as part of the support team.
This holds especially true whenever you’re involved in a detailed planning meeting: while your paraplanner won’t actually lead the meeting itself, they should play a crucial role in advising the client. The paraplanner will be responsible for answering detailed questions, managing the software and information, updating projections, and more.
After all, they’ll have been the ones preparing and constructing the plans as outlined by the lead planner, so they’ll be an excellent resource for everyone involved in the meeting.
Jen with paraplanner explains in detail the question we all have: What is a paraplanner?
What skills and qualifications do paraplanners need?
So, after all that, you’re wondering how to become a paraplanner.
There’s a lot that goes into this work, so a good paraplanner needs a pretty varied skillset. On top of impeccably honed soft skills (like attention to detail and accuracy, prioritization and multitasking, and strong interpersonal skills), they’ll need a few technical strengths as well.
Paraplanners should obviously have a keen understanding of the financial planning process, as well as good computer and IT skills.
Beyond that, they should be strong writers and communicators, as their recommendations will need to be articulate enough for clients to understand.
There are technically no set qualifications for becoming a paraplanner in the US, but a paraplanner should definitely have a deep understanding of the concepts and processes of financial planning. They should also be familiar with industry software. Many employers look for paraplanners with a bachelor’s degree and a CFP certification, including a special financial planning education program.
And with all this schooling—plus a few years of experience under the belt—a paraplanner career can be upgraded to a lead financial planner position in the future! Don’t forget, of course, that paraplanning very much requires ongoing, developing education. Paraplanners have to remain consistently up-to-date on everything to do with the financial industry, including tax and legislative changes.
If you’re considering making a career move, or simply looking for more information and support as you think about your options, join our Facebook Community! There, you’ll find like-minded individuals to help you along your journey. Hope to see you there!
Are you thinking of having a career as a paraplanner? Let us know… we would love to hear your thoughts in the comments.