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In a world where change is needed for growth and success, paraplanners have become a valuable resource for the financial planning profession. Paraplanners have worked behind the scenes for the past 20 years in both large and small firms1. Paraplanners have played the backstage role – this unrecognized talent has been hidden and unknown by many, until recently.
I had never heard of the term paraplanner until four years ago. John Robinson, the founder and principal of our firm, suggested I look into becoming a paraplanner. I was gaining an interest in comprehensive financial planning and wanted to leave the portfolio management and product sales roles.
During my research, I found there were misconceptions around the duties and qualifications of a paraplanner since it’s not a clearly defined role. Paraplanning services entail more than administrative, clerical, and data-gathering tasks2. It’s a varied role and has advanced and evolved into a career in itself. About two years ago, I obtained the FPQP® designation as a Financial Paraplanner Qualified Professional and have now enrolled in the CFP program.
A paraplanner needs a basket of invaluable traits including interpersonal, educational, financial, and technical skills to enhance a financial advisor’s practice. Over the past two years, increased demand for paraplanners came with the onset of the 2020 COVID pandemic and the transition to remote or virtual work3.
Outsourcing the paraplanner function is the new trend. Small, fee-only and comprehensive financial planning RIA firms can optimize expenses without expanding their office by seeking resources from outside who specialize in paraplanning. There are no expenses such as payroll taxes, health and medical benefits and ongoing wages. Issuing a 1099 tax form is not needed because the paraplanner is a separate business that allows the RIA firm to pay by check, card, or PayPal.
