You’re probably familiar with the benefits of receiving expert financial advice if you’ve ever received it. Financial planning isn’t just for the well off, but it’s an essential service that will help anyone who wants to maximise their income and wealth. The proper guidance and help can transform people’s lives. Financial planning is a great career choice if you are looking for something to help people while also providing security and compensation.
There are two major roles in this industry that you can choose from – financial planning and paraplanning. There wasn’t much difference between them a few years back. Paraplanning was often a step in the right direction for financial planners. The two roles are now becoming more distinct with industry regulation and professionalisation. For new entrants, this means an important decision to make. It is crucial to clearly understand the differences between paraplanning and financial planning, as well as the pathways to each.
Paraplanning vs financial planning
Financial planners are generally the face of the company. They meet clients, interview them, present plans to them and hold the licence/representatives. Paraplanners do all the behind-the-scenes work. They get client information from the financial advisor, then research and choose the best options to suit the client’s needs and return these to the planner. There are two main types of paraplanners; one is in-house, and the other is outsourced paraplanning. Outsource paraplanning Services can be beneficial for small businesses.
It is important to remember that different practices have different balances of responsibilities. Paraplanners may be supervised by authorised representatives, while paraplanners can be used for product research. However, independent financial planners might rely heavily on paraplanners. You can search online for paraplanner and financial planner job ads. Scroll down to the section titled ‘key responsibilities’. Some require general administrative and filing tasks, in addition to core Paraplanning Services.
Financial planners are responsible for most communication, interviewing and negotiating with clients. They need to have a working knowledge of financial products, a positive attitude, and a proactive approach towards ethics and legal compliance.
Clients may speak with you occasionally over the phone or not at all.
Interview information for a financial planner
Performs financial product research
Plan your trip with a planner.
Some administrative and filing work
Administrators implement the advice.
Monitors and examines timetables
Employer of a licence holder
Clients are usually met in person.
Client interviews to learn about their needs and goals
Guidelines and direction for product category research
Clients are presented with proposals.
Assists staff in managing and delegating administrative tasks
Implementation of advice directly
Reviews appointments according to timetables
Authorised representative/licence holder
Paraplanners vs financial planners
Financial planners must now have a relevant degree and a year of experience. This new RG146 standard is more demanding than the previous RG146. These regulations have been changed to improve professionalism and public confidence.
These changes bring financial planning closer to the standards of related professions like accounting and property law.
This means that the path to becoming a financial advisor is longer than ever. It can take years to get approved degrees, regardless of full-time undergraduate degrees or approved graduate qualifications. This is not necessarily a bad thing. Those years of study will give you a deep understanding of financial systems and the ideas that underpin great advice. It’s worth looking into if you aren’t sure if you want to be a financial planner.