Paraplanner numbers set to boom as RDR approaches

Paraplanner numbers are set to soar as the RDR approaches, with industry experts suggesting they will become a vital part of all IFA practices.

Recent research suggest paraplanners are increasingly being used by advisers to free up more of their time to see clients, with some suggesting the RDR will accelerate the growth of the profession.

Jonathan Gumby, director at NMG Financial Services Consulting, says the RDR will prompt growth in demand for paraplanners, as well as driving more people to take on the role.

Current studies show a number of people who do not plan to be working as an IFA post-2012 want to take up a different role in the financial advice business.

Gumby believes many of these will opt for a role that does not require a QCA level 4 qualification, such as paraplanners.

“At the moment, numbers are small, but I would expect to see this rise rapidly as we approach 2012 and advisers start thinking about what they can do with their level of skills and qualifications,” he explains.

Martin Vaughan, founder of Paragon Paraplanning and co-founder of theparaplanner.com, also expects more advisers to look to paraplanning as a career as 2012 approaches.

“A lot of advisers are waiting to see what the eventual qualifications requirements will be and it is important for them to know there is a place for highly experienced, technically minded people who don’t have a QCA level 4 qualification,” he says.

“It would be a major loss to the industry if people with 30 years of experience leave, when they could continue to serve a vital role by becoming a paraplanner.”

Another trend noted by Gumby is for some larger firms to buy up smaller IFAs that rely on indemnity commission and get their advisers to begin working as paraplanners to transition them away from the traditional business model and towards a post-RDR ideal.

The growth of paraplanners has led to a number of recent developments to formalise the role, including a clearly defined job description from the Institute of Financial Planning (IFP).

The IFP is also due to unveil a new paraplanner qualification in October, saying paraplanners have become a vital part of the future of financial planning.