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Paraplanning often involves the non-client-facing, data-driven aspects of a financial plan. Services range from providing more administrative tasks to the development of complex financial plans.

Pra-chid/iStockPhoto / Getty Images

The increasing focus on holistic financial advice and financial planning in Canada’s financial services industry may lead to increasing demand for paraplanners – especially among those who bring an advanced skill set to the table.

Paraplanning often involves the non-client-facing, data-driven aspects of a financial plan. According to Jason Heath, managing director and an advice- and fee-only certified financial planner at Objective Financial Partners Inc. in Markham, Ont., paraplanning services range from providing more administrative tasks to the development of complex financial plans.

It’s also an established service in the advisory space in places like Britain and the U.S. For example, a survey that Canada Life U.K. Ltd. conducted in 2018 found that almost half (49 per cent) of financial advisory firms in Britain employed at least one paraplanner; at that time, an additional 30 per cent were expecting to employ a paraplanner or paraplanning service in the near future.

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Anecdotally, the use of paraplanners is less prevalent here, Mr. Heath says, with very little of this work currently being outsourced and some being undertaken in-house. That may change as more financial services firms focus on providing financial planning, which is being driven by demographic changes, such as more Canadians having the responsibility to create their own retirement income and an increase in self-employed individuals.

“For the independent firms to compete or even just to satisfy client demand, there’s a real need to provide financial planning,” he says. “There’s just growth, generally, whether it’s in-house or whether there are some firms who might be considering outsourcing [their financial planning work].”

For example, while Mr. Heath’s firm focuses primarily on working one-on-one with individual clients, his team has also been approached by third parties – typically investment advisors, but also other professionals such as accountants and insurance agents – looking for paraplanning support. These firms, he says, are not seeking help with basic data-focused tasks or quick calculations, but complex and advanced financial planning solutions.

That work can involve building comprehensive retirement and financial plans, helping with issue identification, calculations or analysis, or providing other deliverables advisors can use for their clients, he says. In those situations, his firm acts behind the scenes, essentially as an outsourced financial planning department.

“[These advisors] want to focus on what they do best, often managing investments, and they’d prefer to outsource financial planning to a third party,” Mr. Heath says. “In other cases, it’s capacity. Advisors that get to a point at which they’re so busy managing client relationships that they can’t [focus on] client service, investment management, and financial planning.”

Ideally, the financial planning process is at the highest quality when the paraplanner and advisor are both highly skilled, and everyone involved is playing to their strengths, says Sandi Martin, partner, chief operating officer, and financial planner with Spring Planning Inc.

Although Ms. Martin has been working with paraplanners for the past four years, the firm’s model has evolved away from one in which less experienced financial planners gather client information, extract data and prepare a foundation report on a contract basis.

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“Paraplanning is a key, linchpin role. We made some assumptions about where people are able to start and how paraplanning could be an entry-level career path role and those were incorrect,” she says.

As of earlier this year, in addition to her own client-facing work, Ms. Martin has taken on the role of file setup, data analysis, and early strategizing role within her firm before she passes the file on to her partner, who writes the final plan and presents it to the client.

The end goal, she says, should be to deliver a financial plan to the lead advisor on a file that is complete, accurate, and requires minimal to no revisions, allowing them to focus on strategy with the client.

“From the person who really enjoys the detail work and doesn’t enjoy the strategy work as much, I love that this is an option. I think there are a lot of people like me,” Ms. Martin says.

From a business perspective, delegating responsibilities to a paraplanner requires an entrepreneurial mindset, says Elke Rubach, principal of Rubach Wealth in Toronto. It’s an acknowledgment that the lead advisor cannot be all things to all people and that everyone has areas that they prefer and excel at. In her case, it’s spending more time with clients and working on their overall wealth-management strategy.

“People have to be willing to share the pie and, of course, it takes from your profit, but if you have the client in mind, you need to do that,” says Ms. Rubach, who has worked with both in-house and external paraplanners and looks for those who offer attention to detail, creativity, and have the ability to highlight what could go wrong with a client’s plan.

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Looking ahead, she says she expects technology like artificial intelligence to play a larger role in the more straightforward paraplanning work in Canada. But complex files in which rules of thumb may not be useful will still require a skilled professional who understands the nuances of the client’s situation.

Ultimately, Mr. Heath says the trend of investment advisors and portfolio managers responding to increased client demand for financial planning may lend itself well to the development of partnerships with paraplanners and other professionals to provide more holistic advice to clients.

“If they want somebody to produce deliverables and don’t want to have to worry about financial planning software and processes and knowledge in-house, paraplanning can certainly be a good option,” he says.

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