What to Know About Outsourcing Paraplanning Services

Developing financial plans lies at the core of what you do, but a busy schedule may have you looking for help with this task. That’s where paraplanners come in. Paraplanners can complete certain tasks in the planning process so that advisors can spend more time with their clients. Some advisors choose to hire in-house staff for this role, while others rely on outsourced paraplanning services.

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Understanding the Paraplanner’s Role

A paraplanner works in a supportive role for financial planners and advisors. They can perform a wide range of tasks through the planning process so that you have more time to work with clients individually.

For example, you may hire a paraplanner to:

• Analyze clients’ financial data
• Prepare financial reports
• Research market trends or investment products
• Ensure compliance
• Handle client scheduling
• Organize client documents

A paraplanner may interact with clients directly or assume a more behind-the-scenes role. Their daily tasks may involve using financial planning software or your customer relationship management (CRM) platform to carry out their duties.

Advantages of Outsourced Paraplanning Services for Financial Advisors

Paraplanners may work in a full-time or part-time capacity as part of your in-house team, or they may work remotely through an outsourcing company. Outsourcing may be more appealing for several reasons, such as:

• Simplified hiring. Working with a trusted outsourcing platform can spare you the hassle of having to go through a lengthy hiring process. Outsourcing companies do all of the heavy lifting for you when it comes to vetting paraplanners and verifying their credentials and experience.
• Cost efficiency. Adding a new employee to your roster can be cost-intensive. You may need to invest time and money into training them and, of course, you have to cover their salary and benefits. Outsourced paraplanning services, by comparison, typically charge a fixed fee, so you can more easily calculate the short- or long-term cost.
• Expertise. Paraplanners are often financial professionals who may not be quite ready to go independent or join an advisory firm. That means they bring extensive financial planning knowledge to the table. Some paraplanners specialize in certain planning areas, which could be beneficial if you’re hoping to develop a new service offering. They may hold professional designations, such as the Financial Paraplanner Qualified Professional (FPQP) certification.
• Flexibility. A primary argument for using a paraplanner is the scope of freedom it grants advisors. Rather than spending a sizable chunk of your day bogged down in tedious planning tasks, you can stay focused on client interactions and engagement. Using outsourced paraplanning services also allows you to choose how much of the planning process you’d like to hand off, so the experience is tailored to the way your business operates.
• Compliance monitoring. Compliance is a chief concern for advisors, but you can’t keep an eye on everything all the time. A paraplanner comes with a second set of eyes that can monitor your firm’s operational practices to identify any potential compliance issues.

Choosing an Outsourced Paraplanning Service

Paraplanning services may overlap from one company to the next, but it’s important to research your options thoroughly. That means first defining what it is you need or what you want a paraplanner to assist you with.

This step may require some self-assessment, starting with an examination of how you spend your time each day. Once you have a detailed list of tasks, you can go through it and ask yourself which ones you would most like to delegate to someone else. The next step is comparing paraplanning services.

Here are some helpful questions to ask:

• What is the scope of services your paraplanners offer?
• Are there any tasks your paraplanners are not equipped to handle?
• What screening methods do you use in hiring? For example, do you require your paraplanners to have a specific educational background or hold a professional credential?
• Do your paraplanners work on a full-time or part-time basis?
• Do your paraplanners have any specialty expertise?
• How are communications between advisors and paraplanners handled?
• Do you primarily work with established firms, or can you help advisors who are hoping to scale?
• How does your pricing work?
• Am I required to sign a contract? If so, for how long, and what happens if I determine that your paraplanning services are no longer a good fit?
• Do you offer a trial period or a demo?

If you know of advisors in your network who use outsourced paraplanning services, you might ask them for a recommendation. You could also ask what they find most or least helpful about working with a paraplanning service.

Another key question to ask is where they are located. Many paraplanning services operate outside of the U.S., but have an international clientele. Location could make a difference if there’s a sizable time zone gap between you and your paraplanner.

Where to Find Paraplanning Services for Financial Advisors

A simple internet search turns up results for outsourced paraplanners in the U.S. and abroad. Here are a few of the companies you may come across in your search.

• LPL Financial. LPL Financial is the largest independent broker-dealer in the U.S. The company provides numerous support services for advisors, including paraplanning services. You get a customized plan for services while your paraplanning team remains in the background, performing key tasks on your behalf so you can stay focused on clients¹.
• Commonwealth. Commonwealth’s virtual paraplanning program connects growth-focused advisors with a duo of credentialed paraplanners². These individuals are part of the Commonwealth Wealth Management team, which means they bring plenty of experience and expertise to the table.
• Embee NextGen. Embee NextGen operates globally, with a presence in the U.S., Canada, the United Kingdom, India, Australia and Dubai³. The company’s paraplanners are well-versed in projections and modeling, research, tech support and document preparation.
• Valenta. Valenta provides a range of paraplanning and admin services for financial planners. For example, you can get help with risk analysis and evaluation, cash flow analysis, financial plan generation, tax planning and retirement planning⁴. Valenta paraplanners are available on a part-time or full-time basis, for one fixed monthly fee.

Bottom Line

Paraplanning services can help you keep your business running smoothly while freeing up more time in your day. Outsourcing paraplanning gives you room to determine whether it’s a good fit for your firm, without a long-term commitment.  

Tips for Growing Your Advisory Business

• Paraplanners typically don’t help with marketing, but there are other solutions you might consider if you need help in that area. For example, partnering with an advisor marketing platform can pave the way to more leads. SmartAsset AMP (Advisor Marketing Platform) is a holistic marketing service financial advisors can use for client lead generation and automated marketing. Sign up for a free demo to explore how SmartAsset AMP can help you expand your practice’s marketing operation. Get started today.
• In addition to a paraplanner, you might consider bringing a virtual assistant on board, as well. Virtual assistants can help with tasks that don’t fall under the scope of a paraplanner. Thorough vetting can help you find an experienced VA who has a history of working with advisory clients.

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