A paraplanner is typically a junior member of a financial services firm who deals with the administrative tasks required in the client-advisor relationship.
“A paraplanner can range from entry-level to experienced,” says Alex Hopkin, founder and CEO of Simply Paraplanner. They can have their certified financial planner designation, be a CFP candidate or choose not to have a designation.
“They can be a W-2 employee or have their own paraplanning business working with multiple advisors,” Hopkin says. “They can be a part of a firm on a part-time or full-time basis. And they are typically back- or middle-office, with strong technical financial planning knowledge.”
Here’s what aspiring paraplanners should know about the profession and how to become a paraplanner.
What Is a Paraplanner?
A paraplanner fills a supporting role for a financial services firm, often doing the background work and data analysis to support their financial advisors. The role is more than an office manager although the two titles used to be nearly synonymous.
A paraplanner’s duties will vary depending on his or her level of experience. Entry-level paraplanners may focus on data entry, accounting paperwork, reviewing financial documents and other service-oriented tasks. Meanwhile, a more experienced paraplanner could do all the previous tasks, plus create actual financial plans, onboard clients and even present financial plans to clients.
At UBS, paraplanners, called wealth planning associates, “provide professional expertise and consultancy to create and deliver financial plans, propose wealth management opportunities and deliver advice to clients,” says Sean Howe, a senior vice president of wealth management and portfolio manager with UBS Financial Services. “They serve as financial planning advocates and experts, with the goal of building relationships with advisors as a trusted partner.”
The paraplanner at Capital Asset Management Group is the first the company hired. She started as a summer intern, did a good job and was made an offer at the end of her internship. She now supports the service and associate advisors.
“(She) serves as the eyes and ears for the planning team,” says Samuel Boyd, a CFP and senior vice president of Capital Asset Management Group. “Her attendance in all meetings allows for a large amount of client-facing, in-meeting experience in an effort to accelerate her professional development while serving in a supporting and quality assurance capacity.”
How to Become a Paraplanner
There are no formal qualifications to become a paraplanner, but it’s generally expected that you’ll have a bachelor’s degree, ideally in finance or accounting.
Many firms will also expect you to have basic knowledge of financial planning and be comfortable using planning software. You can often get a demo version of common financial planning software to help learn the ropes.
Beyond this, aspiring paraplanners can also get certifications, such as the financial paraplanner qualified professional, or FPQP, designation offered by the College for Financial Planning.
There are no prerequisites to get your FPQP. You just need to complete the coursework and a final exam. Once you get your FPQP, you’ll also need to complete 16 hours of continuing education every two years.
Paraplanner salaries range from $36,000 per year to over $73,000 across the nation. Their salaries can include a base salary, plus bonuses and incentives.
The average base salary for paraplanners in 2021 is just under $50,000, according to salary.com.
Types of Paraplanners
There are two primary types of paraplanners:
— Future advisors. Some professionals start as paraplanners with the intent of transitioning to a financial advisor or financial planner role later. These individuals may work as a paraplanner while preparing to get their CFP marks or other industry licenses.
— Career paraplanners. A career paraplanner has no intention of becoming an independent advisor or financial planner. Career paraplanners are content to stay in their role as vital support to other planners.
Career paraplanners who have no plans to move up the ladder can be great assets to a firm. Since they’ll be in the same role throughout their careers, they could easily become an expert on the firm’s clients and planning philosophy.
Some paraplanners may even have their CFP designation but still prefer to work as a paraplanner rather than an advisor. Howe believes a paraplanner who is a CFP is a major benefit. “The rigorous education requirement, ethical standards and continuing education are fundamental to being a well-rounded practitioner,” he says. “The curriculum also provides a wealth of knowledge as they are building experience working with clients.”
He has also found paraplanning to be a good launching point for many aspiring advisors. “We have found this role attracts driven, organized and growth-minded individuals,” he says. “Thus, providing a natural segue into becoming a financial advisor for the younger population, which addresses the issue we face in our aging profession.”
Paraplanners can also work for a single firm or as an independent contractor. The former lets you become familiar with a firm’s procedures and clients and lets you develop more of a routine. The latter gives you the opportunity to work for various firms and see a variety of approaches. If you aspire to have your own financial planning practice one day, being a freelance paraplanner may be a great way to start your journey.
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