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What paraplanners want: How advisers can work better, ditch the double-ups and make staff smile

It's not a corner office or a fatter pay packet at the top of paraplanners' collective wish list, but something that is much more beneficial to financial advice practices and the clients they serve.
In Practice

Sure, a salary increase would be welcome. But if an adviser really wants to make their paraplanner smile, Mel Drago believes, they should start with the basics and give them clear, decipherable data to base compliance documentation upon.

Drago, the founder of paraplanning outsourcing firm Tanngo, surveyed compliance officers across the country for the group’s 2023 Australian Paraplanner Survey, which takes a deep dive into the statistics behind the paraplanning sector and identifies some of the themes and narratives behind the numbers.

The biggest hindrance to getting SoAs out on time, according to paraplanners, is a “lack of information at the job’s outset”, which 92 per cent of respondents identified with.

  • “Incorrect data” was the next most common response.

    Speaking to The Inside Adviser, Drago explains how conflicting data is the “the biggest struggle” paraplanners face.

    “Records in Xplan that aren’t updated, data the adviser has typed off the top of their head and put into a file note, a fact find that’s outdated… In a lot of cases all this data is different,” she says. “It might only be a slight difference but when you’re writing an SoA you obviously need to know which figures to use.”

    “What paraplanners are looking for is a single source of truth.” Melanie Drago

    Even more difficult, she says, is when advisers don’t record all the necessary client data. “I’m talking about critical data like contributions, interest rates for debt anaylses, expenses… simple stuff like that gets missed.”

    Lost in translation

    Sloppy practices mean paraplanners either have to spend more time either doing extensive vetting, going back and forth with the adviser, or doing multiple drafts of the same statement. Any of these options act as a drag on practice efficiency, explains Conrad Travers, principal at compliance consultancy outfit Tangelo Consulting.

    “The 80/20 applies,” he says, referring to the Pareto principle which states that for many outcomes, roughly 80 per cent of consequences come from 20 per cent of causes. “If the adviser focusses on the data processes up front it always leads to a more efficient process and less double handling on the back end.”

    Joel Ronchi, chief executive at compliance consultancy Fourth Line, believes the issue isn’t so much in the collection of information but the dissemination of it.

    “What we see is that the advisers generally collect information quite well, but it’s the collation of that information and delivering of it to paraplanners where the process breaks down,” he says. “It gets lost in translation in some way.”

    Single source of truth

    Clients come first for advisers, but to run a profitable business they need efficient systems. For paraplanners, an ecosystem that is functional is also much more satisfying to work within.

    “What paraplanners are looking for is a single source of truth,” Drago says. “We need better data capturing practices, simplified forms that have validation measures, and more use of other [first-hand] forms of verification like ATO and bank statements.”

    The proliferation of advisers using handwritten notes to direct paraplanners is of particular concern, she says, with 30 per cent of paraplanners reporting the practice.

    “I was shocked,” Drago says. “I do see them on occasion myself and some of the handwriting is atrocious, it’s just scribbled on the side of the page.”

    It’s understandable that advisers might want to take handwritten notes while they speak to clients, she adds, but relying on those notes for SoA direction can only invite communication errors.

    “It’s alarming to me when people talk about replacing paraplanners with artificial intelligence, when the data isn’t right from the start,” she said. “If humans are not getting it right, how is AI going to do that?”

    Tahn Sharpe

    Tahn is managing editor across The Inside Network's three publications.

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