The Future of Paraplanning

“Change is the only constant in life” – Heraclitus.

The world is changing rapidly, and our way of living and working is no exception. One of the biggest shifts has been towards decentralisation – the process of transferring power and control from central authorities to individual citizens and local communities. But what does this mean for Paraplanning? In this article, we'll explore the future of Paraplanning in a society moving towards decentralisation with no signs of slowing down.

Decentralisation, not to be confused with hyper-individualism, has slowly been overtaking the centralised system for decades. This shift is evident in various sectors, such as decentralised media (e.g., blogs, podcasts, social media), decentralised energy (e.g., solar panels, wind turbines), and the rise of self-employed workers. Contrary to its surface-level appearance, though decentralisation does involve a greater degree of individual autonomy and decision-making, it does not entail a rejection of collective or communal values. In fact, many decentralised systems are designed to enable greater collaboration, cooperation, and shared decision-making among participants. Millennials and Generation-Z are most associated with decentralisation, as they champion autonomy, transparency, accountability, and self-expression.

The Paraplanning sector has witnessed a significant trend towards decentralisation over recent years. According to a Personal Finance Society survey in 2018, around 24% of Paraplanners were self-employed or employed by an outsourcing firm, compared to just 5% in 2015. This startling contrast does not include the effects of the pandemic, which were likely remarkable. The kind of Paraplanners making this move are "career Paraplanners", which poses a great threat to the Financial Planning practices that are still desperately clinging to the dream of a highly experienced, fully staffed, in-house Paraplanning team. The reality is that it no longer pays to remain in-house as an experienced Paraplanner, unless you’re using Paraplanning as a steppingstone to become a Financial Planner or gain experience within a specific specialism.

So, what does this mean for the future of Paraplanners? If circumstances continue their current trajectory, in-house teams are likely to have a much higher turnover as they’re used by Paraplanners for experience before becoming self-employed or continue to be used as a steppingstone to become a Planner. While outsourced Paraplanners are likely to gain significant professional standing, winning reputations as technical consultants, furthering the awareness of Paraplanning as a viable career-option in its own-right and representing the majority of the experienced Paraplanning force, all while the demand for Paraplanners continues. This will likely leave a lot of Financial Planning practices scrambling for Paraplanners and vulnerable to inexperienced staff.

However, there are benefits to being an in-house Paraplanner that can be leveraged, such as client interaction, teamwork, and professional creativity. In addition, firms can increase their offerings to Paraplanners, such as pay, flexibility, and increased autonomy, to close the gap between the outsourcing routes.

In conclusion, the process of decentralisation has already begun, and financial planning practices need to adapt. While there's still a place for in-house Paraplanning, the work-life balance "trend" is ravaging #Paraplanning departments, and practices need to be willing to make the necessary changes to remain relevant in a society hurtling towards decentralisation.