Our Managing Director, Chris discusses the birth of the Paraplanning role and just how varied the Paraplanning salary scales can be.
Having been in the Financial Services industry for over 25 years I can confirm that I was there at the birth of The Paraplanner, probably very late 90s or earliest of days in early 2000s. Though difficult to recall the actual date, I specifically remember the first time the phrase was used by a client. There are two things striking about the Paraplanning industry today and that is the large increase in salaries paid to these now highly qualified professionals and also the prevalence and wide array of the job title.
The salary range is extensive; from £25,000 to £60,000. There are IFA Administrators conducting technical support work including reports and research, providing at least partial paraplanning support to the Advisors that will be on a typical Senior Administrator salary of £25,000 (add £10K for London). Whereas at the other end of the scale a Chartered and highly experienced Technical Assistant deeply immersed in client work and the advice process now commands a salary of up to £50,000 (add £10K and more for London).
There are many Paraplanners out there that do not have any of the industry qualifications, probably working in a regional IFA firm where the support they provide to the Advisor population is prominent in the business. However, there is no need from the Directors of the business for their technical team to be qualified and maybe for the Paraplanner they are simply nonessential for their life and career. Given their skills and experience, these candidates would still conduct a salary in the £30,000 to £40,000 bracket dependent on years in the role.
For those who pursue the exams the first step is to get to Level 4, whether CII, CISI or LIBF and not only will salaries increase as you move through the papers, some employers will directly link your remuneration to your exam success whether salary increases, bonus payments or both. The majority of Paraplanners tend to be following an exam route and this student could be working in almost any Financial Advice environment such as regional or national IFA, top-end Wealth Manager, financial planning team within an Investment Manager, Solicitor or Accountants.
The newly promoted Paraplanner with only months of experience and, so far, just RO1 under their belt would probably be paid £26,000 to £30,000. The Level 4 qualified Paraplanner with a few years’ experience will be in and around the £32,000 to £38,000 bracket with those progressing through the exams positioned on the various salary steppingstones in-between. And add £10K for London!
Benefits vary greatly from firm to firm and all Paraplanners should take into consideration the benefits on offer and not just the salary. All businesses of course now provide Auto-enrolment pension as part of their offering with an average firm typically paying perhaps a little bit more at 5% employer and 5% employee contribution.
Bonuses can make a valuable difference to any package, though can range from a couple of hundred pounds extra at Christmas and at the other end of the scale maybe around 10% of salary. These bonuses are always discretionary and usually based on company success though some can be at least partially dependent on individual performance.
There is a great range of other benefits available and the more contemporary firms are offering them on a highly flexible basis, though as well as pension and bonus the next most valuable reward scheme is in relation to the Paraplanner’s studies. An advisor firm offering the full suite of exam support will now cover the cost of exams, study materials and membership plus study leave, all of these are crucial to the individual’s success on exam day.
Moving into paraplanning is mostly through the IFA Administrator route though certainly not always, sometimes Advisors and other well-qualified industry professionals decide to focus on the technical aspect of their career. Once in the role, some candidates choose to settle in as a Level 4 Paraplanner whereas others wish to push onto the next level, typically by qualification and becoming Chartered, or by career ladder and moving into managing others as a Paraplanning Manager, or possibly the natural progression to Financial Planner if they feel they have the additional skillset that requires.
In summary, the role has evolved in tandem with that of the IFA and given the complexity of the planning required today, the extensive utilisation of technology never seen before and the sheer workload of servicing a client portfolio the Paraplanner, as mentioned a relatively new role within the industry, is now firmly set in all our minds as a crucial piece of the financial planning machinery.