Regulation, will we ever get it right?

mansleepingI had the great fortune to sell my IFA practice 10 years ago, a driver for taking the plunge was that having worked under the ‘control’ of 4 different regulatory regimes- NASDIM, FIMBRA, PIA and FSA, the prospect of never seeing a balance of common sense and fairness painted a very bleak future.

The jury may still be out in that regard, but I think we are at the stage where the Judge may be directing the Jury that a majority decision would suffice.

I am not normally driven to negativity, cynisim maybe, and while I do see an absolute need to have regulation of financial services, it seems to me that wherever there is regulation, chaos and extreme cost is the outcome with blame being laid at the door of the weakest.

Some key facts to digest:

  • Regulation is poorly thought out in just about every industry
  • It is reactionary rather than pro-active
  • It is not always retrospective, although in financial services it seems to be an exception
  • Nobody ever listens to the voice of experience
  • Nobody ever learns from past failings
  • Nobody in regulation admits failure
  • Nobody in regulation takes the blame
  • Everyone in regulation benefits from ‘learnings’ and earnings
  • Regulatory failure is rewarded not punished
  • Regulation is an industry, it is hermaphroditic, capable of self procreation and without something to bash it would have no purpose. As Keith Richards (Rolling Stone not PFS) once said “In the business of crime there’s two people involved, and that’s the criminal and the cops. It’s in both their interests to keep crime a business, otherwise they’re both out of a job.”


Regulation should not be pursued at any cost and in such a way, applied like a tattoo only to be regretted when the effect of the alcoholic induced stupor that fuelled its creation has gone away. The NHS is an example of regulation on ‘acid’.

Has the consumer benefited? Many may say no. Access to financial advice for the masses has been exterminated. Even if it was freely available, there is insufficient capacity to service any more than around 10% of the population based on the recent Heath Report and the FAMR will not correct that imbalance as was intended.

In 2009 the great and the good expressed concerns about the impact of RDR and how it will disenfranchise consumers, here but just a few to prove my “Nobody ever listens to the voice of experience” comment

  • Otto Thoresen – CEO ABI, then of Aegon: “The RDR is only helping wealthy customers”
  • AXA April 2009: “We will lobby the FSA to make sure the RDR does not mean less are able to access advice”
  • Institute of Financial Services: “RDR will impair financial advice before improving it”
  • Alasdair Buchanan Scottish Life November 2009: “Sales advice is a real cop out and extremely confusing to investors”
  • Stephen Gay – Aviva June 2009: “The regulator has failed to consider the danger of adviser charging limiting access to advice for those on lower incomes”
  • Lord Lipsey: “Consumers in the middle (not high net worth or money guidance fodder) to be sold products by banks under the contradiction that is sales advice”
  • Walter Merricks former Chief Ombudsman: “I think it would be unwise to count on the assumption that complaints from the retail investment world are suddenly going to go down as a result (of the RDR)”
  • Deutsch Bank report August 2009: “There has been industry talk of 30% or even 50% of IFAs exiting the industry post 2012, which is not impossible”
  • Paul Selly HBOS: “Bancassurers set to benefit”
  • Richard Howells Director Zurich Life June 2009: “The big question mark is still around what benefit it will have for the ultimate consumer. I am still not convinced that all of these changes, when you sit down with a consumer and explain them, actually give rise to a consumer benefit that I can really hang my hat on.”
  • Martin Lewis Money Saving Expert June 2009: “There’s a worrying possibility that the FSA is about to kill off independent financial advice in the UK for all but the wealthy. I do hope I’m wrong. I’m not convinced most people will want to pay for advice. The commission route has the advantage that you don’t pay a fee each and every time you want information; you can go without the worry of laying out cash. What I find most galling though is that bank-based advisers – those primarily responsible for PPI miss-selling, endowment miss-selling, investment miss-selling and generally poor advice all round are still to be allowed to be remunerated based on the number of sales.”
  • Janet Walford OBE, Editor Money Management Sept 2009: “I am not paranoid enough to believe that the FSA has a hidden agenda to do away with small IFAs, but the law of unintended consequences may well mean that this will be the result. This is especially the case when set alongside the myriad of other proposals that are costing some £430 million to set up, with ongoing fees of £40 million pa thereafter, a mind boggling amount of cash.
  • Peter Hamilton barrister, Source: Money Management Oct 2009, Scrapping the FSA by Marie Jennings MBE: “The Financial Services and Markets Act does not permit the FSA to cancel an authorisation simply because the FSA has changed its views on what the appropriate qualifications should be…. It is one thing to impose new rules for new entrants to the IFA profession, it is quite another thing to disqualify someone who is already qualified.”
  • David Hazelton of Tax Incentivised Savings Association (TISA) 30/10/09: The RDR could be detrimental to consumers both in terms of higher product charges and an increase in the cost of advice, warns the Tax Incentivised Savings Association (TISA). Implementation costs for the RDR are being “seriously underestimated” and product charges will consequently have to be raised.
  • Robert Kerr, head of retail distribution development at Scottish Widows says: The RDR could have the unintended consequence of “disenfranchising” the majority of consumers from financial advice. “Our key concern is the RDR proposals will act to drive advice upmarket, with financial advice becoming the preserve of the wealthy leaving mass-market consumers un-served,”
  • Nigel Waterson MP when Shadow pensions minister: “While no-one can object to raising the standards of training and competence, should an emphasis on exams take precedence over on-the-job training and experience?

Fines are at record highs for the same bad behaviour from the same suspects, regulatory costs are at an all time high, huge FSCS levies continue to hit ‘small businesses’ when least expected, politicians have no control of those they leglislate to regulate, those employed in financial services regulation have increased, those employed in the financial services sector they regulate have decreased.

The problem with regulation in 2016 is that you cannot regulate for lack of common sense, yet that is what we keep trying to do. Caveat emptor has gone.

We have lost the use of that in-built gene of common sense when looking at constructing and applying regulation.. Its loss went along with map reading skills, crossing the road after looking both ways, not talking to strangers, proficient cycling, spelling ability, simple mental arithmetic skills and very many more.

The world has truly gone mad, or at least it has in UKplc’s regulation section.

We have a society that is now readily and speedily offended on somebody else part for just about everything that simply should not matter as much as it does.

We have borders that are not fit for purpose, we have an NHS in meltdown because the service is now aspiration and expectation based, rather than focusing on the basics of it’s original 1948 founding principles (comprehensiveness, within available resources) and a country controlled not by UK based elected politicians but by unelected civil servants, quangos, eurocrats and regulators.

To top that we now have ‘Brexit’.

To borrow that famous Bob Monkhouse quote “ When I said that the proposed RDR regulation would not work, everybody laughed. Well they’re not laughing now.

Miracles happen, or is it just wishful thinking?

The restoration of trust in the industry is vital for its success going forward. But trust works both ways. Firms should have trust in the regulator and the regulatory process that should be nurtured by a mixture of clarity, fairness and pragmatism.

Ombudsman decisions should be based upon the evidence available and/or the balance of probability. They should not be based on ‘coulda, woulda, shoulda’. This survey, exactly like the one we did in 2011, makes it clear that ‘creative Ombudsmanning’ is still at work and that is not fair. Until firms have confidence in a consistency of fairness of adjudications and clear evidence of impartiality, an unobstructed path to regaining trust is just not there.

Ombudsman decisions should reflect the processes, rules and rigour that a previous, relevant and applicable Ombudsman would have to take in an adjudication process. Decisions increasingly seem to be made, if our survey is to be a guide, with the benefit of hindsight and an application of today’s regulatory expectations rather than the rules and standards of previous regulators like FIMBRA, PIA and the FSA. That does little to support the ethos of an Ombudsman’s role of being an independent resolver of disputes and again, little towards regaining trust in the industry.

Experience and understanding of the markets one regulates is vital to ensure good Ombudsman decisions. Is it not therefore, by default, important that those who adjudicate on complaints have an equal understanding and, even more importantly, extensive experience of what was accepted practice and regulation then, not what is now and work back?

Tony Holland, the PIA Ombudsman, ensured all his adjudicators had relevant industry standard qualifications, this rule also applied to himself. His recommendation to Walter Merricks to ensure this practice continued when taking on the FOS role was ignored.

To see so many advisers seeing fraudulent claims is a frightening statistic and it does little in the ‘support department’ for regaining trust in the industry if you are fighting a battle to see trustworthy behaviour from your clients. The ability for some consumers to lie knows no bounds it would seem.

Stress is a big part of any complaint resolution process, for both sides. It is worsened however for the adviser firm when the complaint is simply and clearly a fabrication that could/ should be recognised very quickly in the adjudication process but for some reasons often fails to be.

Grooming’ – a word not often applied to financial services.  70% of respondents have seen awards made for an event hat has not actually happened or has not been complained about. This is way too high. The FOS role should be to adjudicate on the balance of evidence available and/or probability. It is not a licence to ‘go fishing’. Although I have no evidence to support the view, some say that the FOS process is target driven; the more cases that find their way into the system means bonuses for those concerned. If that is true, again, this does not help restore trust in the industry.

This is effectively a form of commission?

We have seen changes to the employment tribunal rules where, amongst other measures, the claimant has to lodge £1,000, which they forfeit if the case is found against them. These new rules have seen a dramatic reduction in claims

The key to good adjudication is the evidence available; it is inconceivable that the UK justice system would have survived for so long if 86% of those in the ‘dock’ felt that the judge or jury had already made up their mind before hearing the evidence. In many FOS cases it would seem from the survey that evidence is secondary to the need to ensure the consumer is the winner. This is not a game of consumer winners, or losers, it is about the perception of both parties view of fairness of decision making.

The latest figures released revealed in regard to employment tribunal cost changes show that between 2012 and 2013 there was a 79% reduction in claims. I feel a similar outcome would occur if a liability deposit cost applied to FOS cases. That would also have the effect of reducing the regulatory cost of doing business that in turn could be passed back to the consumer.

Walter Merricks said, quite unashamedly, that at the FOS, ‘we make the law’. Link that to failure or inability to supply evidence by the claimant and instead of placing a firm in a strong position the exact opposite is achieved and it is no wonder advisers feel the system is unfair.

The long stop is such a contentious issue, it is also the case that the Ombudsman’s rules make it clear that any decision made should give consideration to the Ombudsman’s rules applicable at the time the advice was give. The ‘Merricks’ interpretation of the word ‘consideration’ linked to the FSMA 2000 actions around the longstop have led to the unfairness problems we have today. It is immoral and most would take the view it is an illegality that requires legal challenge if reasoned argument fails to persuade.

It is encouraging to see the stoicism of advisers in the face of much adversity; really the question to ask (that for obvious reasons we could not) was: ‘Are you planning to enter the industry within the next two years?’

At the moment the costs and liabilities incurred by poorly thought out, ever changing and often retrospective regulation makes taking on new entrants an unattractive option for many firms. And an impossibility to start a new firm from scratch, ie no clients like many of todays long standing firms did.

To summarise, and as noted in our submission of the survey to MP’s and the regulator, “consumers absolutely have rights that should be strongly protected, but in doing so the adviser consensus seems to be that those rights would appear to be taking precedent over everything else. Confidence in a fair and unbiased Ombudsman service is vital and the right of all who use or engage with the service, the complainant and those complained about”.

To see the full survey results with all the comments, simply download this pdf.

FSCS, Data Protection and the Longstop

Advisers may be concerned to know about the recent FSCS handling of personal data when claims are received, the adviser has retired and the firm in question was NOT in default of the scheme.

When a ‘consumer’ approaches the FSCS (looking to claim compensation) and the firm from whom advice was obtained is no longer trading (as the adviser has retired) they are, if requested by the ‘consumer’, releasing information as to the whereabouts of that now retired adviser, even if the firm is not in default.

In correspondence seen, the FSCS is implying that it has the right to release such data when requested; quoting guidance it says it has from the Information Commissioners office (ICO).

This they say states that “ Where the FSCS has rejected a claim for solvency reasons (firm not in default) and the consumer wishes to pursue a claim, disclosure is permitted under the Data Protection Act 1998.

They go on to refer to the fact that they have received guidance from the ICO to that effect- providing this summary. 

Now here is the situation, and advisers should rightly be incensed as this could happen to anyone and illustrates only too well the need for a longstop to be reinstated:

The date of the advice (relating in this case to an endowment mortgage) was 1989, some 25 years ago

If the FSCS did accept the complaint, it would be dismissed as they do recognise the longstop.

The advisory firm- a partnership, closed in a correct way in 1998 with full PIA regulatory approval and it is not in FSCS default.

The adviser made it clear that he did not wish his address to be given and he gave some specific, valid reasons.

These reasons were dismissed by the FSCS.

The adviser told the FSCS that he would complain to the ICO as he felt it was unfair to release his details when the firm was not in default and that the complaint would have been dismissed under FIMBRA, PIA and FSA rules as well as the FSCS own rules by way of being out of time on so many levels, including their own application of a longstop.

The ICO investigated the complaint and remarked that the application of ICO guidance by the FCSC did not seem to be in accordance with what they deemed to be a reasonable interpretation of the Data Protection Act 1998 and the many updates applied since.

In addition they commented that a release of data such as requested would be “legitimate” only if the firm was still trading and that the business address was also the advisers home address.

The ICO case officer stated: “Thank you for raising your concern with us about the Financial Services Compensation Scheme Limited (FSCS) handling of your personal data. 
You are concerned that FSCS want to disclose your personal details to xxxxxxxx. 

It is our view that information about a sole trader or partner is likely to be personal data relating to that sole trader or partner; however, we accept that personal data relating to someone acting in a business capacity is less private than information relating to an individual’s home life. 

Where a sole trader’s personal data is released in the context of a business relationship the disclosure is unlikely to involve a breach of the first data protection principle. 

In addition, there are exemptions within the DPA that will allow the disclosure of personal data, specifically section 35(2) which states: 
“Personal data are exempt from the non-disclosure provisions where the disclosure is necessary  

  1. a.             for the purpose of, or in connection with, any legal proceedings (including prospective legal proceedings), or 
  1. b.             for the purpose of obtaining legal advice or is otherwise necessary for the purposes of establishing, exercising or defending legal rights. 

It is important to note that an organisation (FSCS) does not have to disclose personal data in response to a request from a third party simply because this exemption applies, unless obliged to do so under a court order. 

An organisation (FSCS) can choose whether or not to apply the exemption to make a disclosure, and it should do so only if it is satisfied that the disclosure would fall within the scope of the exemption. 

When deciding whether to disclose an individual’s personal data an organisation (FSCS) should also consider the first data protection principle which requires an organisation to process personal data fairly and lawfully. 

To assess whether or not personal data is processed fairly, an organisation should consider how it affects the interests of the people concerned.

Personal data may sometimes be used in a manner that causes some detriment to an individual without this necessarily being unfair. What matters is whether or not such detriment is justified. 

If FSCS were to disclose your details to xxxxxxx it would, in my opinion, be unfair. 

The ICO adjudication casts very severe doubts on the correctness of the statement made by the FSCS in justifying data release to a claimant.

Saying it can release data because “considerable weight has to be given to the legitimate interests of the customer” in this case was clearly wrong and unfair, the adviser has rights too!

We hope this decision by the ICO will put a stop to such bad practice and allow decent retired advisers with unblemished records to enjoy what is left of their lives free from worry or distress.

And going forward ensuring that those yet to retire enjoy the same protection that the Data Protection Act 1998 affords to all even if the Limitations Act does not.

Don’t put your daughter on the stage Mrs Worthington

For many older advisers out there the memory of starting their own adviser business may be a little hazy but I think now is the time to put a reality check in place for those ‘young gun’ entrepreneurs who may have been thinking this was a great idea for them to pursue today.


Because financial services regulation today has sounded the death knell for any directly regulated ‘little guy’ fulfilling his or her dream of starting their own, small financial advisory firm.

This is either the intended outcome of RDR and associated manoueverings or an unintended consequence. You, the reader, can decide.

Apart from asking the question “who in their right mind would want to start their own financial advice business” today from scratch, we should examine what is involved in starting one up.

And I mean from scratch, no poaching or walking off with someone else’s client bank from the firm you work at, but by starting with zero clients, a dream, a calling and a vision? Something that most if not all older advisers had to do and will remember only too well.

Let’s park the less than simple task of getting your first client and having them pay you. We need to look at what is involved to even be able to issue that first invoice.

And as Jessie J sang, “Its about the money”, lots of it. You have the idea, you have the plan, you have the qualifications and with that comes the first problem.

You need to be authorised to start and if you are sensible you will realise that outside help is worth paying for to achieve that if you want to avoid long waits. So on top of the £1,500 application fee, a further £3,000 or so should see you on the way.

On the authorisation journey, if you are an incorporated business (setting that up costs too, and, only the insane would take the route of sole trader) you will need to demonstrate that you have money to underpin the business. That is called capital adequacy, changing soon from £10,000 to £20,000.

Current minimum requirements are that firms must hold capital equal to the greater of four weeks EBR (Expenditure Based Requirement) or £15,000, by the end of 2013, the greater of eight weeks EBR or £15,000 by the end of 2014 and the greater of 13 weeks EBR or £20,000 by the end of 2015.

And, here’s the crunch, capital held for regulatory purposes is not working capital, many established small firms may find that their business activities must be restricted to work within the lower budgets available.

So a new firm, with no clients and no revenue has a problem that may stop the dream in its tracks at this stage.

On top of this, further costs will be incurred, assuming you still have the money.

You will need PI insurance.

Ballpark figures from AON based on a new start up (the areas of an advisers work plays a major part for Insurer’s to accurately rate the risk) and so these figures represent the minimum cost per Limit

Limit of Indemnity (Aggregate)  £1,600,000      Excess £2,500/£5,000 iro Pension & Investment    Premium £1,277

Limit of Indemnity (Aggregate)  £1,700,000      Excess £2,500/£5,000 iro Pension & Investment    Premium £1,393

Limit of Indemnity (Aggregate)  £1,800,000      Excess £2,500/£5,000 iro Pension & Investment    Premium £1,500

Limit of Indemnity (Aggregate)  £1,900,000      Excess £2,500/£5,000 iro Pension & Investment    Premium £1,626

You will need an office of some sort, serviced maybe, working from home was considered acceptable years ago, but for the newly qualified, new model adviser out there, working from home is not exactly the professional image you seek…….. is it?

You will also need:

  • Compliance consultant – Lee Werrall at CEI confirms that for a one-man band this could be around £150pm if all is straightforward
  • Marketing assistance
  • Accountant
  • Solicitor
  • Computer equipment
  • Software
  • Financial modeling and research tools
  • Car or transport of some kind
  • Back office and support (paraplanner/ pa)
  • Stationary
  • And a functional interactive website

You will need to have a significant wedge of cash should the FSCS want some money as soon as you start, by way of an additional pot topping-up levy for something that was nothing to do with you.

The FOS will take some of your money too by way of levy.

So it will not take too long to burn £20,000 or more, and still you have no clients.

And no income.

You will need to market what services you offer, differentiating you from those you think you are better than they are at doing the job And that costs too.

This famous song in the title, written by Noel Coward, could very easily be adapted today for the financial services ‘profession’, in particular the line that goes:

The profession is overcrowded. 
And the struggle’s pretty tough”.

It is overcrowded, there are only so many high net worth clients and existing firms should not be complacent enough to assume that their clients will be happy as milking cows paying high fund based fees for your services, especially given the noises coming from the FCA. And as trail may soon go too even long established firms could suffer, especially those who have been highly ‘acquisitive’.

Regulation and it’s cost has driven the mass market away from the thought that financial advice is worth paying for and given what surveys suggest consumers would be willing to pay, that is hardly likely to recover the set up costs for ‘Newco’ anytime soon.

If you look at the average hourly rate that advisers in the UK charge, according to our research with GfK and Touchstone, you will have to work a lot of hours at £165 p/h to just cover the start up costs, let alone your own day to day living costs, mortgage etc. And then wait to be paid, either from the client or by provider charging.

Work it out yourself.

The natural outcome from a double whammy of regulation linked to stiff competition will only see falling revenue streams, failing firms being the outcome and the ever increasing cost of regulation being spread across fewer firms as a result will put more out of business.

Regulators today are in many ways a ‘doppelganger’ of the trade unions of the 1970’s, creating unrealistic, restrictive working practices at high cost allowing little or no competition. And we all know how that ended.

Financial services as it stands today has the ability to be the industry that destroys itself by excessive, costly, ill thought out regulation imposed on the wrong people in the wrong way for the wrong reason.

The FCA has recently been trumpeting the fact that adviser numbers have gone up since RDR and the industry should as a result rejoice.

From January 2012 to July 2013 23,406 registered individuals have left the industry and 9573 have joined. Hardly something to shout about.

So, more on that subject soon, all may not be as rosy as the FCA may suggest and the minimal growth of 1231 RI’s will certainly not be made up of very many small, new DA firms starting up.

As American as Mom, Apple Pie and Baseball

Despite apple pie not being an American invention (the history of the good old apple pie goes back a very long way indeed) it is a phrase often heard to describe something that is unique to the culture and society you live and work in, illustrating principles or values with which few disagree.

They say that in democracies, the people get the governments they deserve. Is it now the case that in financial services, regulation has delivered the outcome consumers deserve?

The following were a selection of recent trade press headlines and I am fast beginning to despair about the image that this industry has. Who is responsible for that, does FCA regulation wish to see the death of the smaller adviser firm and in turn the demise of itself as nobody will be left to pay the fees?

            Martin Wheatley: Judgment-based regulation is here to stay

            Martin Wheatley: FCA is a ‘very different animal’

            Wheatley: Structured products are like ‘spread bets on steroids’

            FCA chief Martin Wheatley warns of higher regulatory costs 

            MM Wheatley interview: Bad consumer outcomes will see RDR revisited

            FSA reveals its latest executive pay and bonuses

            Advisers need to project positive image

            Complaints Commissioner rebukes FSA for withholding information

AMI boss Robert Sinclair is on record as saying that “we need a new deal where the FCA commits to no more money.  We also need them to consider where they really should be directing their attention.  

The bad in the industry need to be removed but the time has come for the regulator to consider the impact of statements like those above on consumers and those they regulate, in particular small adviser businesses.

As Sinclair said “We need recognition that most intermediaries live in the communities they work in. They advise people they see at school, in their pub, at the sports club and in the supermarket every week.  They are not out to do bad things to their neighbours”.  

They do routinely act in the customers’ best interests.  We need a regulator who can incorporate that into their risk models and factor it into their work. Finally, we need a new contract where they operate within a constrained budget by really addressing the real risks, not imagined one’s”.

The UK financial services industry is unique to the culture and society we live and work in, and financial advisers in a post RDR world as well as the pre, continue to illustrate the very best of principles and values with which few disagree, few that is except the regulator?

It is time we as an industry shouted about it too. And it is high time the FCA realised that regulation does have a cost but that cost is in lost businesses, lost opportunity and lost consumer confidence.


Today’s Paraplanner is?


Like salt and pepper, lock and key and Homer & Marge, some things in life are just meant to be together. RDR has expedited the already expanding nature of the Paraplanner’s role.

The RDR’s new regulations require increased adviser accountability, research and documentary evidence behind the advice process. The resulting benefit of time saved by working with an outsourced paraplanning firm is making paraplanners a ‘must have’ for the many smaller adviser firms who want to maximize their earning possibilities.

Owen James working on behalf of J.P. Morgan Asset Management and Invesco Perpetual has produced some excellent research on paraplanners that has enabled a better understanding of their businesses, age demographic and how they work.

Did you know for example that:

  • some 37% of those surveyed influence more than £100m of funds under management
  • some 50% have never met the client
  • that the top 3 most important influencers when selecting funds or outsourced solutions was performance, costs/charges and risk profile

Paraplanners also were keen to see a centralised place to access information on a weekly basis and this has been a key driver toward Panacea Adviser creating a place in the community for them to call home and importantly access timely, relevant, accurate and trusted information from over 70,000 pages on our site.

And importantly for our adviser members, they can now get a better idea of what paraplanners can do for them and to make contact very easily with many of the leading outsource firms via our new Paraplanning zone.


Download the report now for free and let us know your experiences too.



Valentines day, “Hug” a Paraplanner


2013 is now a reality and very recent research is showing us that after getting the exams, many advisers may be taking some time to review their business plan, their business goals and the business’s resource requirements.

This is not a process to rush, but it is a pressing one if the year ahead is to be a success.

Many smaller adviser firms may not fully appreciate that paraplanning, a huge time saving opportunity to embrace, is a vital, yet often confusing part of the business to resource – is it better to outsource or is it better to undertake the function in-house?

Given that there can be as many answers to this question as there are businesses we endeavour to provide you with some factors to consider for your business needs.

1. Do you currently have an in-house paraplanner?

  • Is this working as effectively as you would like?  If so, are you and your paraplanner on the same page when it comes to matching their aims and aspirations with yours?
  • Are they a career paraplanner or likely to want to transition to become an Adviser.
  • What could be improved?
  • Is your paraplanning process as efficient as you would like?  Is the quality up to scratch?  Do you have the time and resources to put into developing and training your paraplanner if this is required?
  • Do you have a solid, quality workflow process?

2. Do you want the additional responsibility of the requirement to manage, train and develop people or is your real passion in networking, business development and managing your ongoing relationship with clients?

3. Is managing your multi skill aspects of the business eating away at your time and energy to do the things you love and want to do?

4. Will freeing up the time you spend doing these tasks enable you to see more clients and generate more income?

5. Is business succession important and do you see the paraplanner being part of that succession plan and if so, does your paraplanner realise this?

6. Are you having trouble hiring a paraplanner?  Are you in a remote location?  Do you have the cash flow to support the level of expertise that you would like?

7. Would you like to partner with an expert in their field who has additional experience and insights that you may not ordinarily consider?

8. When it comes to the costs and cash flow in running the business is it important to you whether costs are fixed or variable?  Would you like costs to fluctuate in line with how the business is going?  Or would you like to know exactly what your costs would be regardless of your level of activity?  Do you have the capital to support – additional technology requirements, hardware, log-ins for software, office space and recruitment fees?

9. How important is it to you to control the paraplanning function?  Do you want to work on the strategy together or do you want to provide the recommendations and get assistance with the technical and compliance requirements in forming a Statement of Advice? Do you wish to have access to a “sounding board” for your strategy and recommendations?

10. How important is it to you that plans are completed within agreed turn-around times? What is your time lag between seeing a client and providing them with a Statement of Advice? Does your outsource provider give a guarantee or are your in-house paraplanners KPI’s aligned to this?

11. Are parts of your advice process heavily segmented with people in your office sure of your expectations of their work and a clear job role?  Or is your business more fluid – with people changing from administrator to paraplanner to client services depending on the needs of the business?

12. Do your staff have the expertise and training required for this?

With staffing costs accounting for over 50% of the total costs for boutique financial planning practices getting the correct mix of resources for your business is critical.

The mix of resources is likely to change over time depending on the requirements and nuances of your business.  So what is the answer for your business?  Pure in-house support?  Partnering with an out-source provider?  Or a combination of the two?

You may wish to start with a discussion with a Paraplanner, to assist in this process we have created a new zone with links to many of the leading outsource firms. Do make contact, it may change your life?

Visit our Paraplanner Zone