Securing the future for paraplanning
Paraplanners are a crucial part of the financial planning industry, ensuring that advisers are properly prepared and informed to help guide clients through a changeable financial landscape.
While processes, challenges, and expectations may shift, our latest research provides reassurance that the future of paraplanners and their role in the financial planning industry remains bright and there are opportunities aplenty. But the industry must not slide into complacency if it wants to remain an attractive career option for the next generation.
Despite a fall, confidence remains high
The overarching data from our latest paraplanner research reveals optimism about the future, but that there is still work to do. Three quarters (75%) of paraplanners are confident about the future of paraplanning in the industry. Though this does represent a fall from 2024 when 90% were confident about the industry.
There’s a significant generational divide, with confidence about the future falling significantly among younger paraplanners. Those aged between 18 and 35, are notably less confident with only 61% confident about the future of the paraplanning industry, with as many as one in five (20%) expressing disagreement with that statement.
Encouragingly, a strong majority (69%) believe that firms value paraplanners more than in the past.
Confidence about the future of paraplanning in the industry
Current and future challenges
Navigating and anticipating an ever evolving landscape is rarely straightforward and a key factor dictating confidence levels is worry about the challenges ahead. Significant regulatory changes, such as the introduction of new IHT legislation or Targeted Support, bring the risk of further burdening paraplanners without clarity on role definitions.
This is perhaps reflected in the fact that almost half of paraplanners (47%) identified increasing regulatory burden and complexity as a concern. Notably, it is of particular concern to those paraplanners operating with smaller AUM (less than £100m). Among this cohort, the figure rises to 54% while older paraplanners, those aged 55+, also place this at the top of their list (58%).
The biggest challenges facing paraplanners
Our research also found that frequent tax and pensions rule changes (44%) are also seen as a key challenge. So too is bringing in new technologies such as AI, platforms, and digital tools (44%).
Margins also weigh on the minds of paraplanners, with a third (33%) identifying pressure on profit margins and cost of delivering advice as one of the biggest challenges the industry faces.
Those with an AUM of less than £100m (39%) and those with one of more than £500m (37%) are both more likely to see this as a challenge.
In addition to the bigger picture elements, there is a demonstrable need to focus on the people experience. Our research revealed recruiting and retaining qualified staff (39%) to be a critical internal challenge – a greater concern for female paraplanners (41%) compared to their male colleagues (36%).
Building the future
What is particularly reassuring is that the workplace remains a supportive environment. A large majority (87%) of paraplanners feel their firms are supportive and female paraplanners overwhelmingly feel support (94%) – in fact more so than their male counterparts (83%).
But retaining people within the industry requires support to be continued and enhanced to ensure that paraplanners are able to continue their work with confidence. Part of that is simply making sure that they have the tools and knowledge to be able to tackle the challenges of the modern landscape, with greater use of technology to improve efficiency (65%) being identified overwhelmingly as the biggest opportunity.
A large majority (87%) of paraplanners feel their firms are supportive and female paraplanners overwhelmingly feel support (94%).
We also found growing demand for intergenerational wealth transfer advice (52%) and increasing demand for holistic financial planning (40%) representing significant market opportunities for firms.
Access to and innovative uses of technology will undoubtedly need to play a key role. And while there are some concerns about its accuracy and data security, just under a quarter (23%) of paraplanners see using AI to enhance communications and planning as a real opportunity.
Recognising and rewarding paraplanners’ contributions more visibly (46%) is the most frequently selected area for improvement, while involving paraplanners more in client discussions and meetings (38%) is another key request.
We also found that offering clearer career development or progression pathways (36%) and providing more training or upskilling opportunities (35%) are highly sought after. Increasing staffing to manage workloads more effectively (32%) is also a significant need.
The immediate lessons
Confidence is strong, but the generational gap that must be addressed to ensure the long-term appeal of the sector – crucial to this is clear progression pathways. Industry, and policymakers, must tackle the triple threat of regulation, technology and margins but within this there is an opportunity to unlock efficiency.
Paraplanners are tasked with taking on the burden of tax and policy changes – changes that have been all too frequent in recent years – and yet most remain positive in face of the challenges presented. While greater consistency would be welcome, upcoming developments, such as Targeted Support, will offer further opportunities for paraplanners to demonstrate their adaptability and resilience.
