Paraplanners take issue with advice

According to a new report compiled by Paraplanner Hub and Tanngo, and based on a survey of some 1,700 paraplanners, paraplanners are increasingly shunning advice.

Namely, while in 2021, 72 per cent of paraplanners said they didn’t want to be advisers; a year later, as many as 80 per cent of paraplanners decided advising was not for them.

Conversely, the research showed that paraplanning remained the career choice for as many as 75 per cent of paraplanners.

Commenting on these findings, Melanie Drago, administrator at Paraplanner Hub and founder of Tanngo, said the stringent education standards in the advice industry were a deterrent for many paraplanners.

“This year, I asked ‘Why don’t you want to do advising?’ And there were striking similarities in the responses, with common themes that paraplanners don’t want to be in a client-facing or sales role, prefer technical and number crunching, and enjoy the work/life balance paraplanning brings,” Ms Drago said.

“There were also a few callouts on the need for additional education, which they don’t want to do at this late stage in their career”.

The report also raised concerns regarding the next generation of both paraplanners and advisers.

“With both adviser and paraplanner numbers dwindling, the survey results still don’t provide too much comfort on where the next generation paraplanners are coming from with over 97 per cent aged over 25 — more must be done to attract, educate and train new entrants,” Ms Drago opined.

Moreover, the report delved into whether paraplanners need to be “properly qualified” and registered on ASIC’s Financial Advice Register (FAR).

Ms Drago noted that “given that most paraplanners do not want to become advisers, it makes sense that they have not registered themselves” on the FAR.

According to the report, the number of paraplanners registered has dropped from 21 per cent in 2021 to only 12 per cent last year.

However, Ms Drago revealed that as many as 75 per cent of paraplanners would like to see a professional education standard mandated, while 88 per cent think that they should be required to maintain a level of ongoing professional development/education.

“Ongoing professional development offerings for paraplanners are limited — most courses and training options are steered towards the adviser. We strongly believe the industry needs to develop ongoing training content that is affordable, accessible and relevant for paraplanners and possibly support staff,” she concluded.