A number of professions recognize the role of that supportive personnel trained in specified ways play in their work. Among the best known examples are paralegals and paramedics. Financial planners also have such a designation and it’s called “paraplanner.” Such a professional handles administrative, accounting and other support tasks for a financial advisor. Consider working with a financial planner to develop an investment strategy and estate plan.
Paraplanner Duties
In practice, an individual paraplanner’s duties may vary considerably. Some paraplanners, especially those who are just starting out, function primarily as administrative assistants to a financial planner or advisor. These paraplanners may spend some or all of their time on critical administrative tasks such as filing, data entry and managing a financial planner’s schedule.
Other paraplanners with more experience and training may fulfill a significant portion of the duties that a financial planner would normally complete. These may include analyzing financial statements, taking notes during client meetings, updating client records and performing projections.
Paraplanners vs. Financial Planners
The main difference between a paraplanner and a financial advisor is that the paraplanner’s work doesn’t involve providing direct advice to clients. The paraplanner’s support frees up the financial advisors to focus attention on client-facing duties.
Usually a paraplanner will have at least some background in finance or accounting, such as a bachelor’s degree in finance. However, they typically do not have advanced degrees or certifications like CFAs or CFPs, as many financial advisors do.
Paraplanners may be workers who have gained general administrative experience at financial planning firms and want to advance by becoming more involved in the planning process. A paraplanner role would allow them to achieve these goals without becoming advisors themselves.
Paraplanners are members of the financial planning team. They may do most tasks connected with the financial planning service. The exception, however, is that they don’t usually take the lead on client relationships.
Paraplanner Qualifications
Working as a paraplanner requires excellent organizational skills and attention to detail. Training or background in accounting, bookkeeping or finance – or all three – is often essential. Generally a paraplanner will have a bachelor’s degree in accounting or finance, and many job postings will list that as a requirement for the role.
Paraplanners should be adept at taking notes during presentations or meetings. They should also be skilled at conducting research, analyzing statistics and writing reports. They are likely to need well-honed skills with information technology, especially financial planning and client billing software.
Paraplanners should understand legal and compliance issues related to working in the financial services and investment advice field. A good paraplanner will also have the ability to interact with clients in some situations, though it likely won’t be their main focus.
Paraplanner Certification
While full-fledged financial planners often have at least one certification or designation, paraplanners rarely have such formal certifications. One exception is the Foundations in Financial Planning program offered by the College for Financial Planning (CFFP). Those who complete the program successfully become eligible for a certificate as a Financial Paraplanner Qualified Professional (FPQP).
The course is an introduction to financial planning. It’s described as providing practical information about the basics. It’s suitable for people who have no prior experience in the field or who work in support roles in financial planning.
The FPQP certificate training covers what the College for Financial Planning calls the five disciplines of financial planning: insurance, investments, retirement, tax and estate. The material takes about 80 to 120 hours of self-paced study to cover. Students must complete the course within one year.
The course costs $1,300. The College for Financial Planning says graduates can expect to earn $41,921 working as paraplanners after receiving the FPQP certificate. That compares to $39,249 for people in similar positions without the certificate.
FPQP certificate holders need to refresh their knowledge of their fields to keep their designation. The CFFP requires certificate holders to complete 16 hours of continuing education every two years. Additionally, it expects that all paraplanners with an FPQP credential follow standards of professional conduct and comply with self-disclosure requirements.
Note that the College for Financial Planning previously offered a Registered Paraplanner (RP) designation, but it no longer does so.
Finding Someone to Help With Your Financial Plan
Paraplanners support the work of financial advisors, generally at a registered investment advisor (RIA) firm. If you’re looking for professional help from an advisor, you can start by using this free financial advisor matching tool. Just answer some questions about your financial situation and goals and the tool will match you with up to three advisors in your area.
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