Paraplanning – How to get outsourcing to work for your business

From

As the number of outsourced paraplanning service providers in the market increases, so too do the options available to Financial Planning businesses to find a solution that works best for their business.

It would be fair to say that many businesses who are looking to outsource may be doing so purely on the basis of benefiting from the cost savings that can be achieved by not having fixed overheads for staffing costs. There tends to be little to no discussion on the other value-adds that are provided by the outsourcing function, of which there are many.

For those businesses currently considering using or even those businesses that are currently using an outsourced paraplanning service there are ways to ensure that an outsourcing arrangement works most effectively for your business. These include:

1. Work out the level of support that you require
There is common misconception that to use an outsourced paraplanning service, or for this arrangement to be effective, it must be on a full-time basis. Contrary to this belief there are actually many ways that a business can make outsourcing work for them. These include:

  • Employing an outsourced paraplanning service as a replacement to an in-house staff member
  • Contracting an outsourced paraplanning service to produce the complex and technical advice documents, electing to keep the simpler SOA preparation function in-house.
  • Utilising an outsourced paraplanning service to manage overflow periods or when staff are sick or on leave.
  • Engaging with an outsourced paraplanning service and having them complete a range of SoAs covering various advice scenarios and using these as reference and training tools for staff.

There are certain benefits associated with consistent and frequent use of an outsourced paraplanning service in that the greater the volume of work completed, the easier it is for them to adapt to your style and generally the quicker they can turn-around your advice requests. But experienced outsourced paraplanning service providers should also be able to complete ad-hoc SoA requests just as efficiently.

2. Spend the time at the start to get things right
Some advisers we speak with seem disenchanted with outsourced paraplanning services as they say that it is more time consuming for them to check the advice and amend it than it would be if they were to have done the SoA themselves. This complaint raises concern as it suggests that the outsourced paraplanning service hasn’t spent enough time at the outset of the relationship to get to know the specific business and familiarise themselves with the individual process and style of advice.

Although paraplanning support can be set up fairly instantly, for the relationship to be long lasting and mutually beneficial then it is imperative that both parties spend time initially to understand the individual business process. The paraplanning company should request and review recent SoAs, templates, compliance guides and licensee requirements and they should also be going through the format and your preferences with you.

3. Integrate the outsourced paraplanning service provider as part of your team
Even though the outsourced paraplanning service provider will not be physically located in your office, it still pays to think of and include them as part of your team.

Whether located in-house or externally, it is necessary to communicate with a paraplanner on all updates to your business including guidance from your licensee / dealer group, template changes, changes to your APL as well as sharing with them updates from BDMs and relevant financial planning updates that you read or receive via email. Promoting this level of interaction will help foster a stronger relationship and assist them to better understand your business.

Key Tip – Why not arrange for the outsourced paraplanning service provider to sit in on your next compliance audit / review.  Or alternatively, sit with them to review the report you receive and to create an action plan to address points raised.  You may also wish to invite them to attend with you, your training and PD days and even attend your staff Christmas party or end of financial year celebrations.

Equally important is the need to provide feedback to assist the paraplanner to learn processes quicker and adapt to the preferred style. A new employee (whether internal or external) is not going to get a SOA 100% perfect to the dealers requirements the first time, so feedback is an integral part of assisting to streamline the process.

The most effective relationships are ones where the adviser and outsourced paraplanning service provider hold regular meetings. If located in different geographical locations then why not consider using video teleconference such as Skype and asking key staff to attend. This can help to foster better relationships as you can physically see the people that you email and speak to on a regular basis.

4. Review your Existing Processes & Templates
As a general rule, outsourcing solutions work best when partnering with practices that have a clearly defined process, integrated with efficient use of a CRM (doesn’t matter which one) and are in the practice of keeping good file notes.
Not having efficient templates, standard text or clear processes will often mean there is much more time wasted chasing information and seeking clarification from the adviser. Additionally the potential for errors and mistakes can increase due to the requirement by the paraplanner to double enter client information and complete projections and calculations manually.

A good outsourced paraplanning service provider can help you at the outset to design or rework templates with your licensee requirements in mind, create standard advice documents and text and create efficiencies in your work processes.

Key tip – Remember the more info and level of detail you provide a paraplanner, the more personalised and comprehensive the SOA that can be developed.

Outsourced paraplanning service providers are specialists in creating Statements of Advice and work with many different dealer groups and advice practices. Although constrained by privacy and confidentiality agreements between parties, they can still provide an overview on the many ways that a business’ advice documents can be improved. Suggestions may include enhancements to layout design and the use of bullet points, flowcharts, diagrams and other schematics to assist you to more clearly explain your advice and engage your clients.

Key Tip – Why not have an outsourced paraplanning service provider critically analyse your templates and suggest improvements?

5. Review the service on a regular basis
As with the service offering that advisers provide their clients, an important step in establishing an effective relationship with an outsourced paraplanning service provider is to regularly review the service to evaluate the performance and to identify and discuss the areas where improvements to the process could be achieved.

Remember that the service is a partnership and it is of best interest to bath parties to establish a process that is as efficient and streamlined as possible. Regular changes may be required internally to ensure that the paraplanners are getting the level of information and guidance that they require and externally to ensure that expectations of the service and turn-around times continue to be met.

Key tip – You may wish to schedule reviews with your outsourced paraplanning service provider during quieter business periods or after key business events such as when updates to licensee provided templates are released, following a compliance review or when staff join or leave the business.

5. Engage the Outsource Paraplanning Service to provide training to internal staff
If you think that your paraplanners and support staff could benefit with some additional training and support and if you do not have the time to provide this yourself, one option is to employ an outsourced paraplanning service provider to provide tailored training solutions for new and existing staff members.

Some firms currently offer general and tailored training and development programs in arrears such as paraplanning induction training, SOA production and efficiency tips, time and workflow management, research and analysis skills and financial planning projection tools and SOA wizards.

Key Tip – Why not tap into the expertise and experience of an outsourced paraplanning service to provide tailored training and ongoing development to your internal staff?

The benefits of an effective outsourced paraplanning service should not be determined based on cost benefits alone. There are many ways to integrate an outsourced paraplanning service provider into your business and benefit from increased efficiencies across the business.

Not all outsourced paraplanning services are the same. It pays to ask for referrals and seek references from current clients of the outsourced paraplanning service provider. Financial Planning businesses should also look for a service with a high level of experience, flexibility, reputation and capacity to meet your needs and remember that a good paraplanning service will be able to tailor their support to your individual business needs.

You must be logged in to post or view comments.