Balance complexity with compliance, templates with personalisation, financial literacy with reasonable basis and best interest and time constraints with quality and efficiency.

Here are a few simple tips which can assist in the improvement in the quality of SoAs.

1. Define your audience – the SoA is for the client, however it also needs to take into consideration the other audiences the SoA is being constructed for and reviewed by including the Adviser, the Licensee and ultimately ASIC (compliance). When writing a SOA you need to wear multiple hats to ensure that the SoA delivers the contents required to satisfy each audience. The consideration of each will put a different overlay on the SOA.
2. Make it logical to navigate– the SoA should convey info that the client needs to know in order to make an informed and logical decision. Present strategies in sequential order as they need to be implemented and explain each individual step clearly. 
3. Keep language instructional – The purpose of the SoA is to provide recommendation, therefore language should be instructional with clear steps backed up by explanation of the reasons why the action needs to be taken.
4. Aim for conversational tone – A SoA formally documents recommendations but does not have to be too formal in tone. A conversational approach helps to promote flow and ease readability.
5. Avoid Technical Speak – With over 100 financial planning acronyms commonly used in the industry, it’s easy to appear as though we are speaking another language making it more complex than it needs to be. It is a paraplanner’s job to know these acronyms and then translate this into language that is easy for a client to understand.
6. Keep in mind the client’s financial literacy – all content should be pitched at a client’s existing knowledge level. There is no point getting into the ins and outs of complex strategies within a SOA if the clients do not have the financial literacy to understand it. Similarly, if an Adviser has spent hours previously with your clients discussing the foundations of investing, asset classes, insurance, super and other fundamentals then the language of the SOA should take this into consideration. Where possible try to incorporate by reference the previous discussions.
7. Focus on relevance – Stick to the scope of the advice. Address all elements required but don’t cover items not scoped or it will over complicate the advice.
8. Try graphical representation of Complex Material – A picture paints a thousand words. The use of accurate pictures, diagrams, flowcharts followed by descriptive text can be more enticing to read and easier to understand.
9. Focus on the Purpose – aim for simple and succinct, rather than a lengthy discussion paper. The most important part is that it is logical and conversational. It makes sense, it is pitched at a level that takes into account your previously held discussions.
10. Seek feedback – although often feared, the comments and feedback from compliance can constructively improve the layout and content of a SoA. Ultimately though, we should be seeking feedback from the clients on how they rate the readability and overall presentation of the SoA so if the Adviser is willing, try encouraging them to seek this feedback as it will help you as the paraplanner to create better documents and the Adviser to provide advice to clients in a better way.

Mastering the skills to effectively write a SOA is something which many paraplanners will tell you can only be developed through time and experience. Tools such as financial planning software, templates and standard text libraries will help with the process but really it comes down to a paraplanner’s writing skills and their ability to communicate effectively.

The post 10 tips for developing a Statement of Advice appeared first on AdviserVoice.

Among these changes there are likely to be a number of key elements that will impact paraplanners and the advice process in 2013. Here are my top four predictions:

1. FoFA – Changing the way we provide advice
FoFA is not a change to business practice for many advice businesses – instead it represents the introduction of a formal framework to measure that a client’s best interests have been considered first and foremost. From what I see, the challenge to most advice businesses will be to review the way in which advice is being provided and to consider how best to put processes in place to make it more efficient and less costly whilst also ensuring that all compliance and regulatory requirements are satisfied as “proof” of ethical practice.

An expansion of the availability of low-cost, simple advice through FoFA’s proposed Scaled Advice measures is designed to make advice more affordable for clients and may require a business to look for ways to reduce the costs to deliver that advice.

ASIC have provided examples of approved SOA documents for scaled advice scenarios which are 3-5 pages in total length. This potentially has the biggest and in my opinion perhaps the most positive impact on a paraplanner’s role in that whilst the required length of the SOA documents may reduce, the obligation and onerous to properly research, consider and also demonstrate best interests will still remain.

This has the potential to change the paraplanners job role in that the primary focus may shift from plan writing to that of engaging in better researching, modelling and documenting evidence to substantiate advice and clearly qualify the basis for recommendations.

The new opt in measures and the requirement for advisers to give clients an annual statement outlining the fees charged and services provided in the previous 12 months, may result in the need for higher levels of ongoing service and more regular contact with clients in order to demonstrate the value of the services being provided.

Paraplanners are likely to play an important role in the review and redesign of service packages and provision of ongoing support. Businesses will need to focus on developing cost-effective measures to add value and engage with clients on a regular basis. Going forward, social media, phone and skype hook-ups, newsletters, webinars as well as formal meetings and review documents are all likely to have a place in a client’s service offering package.

2. FOFA – Broadening the work options for paraplanners through the introduction of licensing requirements for accountants and other professionals
The removal of the accountants’ exemption for providing SMSF advice from 1 July 2016 (following a 3 year transition period commencing 1 July 2013) could potentially see up to 10,000 accountants required to obtain a limited Australian Financial Services License in order to be able to continue to provide advice on SMSFs. This licence would enable them to provide SMSF advice with much broader scope than they do now.

From a paraplanner’s perspective, the licensing of Accountants may create job opportunities, with paraplanners potentially having the opportunity to work along-side accounting professionals to prepare advice documents. Paraplanners, being the technical / compliance specialists in the practice may also be able to assist accountants with the transition to a new licensing and compliance regime.

This may result in a move away from a “generalist” paraplanner to more specialist paraplanning positions such as SMSF Specialist Paraplanner etc. It could also see the emergence of a new wave of paraplanning professionals with a background in accounting or alternatively, the acquisition of accounting skills by existing paraplanners.

3. Increasing professionalism – through social media and networking
Social media provides a fantastic medium to keep abreast of changing technical and legislative news . As paraplanners embrace professional social media channels such as LinkedIn and Twitter, the level of information available increases and so too the opportunity for paraplanners to engage with and learn from other professionals.

Increasing popularity of the AFA GenXT programs and LinkedIn groups such as Paraplanning Network Australia will also provide Paraplanners with an environment to openly connect, communicate and share knowledge, ideas and skills to assist in their development, collectively enhancing professionalism in the industry and ultimately the end advice and service that clients receive.

4. Tailored Training Solutions – the emergence of training to specifically support paraplanners
An article in Money Management magazine last year intimated that there is currently a shortage of skills in the industry. Put the question to most paraplanners and it’s evident that the industry lacks formal practical training solutions, mentoring relationships and peer-to-peer learning opportunities.

2013 will see the release of specialist training courses and practical delivery methods which focus on the acquisition of ‘real world’ experience for newly graduated job-seekers, new entrants to the paraplanning profession and for those in other support staff roles looking to move to paraplanning.

All in all, it’s shaping up to be a very interesting year for paraplanners and other financial planning professionals. With change comes opportunity and I am excited and interested to see how 2013 will evolve and how the paraplanning industry will adapt.

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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.

The post Paraplanning – How to get outsourcing to work for your business appeared first on AdviserVoice.

Paraplanning 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 are as many answers to this question as there are businesses we endeavour to provide you with some factors to consider when answering this question for your business.

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 their career goals and your business goals?  Are they a career paraplanner or likely to want to transition to become an Adviser. What could be improved? 

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?  Is managing the people aspects of the business eating away at your time and energy to do the things you love and want to do? Will freeing up the time you spend doing these tasks enable you to see more clients and generate more business?

3. Is business succession important and do you see the paraplanner being part of that succession plan?  Does the paraplanner realise this? 

4. 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? 

5. 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?

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

7. 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 will 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?

8. 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?

9. 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?

10. Do you have a solid, quality work flow process?  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?  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. 

This 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?

The post 10 steps to find the right paraplanning mix for your business appeared first on AdviserVoice.

It’s like asking “how long is a piece of string?” without ever having seen the piece of string and unfortunately can show a lack of understanding by the adviser on the behind the scenes advice process. Similarly, a simple answer of “about 4 hours” by a paraplanner in an interview can show a lack of understanding of the various factors that go into the preparation and completion of a Statement of Advice.

To answer this question, we asked the members of Paraplanning Network Australia for their insights into “the key factors that impact the time it takes to generate Statements of Advice,”  Some of these insights follow:

1. It’s all about the integrity and completeness of data – a fully completed fact find is a good place to start, but often additional information is required when it comes to research and developing recommendations for a SOA. Having a checklist to ensure you have all necessary information, obtaining an Authority to Access Information and asking clients for current investment, loan, insurance and super statements from the outset can all help to speed up the paraplanning process. 

It’s also important to consider who is responsible for obtaining any required information and consider what their workload is. How long will the task sit in their “to do” pile and add to SoA turn-around time?

2. Am I making myself clear? – Noreen Les, Senior Paraplanner at Circle Paraplanning Services  says “One of the main factors for me is the quality of advice notes and documents provided by the adviser, i.e. the level of detail they provide and the personalisation, specific to client goals and why the advice is being provided to address those goals.”

To build a strong reasonable basis and create a more personalised Statement of Advice, the adviser can assist the paraplanner greatly by providing clear and concise instructions outlining discussions with the client; their specific goals and objectives.

3. Relationship is the key – it’s important that the paraplanner understands the adviser’s preferences for style and tone of advice.

“This includes how to interpret what an adviser is saying and writing/developing these into legible recommendations in a compliant SoA… if you don’t have a good understanding with the planner, there can be a lot of time spent making changes and updates to the SoA, even doubling the time spent sometimes.” – Lindsay Ross, paraplanner and owner at Wealth Leaders Pty Ltd.

Customising standard text can be a worthwhile exercise to reduce the time spent re-writing text that the paraplanner has written.

4. Templates, templates, templates! We all know the benefits of having templates in place, however if these haven’t been reviewed for some time then these can often become more of a hindrance than help to a paraplanner, with considerable time wasted editing and re-formatting a document.

“The more complex the plan the greater the need to stray from standard text and the need to develop own wording. This can take extra time if the adviser does not concur with the style that this has been written by the paraplanner,” says Quinton Sosnowski, Technical Specialist at Managed Financial Strategy.

5. It’s complicated! – The more complex the strategy, the more time spent by the paraplanner on researching the technical aspects, legislation, ramifications and compliance requirements and analysing the cost benefit of particular strategies. In situations where multiple scenarios are considered, this then further increases the preparation work for a SOA undertaken by the paraplanner.

To assist your paraplanner with this process, ensure that you are utilising the resources available to you, are you sharing these with the paraplanner? Does the paraplanner have access to the support services of a technical team to assist in the strategy development, or have similar strategies been recommended in the past, especially where you have been comfortable with the way the strategy was presented and explained in the SoA? Assisting the paraplanner in these ways can cut down the time it takes to develop complex advice documents.

6. Have you ever considered modelling? – Projections are an integral part of the paraplanning process. If a paraplanner is not confident with the calculator or software then errors are easily made and time is easily wasted. The key to a paraplanner being able to complete modelling efficiently is mostly in the accuracy and level of data provided and how confident they are using the calculator or tool.

One tip to make the process simpler is to provide a list of default strategy, investment return and general assumptions to be used for all projections. This helps to build consistency in your projections, reduce errors and more easier identify where data has been incorrectly input.

7. How about the software? – A paraplanners lack of experience or familiarity with financial planning software can double the generation time of a SoA.  “Financial Planning software is really a paraplanners domain. They’re going to use it more than any other employee,” says Dave Perry – Director at Accurate Admin Solutions Pty Ltd.

“I think one of the biggest factors in determining the time it takes to prepare advice is how good the templates are and your ability to “feed” data into them. If they are not particularly well designed and linked to the data sections within the paraplanning tools, you spend a great deal of time editing SOA’s,” says Noreen Les.

It’s vital that your paraplanner keeps up to date with upgrades and changes to the financial planning software and that they are provided an opportunity to attend additional training to up-skill and speed up the time it takes to use the tools, modelling and template wizards.

At the end of the day, there is no one size fits all when it comes to the time it takes in preparing Statements of Advice but there are many factor that impact on timely preparation. Identifying the part in the advice process where the time lag occurs, fostering better communication with your paraplanner and reviewing your templates and standard text could all help to streamline the process, reduce turnaround time and assist in building a better quality Statement of Advice.

The post How long does it take to write a Statement of Advice appeared first on AdviserVoice.

The Collins English Dictionary defines a paraplanner as “a person who assists a financial planner, especially in compiling reports and conducting research.”

While the core of the paraplanning role is to compile reports and conduct research there are many different types of paraplanner.  Understanding this can assist you with finding the right paraplanner for your business.

Most paraplanners in the industry work in one of the following models:

• As part of a centralised paraplanning team – this model is often employed by many major banks / dealer groups and super funds
• Alongside a number of paraplanners in a mid-sized boutique financial planning firm
• As the sole paraplanner in a boutique financial planning practice
• In a self employed / contract paraplanner capacity (often an outsourced paraplanning business)

Other duties that are often incorporated with different paraplanning roles include:

• Administration – paraplanners in smaller businesses often get involved in administration and paperwork aspects from ensuring that compliance documentation is filed correctly to preparing paperwork and implementing recommendations.  A role which incorporates administration elements can give a paraplanner a hands on understanding of the practicalities of the financial planning role and can be especially useful for those starting out in the industry and those wanting to become financial planners.
• Client Service – meeting with clients – some paraplanning roles incorporate a mix of meeting and liaising with clients as well as paraplanning.  This is common for Associate Financial Advisers who gain experience in formulating and constructing advice through paraplanning and experience in connecting and relating with clients through client service responsibilities.
• Compliance / Technical aspects – as the role of a paraplanner incorporates compliance and technical aspects, over time paraplanners can become experts in a compliance / technical field.  Many paraplanning professionals become compliance / technical experts within their business or within a dealer group / financial institution where they are called upon by financial advisers, practice managers and product providers to provide insight and expertise.
• Practice / Paraplanning Management – depending on the size of the business and the seniority of the paraplanner, management of the practice / paraplanning team may also be incorporated into a paraplanning role.  Some practices run a system where Senior Paraplanners are involved heavily in complex advice work and oversee the work of Junior Paraplanners.  Many large centralised paraplanning teams employ Paraplanning / Operations Managers to oversee teams of paraplanners, liaise with other corporate business units and manage workflow.
• Financial Planner – some financial planners are involved in doing their own paraplanning.  This is often a common starting point for Financial Planners in smaller practices who meet clients, write Statements of Advice and implement the advice themselves.

Although, a quick look at seek.com.au will show you that there are many different types of paraplanner, there are some key skills common to all paraplanning professionals including the ability to:

• Construct / formulate / understand advice documents (namely Statements of Advice – SoAs and Records of Advice – RoAs)
• Document and write reports
• Research and analyse / interpret facts and figures
• Understand the financial planning compliance framework
• Manage time effectively
• Communicate effectively (both in writing and verbally)
• Use software and employ IT related skills – as a lot of paraplanning professionals are required to use financial planning and other software.

Our articles will focus on how you can identify and attract the right paraplanning staff or outsourced paraplanning solution to fit your business. We will also be taking a closer look into how best to structure remuneration, set KPIs and establish professional development plans for your staff to enhance their development and encourage staff retention and loyalty.

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