What are the benefits of using a contract paraplanner?

With the dramatic rise in acceptance of outsourcing as a viable alternative to hiring on-site employee, we'll take at look at the benefits that outsourcing provides your business.

Cost Savings - An Example
In order to consider the cost savings for your business, we will have a look at a typical scenario that we encounter.

Tom is an adviser in Sydney who works in partnership with one other adviser. They have hired one full-time administration staff member and are deciding whether to hire a paraplanner or consider an outsourced paraplanner for the role. Their only other point of reference when considering freelance paraplanning is a colleague who had tried hiring a local trainee paraplanner to "work part-time, after hours on his plans". The experience was terrible as the trainee, although charging a low hourly rate, would often send Statement of Advice documents back half-completed & several days late.

When looking at the typical paraplanner salary, they saw that they would need to offer a salary of $70,000 per annum in order to ensure they hired a paraplanner with relevant experience. When factoring in superannuation, sick leave & holiday entitlements, ongoing paraplanner training costs, software license costs, office furniture etc, they were looking at an additional 25% cost, bringing the total cost for an in-house paraplanner to $87,500 per annum (or $7,290 per month).

Let's now compare this cost to that of a contract paraplanner for this Sydney adviser. You will need to keep in mind the following tasks that an outsourced paraplanner cannot perform:

• Answering office phone calls
• Following up on client applications
• Preparation tasks for client meetings
• Sitting in on team meetings
• Printing and binding SoA documents

Although the above tasks cannot be performed by an outsourced paraplanner, we have seen many examples of offices that have their staff structured to ensure these tasks are performed at a lower cost.

For the cost of paraplanning using a contract paraplanner, we will assume the following about Tom and his partner:

• They have a total of 3 client meetings each from Monday to Thursday with Friday being an office day.
• From these 24 meetings, there are 8 new clients and 50% would like to proceed with a Statement of Advice document.

Based on the above assumptions, the cost for four SoAs per week, at a cost of $297 per SoA, would cost $1,188 per week. This would equate to $57,024 per annum for a contract paraplanner (based on 48 weeks as you would not need to pay your outsourced paraplanner whilst you are on holiday), with a potential cost saving of over 30% per annum.


Flexibility & Scalability
The biggest problem that we hear from advisers is what to do when they need 1.5 paraplanners or 0.5 paraplanners. You may not need to take on another full-time employee but your choices would be:

• As an adviser completing SoAs - continue to be spending more and more hours each week learning software, reviewing updates, writing SoAs, updating templates etc
• As an adviser who already has a paraplanner - continue to give more work to your current paraplanner and hope that they will handle the pressure and stay in your business until you hire a full-time paraplanner
• Hire a part-time staff member

All of the above options are valid and are in place with many financial planning practices in Australia but they don't give you the flexibility and scalability that you need.

Contract paraplanning provides the following advantages in terms of flexibility and scalability:

• No ongoing contracts - you have the option to stop using your outsourced paraplanner tomorrow. If you are on holidays, off sick or have a quiet month, your bank balance won't know the difference.
• No staffing issues - dealing with staff holidays, sick leave, annual leave and conflict can be tough and using an outsourced paraplanning service ensures that your paraplanner works hard to accommodate your needs, not the other way around.
• Overflow service - if your business has run a successful marketing campaign or had a wave of client referrals all at the same time, you will know the delight and anxiety that comes from a surge of Statement of Advice documents to complete. Rather than letting your financial planning leads grow cold, you can choose to utilise your outsourced paraplanner to help you at times when you have a high volume of work.
• Temporary paraplanning solution - you may decide that you would love to have an in-house paraplanner as you'd like to train them to become an adviser. Great! The only problem may be that your ideal paraplanner takes awhile to be found in your area. Over the years, we have provided many paraplanners to advice groups as a temporary solution while they interview candidates and ensure a right fit for their future adviser.
• Scalable workforce - rather than go through the effort of running ads, interviewing candidates etc when you're busy and growing your business, contract paraplanning through Paraplanner.com.au give you a flexible system that can grow as your business grows.