How to build a productive and profitable relationship with an outsourced paraplanner

When asked - "what is your biggest frustration right now when it comes to paraplanning?" Here's what XY Advisers said:

  • "Time taken to really create a customised and succinct SOA."
  • "Consistency in quality when outsourced."
  • "Finding someone to do it quicker/similar quality than I can do myself."
  • "Quality and lack of attention to detail in projections."

According to Hayley Knight, these are common frustrations for advisers. If you were nodding your head reading the list above, you're not alone.

In last week's XY+ web event, Hayley took us through the top four mistakes advisers should be avoiding when looking to set up a successful outsourced paraplanning relationship.

Before we jump into the mistakes (and how to counteract them), here's what a productive and profitable relationship with an outsourced paraplanner looks like. They take the mountain of work off your desk, they can help with strategies and can help with ad-hoc data entry tasks so you can focus getting in front of your clients, growing your business and even take some time off (now wouldn't that be nice?!).

Mistake #1 - Being unclear about what you actually need

It's easy to think about what you don't want in an outsourced planner - 'I don't want crappy quality, I don't want a plan to take too long to complete, [insert other I-don't-want's here]'. It's a lot harder to think about (and clearly articulate) what you actually want, and most advisers Hayley speaks to admit they're not even sure where to start with this. Here's what you need to clarify before finding the right outsourcing partner:

→ Understanding your volume -an adviser looking for two plans a month will have completely different requirements to someone needing 5-10 SOA's a month.

→ Understanding your systems - get clear on how your SOA's are produced.

→ Know your budget (Hayley gives price ranges for onshore and offshore paraplanning and for different types of plans in the web event replay).

→ Licensee requirements - Does your licensee have any restrictions on the type of outsourcing model or location you can use for a paraplanner?

Mistake #2 - Selecting the wrong outsourcing modelEnter the FPA.

Ten years ago there was only a handful of outsourcing providers. Now, there's so many different models and so many different providers. Let's breakdown the different outsourcing models:

The sole-trader

Also known as a direct contractor who wears all the hats. Pro's include - they're typically really good paraplanners and produce great quality plans. They are good at building direct relationships with advisers. Con's to consider - they have limited capacity as the sole producer of SOA's and they may not have a back up paraplanner if they are unwell or away on holidays.

Sub-contractor - pooled

This is a team of paraplanners where all plan requests drop into a big pool and are picked up by the next available paraplanner. They're very good at getting work done quickly, and perfect for low complexity, high-volume work. To use one of these models effectively you need to have a pretty solid system in your office. It may not always be the same person writing your plans, so they need to be able to pick up your process quickly.

Sub-contractor - delegated model

This is a team of paraplanners who each work with their own advisers. This is how Hayley structures her team at Contract Paraplanning Services and prefers this model as each adviser works with their own dedicated paraplanner and is able to build a strong working relationship with them. In this type of model, the paraplanner gets to know you and your business intimately, and there's also the option to take on complimentary services, like ad-hoc data entry for example.

Licensee outsourcing

This is where a licensee might have an internal salaried paraplanning team, or contract out to a pooled sub-contractor provider. The obvious pro here is the paraplanners are great at understanding that specific licensee's requirements because that is all they do. Something to be mindful of is timeframes can blow our when it gets super busy, like EOFY for example. 

Mistake #3 - Not putting your paraplanner through the right filtering process

Once you've gotten clear on what you want from an outsourced paraplanner, you've decided on the paraplanning model which best suits your business and you've narrowed your choice down to three people from three different providers - the important stuff begins. You need to treat this part of the process with the same gravity as if you were hiring someone to join your internal team. Here's a few things to consider in the filtering process:

Software capabilities - it's important to find a paraplanner who is familiar with your software. If your new paraplanner needs to learn a new CRM and a new SOA process, it's going to take too long to get to that point of seeing the fruits of your labour.

Strategy - When you are looking for a paraplanner, make sure they are competent in the types of strategies you build for your clients. If they don't have the right technical knowledge, they will find it harder to explain it in an SOA to your client. This is a typical scenario where advisers end up doing a lot of customisation of the plan themselves. This isn't an efficient use of anyone's time.

Involvement - Ask your paraplanner how much involvement they have in the process? Some advisers like to have Zoom meetings or phone calls to discuss. Some like to have really detailed modelling or have a technical vetting done by the paraplanner. If some of these things are important to you, ask them if they offer this because some services are just limited to the SOA, while some extend to any customisation you want.

Mistake #4 - Not setting your paraplanner up for success

Just like onboarding a new employee to your business, there's a few key areas to get right to ensure you are setting your new paraplanner up for success.

Agree to clear deadlines - when you do this well from the outset, everyone is on the same page and no one is going to get frustrated looking or waiting for something.

Document your process - this comes back to mistake #1, understanding your high level process. Bullet points should be fine ie. we click on this, we choose that, we merge this into that etc.

Style guides - Are like reference guides for the paraplanner and should include things like formatting, texts, tables, assumptions, branding, and the modelling graphs you like to use. This will be an evolving document as your guidelines change over time.

Training videos - This could be short loom videos explaining your process, or you could spend 30 minutes recording a Zoom session with your paraplanner walking them through the process, so they can come back to the video if/when they need to.

Templates / Logins / SOA examples - Provide all the relevant logins and templates your paraplanner will need. Most important is giving them some really good SOA examples. A draft SOA often looks quite different to the finished product, so giving them an idea of what the final SOA should look like helps a lot.

Let's recap...

First, you need to know what you want. Take your time finding the right outsourcing model because it may make or break the relationship filter. Take your shortlist through an interview process and really question and understand how they're going to form part of your team. Finally, give them all of the resources they need, with the right training to set them up for success and you'll be well on your way to building a productive and profitable relationship with an outsourced paraplanner.