From CEOpedia | Management online

Paraplanning means fulfilling the administrative duties of a financial planning. Thanks to paraplanning, financial planners can focus more on cooperating with the customer and identifying his investment needs [1].

Paraplanner is an employee of the financial services industry, who creates and prepares documents, statements, financial models and other documents related to financial planning [2].

"A para-planner is someone who sits behind the scenes, taking the raw material and ideas that a financial planner gets from working with a client and then analysing them, modelling them and deciding if they are going to work or not. They then look at the universe of investments, find some that match the outcomes required and document all of this for the financial planner (who then, as the joke goes, takes all the credit)"[3].

Paraplanning workers fill the gaps between financial planners and the administration because they have the capacity and competence that goes beyond the scope of the administrative staff. Paraplanner activities are also often complementary to the work of the Relationship Manager and Management Advisor. The team composed of these specialists is able to provide comprehensive services to up to 100 clients with high net worth[4].

Paraplanners usually have no contact with the client or it is very inconsiderable. Their task is to create plans and perform the tasks entrusted to them by the financial planner. They can also work with financial planning software or settle accounts with clients. In relation to them, financial plans are regularly updated along with the changing situation of the client, thanks to which they can also create forecasts and reports. They often appear at meetings with clients to create notes and deal with the administration[5].

Requirements to become a paraplanner

A person trying to get a job as a paraplanner should have a license and financial training. The more an employee is involved in the financial planning process, the more emphasis is placed on licensing or authorizing[6].

More experienced paraplanners, especially those with a license for securities, may already directly cooperate with clients, enter their data into programs, and help in organizing meetings. There are two practices, one of which foresees for the paraplanners their own individual career path, in the second the paraplanners position precedes the position of the financial planner. Many good financial specialists cannot imagine not having at least one paraplanner in their company, they are increasingly becoming the key to success[7].

A type of paraplanner is contract paraplanner - an individual that works on variable contract. Usually paraplanners work on full-time salary, as it is cheaper and less risky for the company.

In-house and outsourced paraplanning

In addition to in-house paraplanning that allows you to pick out from the company's employees with predispositions to the paraplanner (which is much safer in terms of sensitive data leaks outside the company), there is also an outsourced paraplanning option in situations when the company can not afford to hire a qualified employee. As Marci Bair, CFP of Bair Financial Planning says: "it makes a lot of sense for a planner to outsource functions that aren't part of his or her core strengths to a paraplanner. "Think about what your time is worth—I would venture to say that in most cases your time is worth more than it would cost to hire someone to do the job""[8].

Examples of Paraplanner tasks

Steve Moore mentions such exemplary tasks in his book[9]:

  • Perform data entry in planning tool,
  • Handle with paperwork,
  • Performance reporting,
  • Perform data documentation,
  • Maintaining client files and requests,
  • Appointment scheduling,
  • Prepare reviews end reports,
  • Vendor management.

Advantages of Paraplanning

Paraplanning provides numerous advantages for financial planners and their customers. The most important benefits are as follows:

  • It streamlines the financial planning process and makes it more efficient. Paraplanning eliminates the need for manual tasks, such as data entry and report generation, and automates routine tasks, such as portfolio reviews. This allows financial planners to focus more on their clients’ needs.
  • It enables financial planners to provide higher quality advice. Paraplanning allows financial planners to quickly access and analyse large amounts of data, enabling them to provide more accurate advice and make more informed decisions.
  • It increases accuracy and reduces errors. Paraplanning eliminates the risk of human error and ensures accuracy in calculations, as well as consistency in the advice provided.
  • It helps to ensure compliance with regulatory requirements. Paraplanning enables financial planners to easily track and monitor their clients’ investments, ensuring they are in compliance with regulatory requirements.
  • It helps to improve customer service. Paraplanning allows financial planners to quickly access and analyze data about their clients’ portfolios. This allows them to provide more personalized advice and better service to their clients.

Limitations of Paraplanning

Paraplanning is an important part of financial planning, but it has its limitations. These include:

  • Not having direct contact with clients - Although paraplanning plays an important role in the financial planning process, it does not involve any direct contact with clients. This means that paraplanners can't provide advice on financial products or strategies and must rely on the financial planner for guidance.
  • Lack of technical knowledge - Paraplanning can often be quite technical and requires a certain level of knowledge. This can make it difficult for paraplanners to understand the technical aspects of the financial planning process and, in turn, create problems for the financial planner.
  • Limited ability to provide creative solutions - Paraplanners are often limited in their ability to provide creative solutions to complex financial planning problems due to their lack of direct contact with clients and technical knowledge.
  • Limited ability to identify potential risks - As paraplanners are not directly involved in the client-planner relationship, they may not be able to identify potential risks that the financial planner should be aware of.
  • Increased workload - As paraplanning is a very time-consuming process, it can result in an increased workload for the financial planner, which can lead to burnout and frustration.

Other approaches related to Paraplanning

Paraplanning is a crucial part of financial planning that enables planners to focus on providing advice and services to their clientele. Other approaches related to paraplanning include:

  • Investment Analysis: This approach involves researching and evaluating different investments to determine their potential performance, risk and return. It also involves assessing the impact of market changes on investments.
  • Risk Management: This approach involves the careful assessment of a client's financial goals and the potential risks associated with them. It involves developing strategies to minimize risks and maximize returns.
  • Financial Statement Analysis: This approach involves analyzing financial statements to determine the overall financial health of a client. It also involves looking for potential investments that can help improve the client's financial position.

In conclusion, paraplanning is an important part of financial planning, and there are many other approaches related to paraplanning such as investment analysis, risk management and financial statement analysis that can help financial planners provide effective advice and services to their clients.


  1. Kohler A., 2013, ch. 3
  2. Toten M., 2006, p. 28
  3. Canion P., 2018, ch. 5
  4. Moore S., 2011, p. 153
  5. Toten M., 2006, p. 31
  6. CCH Australia Limited, 2010, p. 554
  7. Buttell A., 2008, p. 6
  8. Buttell A., 2008, p. 6
  9. MooreS., 2011, p. 159

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Author: Dominika Pszonak