Part II with Paraplanner of the Year Justin Pratt!
A few weeks ago I had the pleasure of speaking to none other then the Paraplanner of the Year (no mean feat) Justin Pratt.
Justin worked as a paraplanner and now is a Financial Advisor. He went to the University of Wollongong studying commerce and now works for Mercer Wealth Solution in Sydney. He has numerous qualifications and worked in the industry for over a decade. His work has taken him across the globe as he continues to hone his skill to reach the best outcomes for his clients. I had the privilege of having a chat to Justin about his profession and his tips for grads.
This is the second half of the chat I had with him. Enjoy! (Don't forget to check out part one here!)
What skills do you think you need to be a great paraplanner?
I think you need qualitative and quantitative skills. There’s a science and an art to it. You have to be comfortable with numbers, but also it’s about your writing style and attention to detail. You need to think laterally, think of all the possible different scenarios. You may think you have the absolute answer to a person’s circumstances but then there may be something you forget that would blow that out of the water.
Sometimes there are many different ways to come up with a conclusion. The more experience you get with it, the more you can adapt to a situation. You have to be quite up to date with current legislation, current investment theory - you need to read a lot. The legislation is changing all the time. A great example of this is in the new budget, they changed all the thresholds, so now we have to go back and reassess every ones circumstances and situations. We have continuing professional development points, which we keep up to date on a yearly basis. You also need to know where to draw resources from, primarily off the internet and textbooks, and then put that in a way that is concise for a client. You have to have the knowledge but you need to be able to present it in a way that does not bore someone to tears. It has to be logical. If you can combine all that you are half way to three quarters of the way there.
Recently on my blog a student asked me the question “What does a paraplanner do as opposed to a financial planner?”
A paraplanner traditionally would go into paraplanner as a stepping stone to becoming a financial planner. It is a great way to gain the knowledge and the understanding, to go forward down that career path. A paraplanner works hand in hand with a planner to come up with the best possible scenario and situation. The theory behind that is a financial planner should know most of what is going on and spend their time with their client, being their primary contact point and mentor.
Also planners focus on going out and finding new business and clients. They are pretty busy people. They often don’t have the time to do the follow up with the in-depth projecting, checking and writing(the behind the scenes kind of stuff that the paraplanner would do). The planner is more on the front line, in the current economic crisis we are finding that clients are ringing planners to find out what is going on, rather then the paraplanner.
But I would still go to three or four client meetings a week with a planner to do a presentation or part of a presentation. A paraplanner knows the client’s situation well, the parts that you have worked on, so you can bring that to the table while the planner will handle the implementation, the ongoing relationship and the reviews. But it depends on the complexity. Different offices also work in different ways. Sometimes a planner would use a paraplanner to handle all client queries in the first instance. It’s different in each practice.
Is a paraplanning a career in its own right? If people want to continue to become a financial planner how long do people generally spend paraplanning before they move to financial planning?
As a career in its own right? Definitely over the last ten years, and you will see job ads that back this point up, it is a career. The salary packages can be high packages depending on your qualifications. If people don’t want to have that personal client role, then I have seen paraplanners become technical experts in their respective fields. I have seen them go into software roles and the IT part of financial advising which is a booming field.
I have seen paraplanners work for large dealer groups where they work in a training role. They go out and train planners on new developments and products. There are definitely careers in paraplanning out there, I know people who have started their own paraplanning outsourcing business. So if a planner is too busy they would go to them and employ the services of a consultant who would write up their Statements of Advice (SOA). It used to be that the paraplanner would eventually become a planner, but there are now different career paths that one could chase and follow. Especially with the amount of people coming into retirement, there will be a lot of future opportunities!
What bit of advice do you have for students studying or considering a career in financial planning?
The future’s looking bright for financial planning careers. There is new legislation that is heading towards more transparency in financial planning fees and commissions. Financial planning has had a bad wrap in 2009. It is a shakeup for the industry. And if you look at the average age of financial planners a lot of them are going to be retiring. The world is also getting smaller and therefore your client base is expanding. I also think people will pay for advice if you are helping them. It is not easy. It’s not an easy “sit back” career, you have to be forward thinking. It is definitely exciting, constantly changing and worth pursuing if that is the way you want to go. You have to be qualified and also keep your qualifications up to date.
Are you a member of any professional associations? If yes why do you think it is important to be a member?
I am a member of the FPA. It’s not an industry requirement, but the FPA is a great association to be a part of, they do their job. You can keep up to date with the industry through various publications, they lobby to the government to improve the profession, and there are great networking opportunities and events. I am also a member of the FPA because I am studying to gain CFP certification and they are the authorised affiliates to provide of the program in Australia. I am an authorised representative of Mercer who provide me a license to give professional advice. I am also a Justice of the Peace. The FPA membership is really important as it places me “in the club” with the professionals.
