“Outsourcing is the new normal”, reads a recent report by Raconteur.

Raconteur looks into businesses globally, how they use outsourcing to help them develop and grow and trends in the outsource industry. It concludes that what once might have been considered a dirty word outsourcing has proved the doubters wrong and offers businesses the opportunity to grow and prosper.

A Grant Thornton report in 2014 found that 40% of global business either currently outsource or plan to outsource their business processes – and this figure continues to grow.

When asked why they outsource, business owners’ responses included:

“It gives us agility”

“It means the business can call upon expertise in different areas. We can access the creativity of specialists”

“Outsourcing enables us to be quicker to market”

Technology is seen as a huge driver for change in the outsource market with cloud computing having the biggest impact on a company deciding to move functions to an outsourced basis. Many will turn to out of house software packages from providers like Deputy and then outsource the hosting onto a cloud system to integrate with the rest of their software, as one example. We’ve seen evidence of this here in the financial services profession.

Additionally, outsourced cloud services are becoming increasingly popular with companies that want to expand their global reach. If a business needs to be sending or receiving large digital files from China regularly for example, then the company needs cloud capabilities and access to file transfer services such as Digital Pigeon in order to be able to do so.

If you are currently looking to appoint an outsource provider because you want to lower costs, gain access to a wider range of expertise or give your business an extra level of flexibility the success of any relationship will depend on how well the outsource provider is integrated with your business. The below process will help you to find and appoint the right outsourced partners, and help with these integration aspects.

Five steps to successful outsourcing

  • Determine why you are outsourcing

Firstly establish why you are looking to outsource. The key here is to be sure you are outsourcing the right things for the right reasons. Do not simply identify an issue in your business and attempt to outsource it.

Outsourcing successfully can provide capacity and ideas, but the partners you elect to appoint do not know the nuances of your business sufficiently to be able to fix any problems on your behalf.

You should enter any outsourcing agreement with a spirit of partnership, recognising that they are only part of the solution. Remember, they are there to add value. They cannot fix the things that are broken, unless it is their mandate and time will be dedicated on both sides to come up with appropriate solutions

  • Be clear on what you are hoping to achieve

You should then be clear on what you are looking to outsource. For example, rather than just a general heading of compliance, define exactly which areas of your compliance procedure you would like to outsource.

Ensure you have clearly defined metrics for what you are expecting from the outsourced arrangement. Is it a Return on Investment (ROI is often used when outsourcing a marketing function) or a saving of time? (e.g. outsourcing your Paraplanning). These metrics will not be achieved immediately as relationships take time to build and nurture. Therefore any justification for outsourcing needs to have a longer-term focus.

Define what you want to achieve and, ideally, when you will achieve it by.

  • Select your outsource partners

The third step then is to decide who to outsource to. Begin by looking at your own business and consider the cultural aspects. Identify what does and doesn’t work for you. For example, if your company is heavily into IT and constantly looking to work with the newest software, a key criteria is that your outsource partner is just as comfortable with this.

Create a list of potential firms and then obtain information from each of them in order to define your shortlist.

Armed with your shortlist, consider things like:

Qualifications, if relevant to the process you are outsourcing

Charges. As with everything in life, cheapest is rarely best!

How important face to face time is to you and whether this is something they can facilitate

How they will handle the security of your information and that of your clients

Your preferred methods of working or communicating, and whether they can accommodate this

Ideally this should be a two way process; an experienced outsource company will also be looking to Fact Find you, to ensure your company is a good fit for them.

  • Agree the how

The last stage in the process is to agree the how. This means discussing with your selected provider how the service will work. For example, if you decide to collaborate with an employee leasing company or a professional employer organization (PEO) company so that your business can share employment responsibilities, then communication is key. Make sure you are realistic here, and bear in mind that this is a fit between two companies and has to work for both parties.

The items agreed in your how should be flexible. In my experience in business, nothing ever goes to plan!

It should also be future focused, in the sense of factoring in both your current needs and those for your expected business in 1 year, 3 or 5 years’ time. Ensure you know where your company is heading and check that the outsourced provider can be with you over the long term.

Ensure pricing is discussed thoroughly. It must be clear and unambiguous. As a business owner you should be able to identify exactly what the costs will be, so there are no hidden surprises.

While you hope this will be a long and happy partnership, make sure you have a well-defined exit strategy in the event that you wish to change providers. Even if the service is incredible, your own business may change in such a way that you no longer require the outsourced support.

A final, but essential, part of the how is to put in place a Service Level Agreement (SLA). Most outsource providers will have SLAs already, which will confirm exactly what they aim to deliver and when. Make sure both parties are clear on this, that it fits with your business requirements and importantly, what will happen if SLAs are not hit.

  • Regularly review your relationships

You have now worked out why you want to outsource, what you would like to outsource, who you will outsource it to, and how you expect it work. The final piece in the puzzle is to keep the outsource relationship under review.

This is about managing the ongoing relationship and should include periodic reviews. During these meetings you can discuss the SLAs, ensuring they are being met, as well the future plans for your business and how your outsourcing partner can help support any planned growth.

Always remember your outsource provider should act as a true partner; a firm that will work with your company to help achieve your aims and support your clients.

I recently chaired two of the three Purely Paraplanning events that were hosted by the Personal Finance Society. These events were created to provide useful content to paraplanners, as well as encourage them to get together, meet their peers and share ideas.

The events were brilliant – our only wish is that we were able to get around more of the country. For all those paraplanners who were unable to make the locations this time round, rest assured we’re doing our best to cover more of the UK with each new round of events!

The sessions in London were recorded and will shortly be on the PFS website; so you can pop your feet up, grab a glass of wine and watch them online… almost as good as being at the live event!

I thought I’d quickly summarise some of my personal highlights from the conferences too:

• The panel session was brilliant. Three brave paraplanners volunteered to share their experience to date and take questions from the floor. Their willingness to do this and share all their best practice and hints and tips was reflective of how supportive the paraplanning community is overall.
• Dan Atkinson telling us that people confuse his job title for a Power Ranger…
• John Wooley from Technical Connection giving us a thorough, mind boggling, technical update. There is so much info to take in but I do love these sessions to help consolidate all the new rules in my mind.
• Having paraplanners tell me that they feel inspired to get more involved in their community and to reach out to other paraplanners.
• Paul Archer explaining about different communication styles, how to work out another persons communication method and how to then interact with them in the best possible way.
• Rory Percival confirming what we always knew to be true – that the FCA love paraplanners!
• Having the winning entry of “Describe a paraplanner in one word” be… Superhero.

There is a new round of Purely Paraplanning conferences later this year, with fresh, new content so keep an eye out for those. If you have any thoughts on what content would really help you as a paraplanner, do please drop me a line so I can feed this back to our panel and make sure these events are as perfect for paraplanners as they can be! cathi@para-sols.co.uk

Look forward to meeting even more of you at future events.
Keep on being Paraplanning Superheroes!


Para-Sols are delighted today to announce the launch of a number of their products on Adviser Store, the online shop powered by Clients First.

Following recent FCA guidance and commentary on appropriate platform due diligence, and their current analysis of suitability reports, we have been inundated with requests for support in these areas. We already had services available for our ongoing paraplanning clients, but wanted to find a way to open this up to all advice firms who require some support.

We therefore decided to make a number of our products and services available on an off-the-shelf basis, via Adviser Store, and are launching initially with:

• Platform Due Diligence Service – provides the firm with a thorough, bespoke analysis of the platform market and their preferred platform.
• Retirement Options Report template – available to purchase as a standalone document, to fully review all retirement options, and use with as many clients as you wish.
• Client Review Service – to provide a process and reports for client meetings, including portfolio analysis, market commentary and financial planning agenda.

In addition to these areas, we are regularly asked to help firms design suitability report templates for their internal use, or improve those they already have. Our Suitability Report Template service has therefore been added to the Adviser Store offerings.

To see the full range, simply click here. Any questions at all, simply contact kim@para-sols.co.uk

We’re looking forward to working with even more wonderful firms!

The Para-Sols Team


As recently reported, the FCA is writing to around 700 advice firms ahead of a supervision exercise focusing on the suitability of advice.

The regulator will collect over 1,000 client files in total as part of the exercise, with file requests mainly targeted at 500 smaller firms. Larger firms will have to provide a greater number of files, which should reflect the business’s market share.

File reviews are expected to centre around assessing suitability, including copies of suitability reports and the way firms document their investment and research processes.

Initial commentary suggested the FCA would follow this up with some guidance on best practice in suitability reports, although this was subsequently quashed. Their stance in the past has been quite firmly against being too prescriptive in case it was taken with a tick box mentality.

Instead, they have reiterated previous guidance, and suggestions of good practice they have seen. These were covered in detail at the FCA Positive Compliance days, which we attended and updated our reports accordingly. Some of the key themes to emerge from this were:

• Keeping reports as client friendly as can be. This means making them visually engaging where possible; using charts, colours and images instead of large blocks of text. In our experience, this is tricky to do first time round, but once you have created these images, they can be used in future reports to replace text, with no additional time needed. The use of colour and images can make a huge difference.

• The use of appendices. The FCA has been pretty clear that in the main body they want to see; objectives, what is being recommended and why, potential disadvantages and costs. Everything else can be elaborated on in the appendices.

• Information not relevant to the client should not be included in the report. This sounds obvious, but we still see all risk descriptions being included, not just the client appropriate one, or all products ruled out being detailed. These are not required. If you currently include these and are looking for a simple way to streamline your reports, this is your quick win!

• The use of a Glossary was highly recommended by the FCA. Another way to take out large blocks of text, place into a separate document that the client can refer to if interested and keep the flow of the main report much simpler to follow.

• Consistency is a key theme in the FCAs review of firms; they have always said they would expect a client seeing two different advisers at the same firm to have broadly the same experience. This extends to the suitability reports, and centralising your approach to this will mean that whether the adviser or a paraplanner writes the report, the output and topics covered will remain the same.

This is a quick overview of some of the key tips we have taken from the regulator recently. If you are struggling to make your templates reflect this, or even to create a cohesive set of templates to use in house, we may just have the solution for you! We will be launching something new next week, so watch this space….

Platform Due Diligence; what to do, how to do it and how often to do it. It crops up from time to time, with a bit of guidance here and there, but nothing concrete and no rules provided on what exactly needs doing.

The FCA then released the TR16/1 paper, essentially berating firms for not doing it well enough.

We already wrote a blog with some platform pointers here to help address this disparity: http://www.para-sols.co.uk/blog/industry/stay-one-step-ahead-with-our-platform-pointers/

However, we have continued to have requests from firms looking for more guidance as to what to include in their Due Diligence. Therefore, in addition to the points in the earlier blog, we would also suggest you consider:

• Make sure you know exactly what is important to your clients (ask them!) and not just what makes your life easier. The regulator wants to see the client impact while accepting that streamlining administration processes is a happy side effect.

• Consider the platforms technology, what it is using now, whether it has changed recently and whether it is likely to change soon.

• And make sure you consider the 9 key areas highlighted by the regulator in their original guidance, namely:

1. The platform provider
This includes reputation (industry awards, client feedback etc) and financial standing (including ratings and profitability)

2. Platform terms & conditions
In particular, what is the process if an adviser firm leaves a platform? Is there a notice period, issues with client ownership/contact or remuneration?

3. Charges
Core charges, as well as wrapper and transaction charges. Switching charges may have an impact, depending on the investment proposition. Also is family linking important?

4. Range of funds and wrappers
Range of tax wrappers in particular will impact how many different platforms are needed – and when off platform will be more suitable. How frequently are SIPPs, S32 and trust accounts used? Is the preferred investment proposition available?

5. Asset types
Is there a requirement for ETSs, investments trusts, structured products or direct equities? Again, down to client categories.

6. Platform functionality
It is important to determine firstly what functionality our firm and its clients’ need – and then whether the platform offers it. This can include withdrawals, paper based, adviser remuneration, client reporting, management information and any desire to white label.

7. Accessibility
What levels of access are required and does this need to be 24/7? Does the platform tie in with any DFMs you use and do clients need functionality?

8. Platform tools
Do you require any platform tools – or will these be managed off platform? Risk profiling, cashflow etc?

9. Support
What support do you need and how best do you receive it?

Speaking at the FE investment summit last year, Rory Percival of the FCA highlighted expectation on platform due diligence, stating “For platforms we would expect an impartial assessment of the options, taking into account the client bank circumstances, what services that you want to provide to those clients and which platform or platforms in the market best fit those services and those solutions that you want to deliver to those clients.

Going through that process, writing it down, doesn’t have to be war and peace – but what your thought processes are, and how you have come to the conclusion around your platform. That’s a professional approach – that demonstrates a mindset that’s got the client at the heart of the business, your doing the right thing for the client.”
If you are still struggling to articulate the research you have done, or to feel confident you have covered all areas, we will be launching something next week that will be able to help you. Watch this space!