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It feels like we’re moving on to yet another phase of the Covid journey of fun we’ve all had the pleasure of experiencing so far in 2020; the immediate crisis is moving behind us*, and we’re now staring into an abyss of challenges and struggles as we deal with the aftermath.

Markets bouncing around quite giddily have created a bit of a false sense of bounce back for some. Each recession has its own characteristics, and I think this one isn’t going to be characterised by the performance of the markets, but by the human impact. 

It wouldn’t matter if the stock markets were back at their pre-Covid levels on Monday, the fallout is far more systemic. As we start to think about a rebuild, the challenges are far more nuanced than economics. As business owners, some of the problems we’re currently facing are: 

  • What impact has any furloughing had on staff, and how do those who have been on furlough restart their engines and get back up to speed?
  • What impact has redundancies had on remaining team members?
  • How do you begin to rebuild an office environment, albeit a new style one, when people are so used to being at home now?
  • How do staff balance their work lives when a lack of childcare is still problematic for many?
  • What about morale and team spirit? How do you rebuild that when Zoom quizzes have just about been milked for all their worth? 
  • Most people’s work focus comes from having plans and goals; what do you do when they’ve been effectively ripped up and the future is still looking so uncertain and unsettled for us all?

These are more emotional issues, but ones that will still have very tangible impacts. Most firms have done their absolute best to look after their staff and clients and guide their way through the choppiest of waters. But none of us have got it exactly right, as we didn’t know what on earth we were dealing with, and unexpected repercussions are starting to creep in and I believe will become more and more apparent in the coming months. The immediate health risk may be starting to fade away, but the shockwaves that it has created in individuals and therefore businesses (and therefore the economy) have barely got started.

But – it’s not all doom and gloom! Firstly, everyone is in the same boat. So it’s a great time for sharing and supporting one another (and a lot of good can come from authentic collaboration, and not just for commercial purposes). Plus, a new level of resilience will be borne out of this, whether emotional resilience (realising that the end of your tether is a bit further away than you expected) financial resilience (discovering that a huge amount of expenditure can be very easily cut back with little impact on the daily joys of life) or business resilience (discovering how to flex, adapt and innovate) and these will open a whole world of opportunity. Just as soon as we get out of the current mire. 

Anyway, speaking of the end of Covid, Jo and I optimistically recorded a podcast episode on this last week, as we begin to look back on lessons learnt, and I discovered what a sneaky little minx that girl is. I’ve also linked last week’s Apricity DB webinar, which was a busy one given the recent FCA updates. And, again with one eye on the post-Covid world, we’ve had requests to get our Suitability events back up and running, and so need your help for how these look / where they’re held. If you have 10 seconds to complete the survey below, it would be much appreciated. 

Have a wonderful weekend all. We’ve been working new courses from The Art of Finance and decided The Art of Cocktail Making is an essential one and so I’m kicking my weekend off by doing some essential background research… 

Cathi

*potential second wave / beach madness aside

Episode 10

Listen to: our post-Covid giddiness. And listen out for the post credits chat… weeeeeeee…! 

Suitability

Tell us: how you want our courses, and where. And we’ll be there with bells on.

Talk: Webinar

Watch back: Paul & Christian updating you on the evolving saga of DB transfers

Our Founder and Director, Cathi Harrison, recently took part in The Lang Cat DEADx event and spoke on the panel – she made some important points about value, specifically around MiFID II and investments. Catch up on what Cathi had to say below…

“The question of value, and the role of active and passive management within that, is something that came up at one of our recent training academy events.

At one of our sessions earlier this month, the point was made that when you compare a passive investment with an active one, why would you not be choosing the passive strategy in order to deliver the best outcomes for your client?

This was argued not just on the cost front, but in terms of performance as well.

Schroders were representing the active side of the debate, and they accepted that if you look over the past 10 years, passives were a good place to be.

But they also argued the value they add is when the market turns and we find ourselves in another downward market cycle. In that situation, they argue, active management has an important role to play.

What I think is interesting is when that turn does happen, which it inevitably will in the not-too-distant future, the speed at which markets change is very different now compared with even what we saw in the financial crisis.

The message we give to people who are new to the profession is there’s no single right answer when it comes to active versus passive.

But there is a potential advantage that active managers have in that when they are tested by tough markets, that could well be their chance to shine.

Explaining charges, and what is reasonable

There are many layers to the cost of investment, from advice charges and platform fees to various investment management costs. It’s easy for us to forget how difficult this can be for clients to understand.

Costs and charges disclosure is much clearer now than it ever used to be, particularly as the breakdown is now given in pounds and pence.

Yet it can still be quite hard for clients to really ‘get’ what it is they are paying for. And if they can’t really understand what charge covers what service, then how can they truly understand value and what good value looks like?

Given the adviser or planner is the one who’s closest to the client, arguably the advice charge is the easiest part to explain as it’s where firms can articulate their value.

It’s not about markets, or complex things that clients don’t necessarily understand.

It’s about the relationship, and sitting with that person through challenging times and helping them plan. That is intrinsically what value is all about.

The funds and the platform should offer value too, but that can be harder to explain.

Of course, there is then the issue of how you define what is a ‘reasonable’ total cost of investing.

On the paraplanning side of our business, you do still see some total charges that make you take a sharp intake of breath.

It’s not for us to say what’s right or wrong, but sometimes we do suggest alternative approaches.

Equally, there are some advisers where we’ve argued an increase in fees is justified for the amount of work they are doing.

There are people who are so scared of being seen as ‘overcharging’ their clients that they are not making any profit, and don’t have a viable business model as a result.

Value is subjective, but I think there are clear lines around where certain levels of charges aren’t viable.

The role of regulation and Mifid II 

We are well versed in the reality of costs and charges, and just how complex these can be.

Our admin team spends a huge amount of time on the phone to providers trying to get an accurate picture on costs, and having to deal with the fact that every company calls charges something different.

We’ll get a headline cost figure, but then when we double-check this and ask further questions, it can take a lot of work to get to the true cost figure.

So what chance has the client got in understanding this, or taking any kind of interest in financial services more broadly?

Whether more regulation would be helpful here, or even whether the regulations we have now are working, is debatable.

Take Mifid II as an example.

Mifid II was undoubtedly well-intentioned, and if its aims of greater transparency had actually been delivered as a result of its introduction then that would have been great to see.

Unfortunately, so far it’s been a mess and has just caused more headaches.

I’ve seen a whole load of extra work for advisers and paraplanners, and presumably the same goes for providers. But I haven’t really seen any positive outcomes for clients.

If there was a way we could cut through all of that, and get to one clear, all-in total charge, that would be much more meaningful for clients than whether one particular product, recommendation or strategy offered value over another.”

Just how does our Director, Jo Campbell, manage our growing team of paraplanners? She spoke to Professional Paraplanner to explain all… 

Click here for the article.

This really is an age-old question, alongside legends such as “why is the sky blue?” and “in the land of Cinderella, why did she have such unique feet that she was the only size in the village, yet the shoe was such a perfect fit, it still managed to fall off?”. I digress, sorry. So, the question of “just what is a paraplanner?” has haunted me at dinner parties, the occupation box on ANY application form and even in my own industry. It’s not one that is easily answered but SM&CR (Senior Management & Certification Regime) has dictated that we give it another bash.

For those not familiar with the new SM&CR proposal, in a nutshell, it is new FCA legislation around ensuring the people in your business who can impact upon the client are properly regulated and appropriate for that role. Senior Managers and Certified People. (Learn more about how our sister company, Apricity, can help you in your SM&CR preparations here).

The Senior Management side of things is pretty easy to define, but the second area; the Certified personnel is slightly more obscure. The relevant factors that firms would be required to consider in assessing individuals include whether the role is simple or largely automated, or involves exercising discretion or judgement.

In essence, the FCA has said it is up to advice firms to conclude whether paraplanners should be considered to hold the Client Dealing Function. The FCA rule has been drafted in a way “that provides firms with the flexibility to exercise judgement on whether a role requires certification” Helpful.

Therefore, it may seem quite obvious for the majority of people in your business. You know yourself who has what impact (planners/advisers) and those who have less impact (administrators etc), but what about that weird hybrid we call the lesser spotted Paraplanner?

In general, there are three species of paraplanner.

The in-house paraplanner.

Usually found around the same watering hole and highly skilled in client relations, business models and specific investment propositions. They tend to have the larger impact on your business and depending on the genus of your particular paraplanner, are the most likely to be needing certification. This is especially important if they are involved at any decision level of the advice process or if they contribute to any investment proposition choices.

The outsourced paraplanner.

These tend to roam around the habitat and are curious creatures. They taste a lot of different foods and specialise in a number of different providers, investment strategies, tax areas and financial planning solutions. They tend to be less involved with the client, interacting more with the adviser and thus tend to have less impact upon the decision making of the business and are less likely to require certification.

The third is the middle ground. The Liger, if you will. Those paraplanners who are either inhouse but make no decisions and perform more administrative duties or are just essentially report writers; or the outsourced paraplanners who have such a strong relationship with the adviser they do assist in decision making and can impact upon the end client. 

Essentially, it will be up to adviser firms to decide whether your chosen paraplanner should be considered a certified employee and whether or not they should be included in the second tier level of the SM&CR rules. My advice is to use discretion, but to err on the side of caution. If you think they may have any impact, have them certified. It can’t hurt. Unlike Ligers which apparently can hurt you. (I appreciate I’ve stretched this metaphor really far now and am going to leave before I turn full Attenborough and start preaching about how we should recycle paraplanners to stop turtles getting their noses stuck in them).

Jo Campbell – Director of Quality & Operations. 

On 1st June, we turned the grand age of ten! Below, our Founder and Director, Cathi, shares her reflections on the last decade…

“Well – 10 years – that went fast!

The official birthday for Para-Sols is 1st June, as June 2009 is the month I did my first freelance paraplanning work and was able to do a huge invoice at the end of the month for around £40…  

I had, however, been working on the business for 3 months by this point. I had quit my employed paraplanning role, sold my car, and figured the proceeds from the car were sufficient to pay my mortgage and basic expenses for those 3 months, by which point I would surely be living the freelance dream.  

In reality, I hadn’t factored in things like needing to eat, and so by the end of the 3 months (end of May), I was completely broke. Literally the most broke I’ve ever been in my life. I was recounting a story the other day of, around this time, feeling depressed that my new business wasn’t going how I wanted, I dug around and found 20p in my flat. Literally the only 20p I had left in the world. And I went to Greggs to treat myself to an iced split which I recalled being 17p. But, when I got there, I discovered that, thanks to the wonders of inflation, they were now 25p, and I couldn’t afford one.  

I walked down to my Mum’s (obviously couldn’t afford petrol) and sat and cried at the fact I couldn’t even buy a cream cake. She gave me 10p, told me to go and buy one, and then to go and get a job, as I obviously couldn’t carry on like this. I suspect the majority of new businesses go through similar struggles and lows at the beginning, and I can easily see why many people would choose to stop at this point. I almost did.  

Fortunately for me (not so fortunately for the people who have to deal with me on a daily basis), my intense stubbornness wouldn’t let me quit just yet. I managed to get a repayment holiday on my mortgage, did some part-time waitressing (terribly) to feed myself, and, at the end of that month, was able to do my first invoice… and away we went.  

And what a ten years since! So many highs, so many challenges, so many lessons learned, and the ability to meet and work with so many wonderful people along the way. I’ll be forever grateful to those who have taken a chance on me and Para-Sols; the team, especially the early employees (I’m looking at you Jo Campbell) for taking the risk of joining a fledgling company. And the clients that give us the opportunity to support them and their businesses, and understood when the inevitable growing pains hit and things sometimes got difficult.  

There’s an old adage that ‘overnight success’ actually takes 10 years to achieve… and I have felt every day of those 10 years to get to where we are now! But where we are is somewhere phenomenal, with a huge amount to still look forward to as we build out the businesses within The Verve Group over the coming 10 years.  

So Happy Birthday Para-Sols; thank you to everyone that has supported us, and roll on the next 10 years! Time for an iced split or two I think…”

 

For those internal administrators out there on the verge of pulling your hair out, look no further… we have the answers for you!

Let’s face it, we all know how painfully time-consuming chasing insurance companies can be! Unfortunately, we can’t create any miracles here – however, we may just have some handy hints and tips to ease your stress levels when sending off a Letter of Authority (LOA).

Letter headed paper

To begin with, we would always recommend your LOAs are printed on letter headed paper. You may slip through the net on occasion without a letter headed LOA, but the chances are slim these days. There’s an hour of your life you won’t get back sitting on hold, waiting to find out it’s been declined! If your letterhead doesn’t include the firms’ company address and FCA number, we would recommend that this is to be included within the main body of the letter. This is always required by insurance providers so shouldn’t be avoided.

Info, info, info!

No doubt you will have come across a situation where the adviser has met with a client and the client has no idea what type of plans they have, just a few annual statements stored away from previous years. Our advice to you would be to find out as much information you can from any documents the client has such as, what type of plan this is & plan numbers etc.

You should then have enough information to confirm with the provider which department to send the LOA to, how they would prefer to receive this and whether they require a wet signature, or are happy with a scanned copy. The more groundwork that is done at this stage, the easier it should be once the LOA has been sent off, as you should have a specific department to chase and confirm turnaround times etc. Otherwise, the LOA could disappear into the depths of Aviva, never to be found again.

Most providers will only implement LOAs for a certain period of time. Therefore, if your firm is looking to retain ongoing servicing for the client until requested otherwise, it’s worth including a brief sentence stating this.

What else?

Other points we would recommend to include in your LOAs would be the following;

Clients’ Name

Clients’ D.O.B

Clients’ Address

Clients’ NI Number (required for Final Salary schemes, not generally necessary for money purchase & investments)

Clients’ Signature

Plan Type/s

Plan Number/s

We hope this provides you with some guidance – good luck!

Our Founder & Director, Cathi, will be speaking at Money Marketing Interactive on 4th April  2019 – in the meantime, they’ve conducted an interview with her which you’ll find below…

What is the most encouraging advice market trend you are seeing at the moment?

Advisers changing their mindset from being advisers, to being business owners who happen to give financial advice. Not only does this mean more professionalism, it means more robust, long-term business. It also means better client outcomes and advisers embracing things like technology, outsourcing and implementing compliance frameworks – not because they have to, but because they can see sound business logic in it. This shift will escalate in coming years and turn financial services into a true profession.

What one word or phrase do you think sums up the state of the financial planning profession today?

Trying. Both in the sense of regulation and market conditions making it a very trying time for advisers, but also that all the advisers I speak to and work with are trying so hard to navigate through all of this, to support their clients, to give them piece of mind and to build sustainable profitable businesses. It feels like there’s a huge amount of effort from all angles at the moment, and I think that bodes really well for the future of finance.

What do we need to do to improve financial literacy in the UK?

It simply needs to start earlier. It was hearing about someone receiving an inheritance, when I was 22, that made me question what they would do with that inheritance, and realise I literally had no idea about the world of finance whatsoever.  Not even what an ISA was. Or how a pension worked (despite being in a GPP).

Realising there was this huge gap in my knowledge of something so fundamental is what drove me to begin a career in finance. But I was already 22 and had made some poor financial decisions in life. It’s been said a million times before, but the fundamentals should really be taught in school – as a minimum.

What is the one key skill all aspiring advisers should learn?

It always has been, and always will be, about people, about building their trust, connecting with them to a level that they feel comfortable talking about their money, something that doesn’t come easily to most people.

Having knowledge is important. But listening skills, empathy, and being able to explain the complex in simple terms will always be the mark of a truly great adviser.

Read the original article here.

Most people associate me with Para-Sols, my original baby, and a paraplanning business that has exceeded every hope I could have ever had for it. Paraplanning was my background, my first love, and building a company that enabled me to do what I truly enjoyed for a living was an absolute dream.

But, as all babies / businesses do, it grew up. It didn’t need me as much. Para-Sols has an incredible team, and a brilliant grad scheme that brings trainees through and takes them on the paraplanning journey. And so, without it needing 100% of my attention, I was able to look at what other issues there were in financial services that I thought I could help do something about; and along came Apricity. Still in its relative infancy compared to Para-Sols, it nonetheless has had its stabilisers removed (sorry for all the metaphors!) and I was once again able to scratch another itch I had.

And so today sees the launch of two more entities; The Art of Finance, designed to bring more people into financial services and show them what an amazing career option it is, and, pulling all of these together is The Verve Group.

Within the group is the existing brands and companies; Para-Sols, Apricity, The Grad Scheme and The Art of Finance, which all support at least one of the two missions of Verve:

To provide financial planners, of all shapes and sizes, with the best support services around and; shout about how brilliant a career in finance is, and provide opportunities for those wanting to get into it.

In addition to these, I have my own personal mission – to run the type of businesses I always wanted to work in. I regularly pledge to my team that working with me, they should never have ‘the Sunday night dread’, and if they do, I’m failing. Our employee total is approaching 35, and so the environment from when there were 5 of us is very different, and sticking to this mission means constantly changing and evolving; but it is one I am completely committed to.

So a lot has changed in the last 10 years (10 years!) but also a lot has stayed the same; a love of paraplanning, a desire to help promote financial services, an enthusiasm for supporting advisers and enabling them to build their businesses further, and a determination to be the best employer I can be.

It’s been an absolutely thrilling 10 years, and I can’t wait to see what the next 10 hold. Thank you so much to everyone who has helped and supported and generally been lovely to us over the years. It really is a wonderful profession to be part of.

Cathi x

Recently our Director, Cathi, took part in an interview with Professional Paraplanner where she was asked her 3 top tips from a compliance perspective to help paraplanners – this is what she said…

1. Get your head around charges disclosure – as best as you can!

Mifid II has caused all manner of bother, with very complex requirements that, for the most part, simply can’t be met right now, due to lack of information from funds and providers. But this will change from April, with enhanced reporting required from them.

So it’s important to start with a clean sheet, understand what disclosure is needed, and how you will turn that into something clear and understandable for your clients. As ultimately, that’s all that matters. Don’t get bogged down in detail that doesn’t benefit the client!

2. Be clear on the difference between a client’s needs and objectives.

Objectives being what clients want to achieve (retire at age 60, pay off mortgage, for example) while their needs are often identified by the planner, being more quantifiable, and more essential (£1,500 net per month in retirement for example).

Sometimes needs and objectives work in harmony. But sometimes they are mutually exclusive, and the planner may have to work with the client to understand the importance of their needs.

As a paraplanner, knowing this distinction, and challenging a factfind that doesn’t provide sufficient detail to enable you to identify both objectives and needs, will mean a more robust file, clearer process and more suitable advice.

3. Familiarise yourself with COBS 9.4.

Before you fall asleep, hear me out! At the recent Professional Paraplanner Technical Insight Seminar I presented at, almost every single paraplanner was amazed that in the Conduct of Business Sourcebook, the FCA only ask for three things to be in the suitability report.. 3!

1. The client’s objectives

2. Why the advice meets those objectives

3. What the disadvantages are.

Everything else, in theory, will be on the file, or in supporting documentation, such as an illustration.

In reality, we all put more than this in, as you want a single document clearly explaining the advice to clients.

But being familiar with the actual FCA requirements can really help you assess how your firm is approaching reports, and whether any improvements can be made.

For more information on how our sister company, Apricity, do compliance – head over to their website. 

Which direction does the profession go from here?

Recently our Founder & Director, Cathi Harrison, took part in an interview for Money Marketing around the paraplanning profession and where it’s heading. Read her comments from the article below…

Qualifications alone do not create effective paraplanners

“The role of the paraplanner has specialised over the past few years, in the same way the adviser role has. The focus for paraplanners is now ensuring they are spending time on the more technical elements suited to their skill set. This has meant the adviser, paraplanner and administrator roles have become much more clearly demarcated.

Overall, I don’t see a huge change in the number of paraplanners out there. Some will naturally move into adviser roles, and the number of new paraplanners just isn’t high enough to offset that and achieve growth in this profession. In terms of qualifications, working towards a Level 4 Diploma makes sense, but we do find, as is the case in most professions, that a qualification does not make a good paraplanner.

They help, and can back up good experience and the right skills, but are not the be all and end all.

Anything that isn’t client relationship management, and business managing, should be handled by a support team of paraplanners, administrators, office managers, HR etc, depending on the size of the firm. The actual tasks will be carved out depending on the people and roles available.

Again, there is no one-size-fits-all; it’s what works best for that firm, to ensure the clients get the best possible service and experience”.

For the full article, click here.

We’ve been a little quiet on the blog front lately (sorry for that!), we’ve had a busy start to the year and you know how it is, weeks pass you by and the next thing you know you’re about to indulge in Easter…

As most of you will know, last year marked a huge turning point for Para-Sols. Our client list tipped over the 110 mark and we doubled the size of team in 12 months, a lot of which can be credited to us relaunching our graduate programme – The Grad Scheme – earlier that year. As with any expansion though, we certainly experienced some teething problems as we introduced new systems and processes, identified gaps in our training and just generally embedded new personalities into an already established culture.

Not ones to rest on our laurels and as great believers of only being ‘as good as your last report’, we focussed all our efforts into building up our learning and development framework for all the team (new and existing) and so that we always have an eye on our quality, introduced a new role which has seen our previous Head of Paraplanning, Jo Campbell, promoted to Director of Quality & Operations.

As well as a structure shuffle, Cathi, together our Director of Culture & Engagement Natalie Bell, also introduced a number of staff initiatives to make sure that the teams professional development didn’t take a back-seat when the day job got crazy busy.

“Encouraging personal growth runs at the core of everything we do. It may sound a bit of cliché, but we believe our role as employers is to encourage people to grow as individuals. Of course, when that happens we grow collectively as a business too” says Natalie Bell

At the end of last year, we put a temporary hold on onboarding new clients and have focussed the last 6 months on talent management alongside giving our existing client base some love and attention.

We’d be here until next week filling you in on all the finite detail of ‘how’, so in brief, here are some of the highlights…

  • designing and rolling-out our new report templates, making them much more user friendly and generally giving them a much fresher and modern look;
  • made the most of the down-time and closed the office for the first week back in January to deliver dedicated technical training across all levels of the business;
  • carried out a recruitment drive to build capacity in our ‘supporting roles’ so that our paraplanning team could maximise their time on the job at hand (more on that in a future blog);
  • launching a breakfast ‘Study Club’ for all staff so they have protected time, at least 3 times a week, dedicated to their studies with food available to fuel their mind and a senior member of the team on hand to answer questions;
    • sat, and passed, a record-breaking number of qualifications across January, February and March (see blog Exam-tastic Progress); and
  • bringing our Health & Wellbeing programme activity (such as step challenges, nutrition talks and setting up a running club) to the forefront to keep the inevitable Winter germs at bay and hold onto our sanity during the chaos.

It’s been an interesting year, and more recently, interesting few months but our leadership team have faced each challenge head-on and are feeling pretty proud of themselves for reaching this point still with a smile on their face and hair on their head (albeit with more grey). And although we’re not naive enough to think we’re walking into the sunset just yet, the light at the end of the tunnel is getting much brighter and as we head into Spring, we are seeing our efforts come to fruition.

 

 

2017 was a pretty momentous one for us at Para-Sols – we deem it, ‘our year of growth’. It’s the year we invested a huge amount of time and resource on improving our infrastructure. The year we immersed ourselves in a bigger vision – one that would serve the whole profession. Quite simply, it’s the year the business took flight and moved into its next stage of growth whilst remaining true to who we are.

So on this dreary Blue Monday, we’re reflecting on everything we achieved last year as a team and are thankful for the support and patience whilst we’ve made the transition. In true proud-parent-style, here’s a snippet of just some of the many milestones that we achieved last year.