Each month Financial Planner asks a leading professional to share best practice from their business and the story of how they - and their colleagues - built the company. This issue we talk to Richard Allum CFP^CM of The Paraplanners.
Richard is a leading UK Paraplanner, IFP board member and one of the founders of the Paraplanner Powwow.
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Financial Planner Magazine: When did you first get involved in financial services and the Financial Planning profession and what attracted you to Paraplanning?
Richard Allum: Like plenty of friends and colleagues in the industry, my financial services journey began on the life company side of the fence. In my case, it was Eagle Star, who I started working for back in 1995. By the time I left in 2001, I'd amassed knowledge and experience of, not only products and regulation – particularly the technical aspects of group pensions and offshore – but of Financial Planning too. I'd lived in Australia for a year and kept in touch with the Financial Planning world Down Under. I witnessed the emergence of Paraplanning in Australia and – joining the dots – realised that it was only a matter of time before Paraplanning reached our shores. In 2002, I thought 'Well, why not create the first outsourced Paraplanning business in the UK?', so that's what I did.
FPM: When did you set up The Paraplanners and what's your 'journey' been like with the company? What have the ups and downs been?
RA: In fact, The Paraplanners is my second outsourced Paraplanning business. I'd originally co-founded Adviser Assist – the first Paraplanning business in the UK – in 2002 but decided to go it alone in 2008. We rebranded as 'The Paraplanners' last year. Like many of the outsourced businesses that have sprung up in recent years, it was just me to begin with. I managed to nurture a growing pool of clients and, though a policy of patient recruitment, have gradually built the scale of the business. The 'ups' have been establishing really strong working relationships with clients who've stuck with us through thick and thin and count us as part of their team. There haven't been too many 'downs' – touch wood – besides those usually encountered by anyone running a small business.
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FPM: What's the team like at The Paraplanners and what helps you work together? What have you learned as part of a team?
RA: There are four of us: Kim Bendall, Kat Mock and me are Paraplanners, and Gemma Dennis leads our administrative service for advice practices. We're looking forward to welcoming a new Paraplanner in the New Year too. Although we work together all the time, we don't actually work in the same place. We use web-based applications, like Basecamp, Skype and Google+ to stay in touch with one another, and our clients, day-to-day.
At the heart of the business we have very strong processes but there are no heirs and graces as far as working together is concerned. We all muck in and, to be honest, we have quite a good laugh. It's not easy finding people with the character, expertise and skills to be able to work the way we do, so I'm really lucky to have the team that I have. Individually, we each work side-by-side with Financial Planners and advisers, offering ideas and insights through research, analysis and reports but, as a group, we also pay a great deal of attention to professional development and the issues on the horizon for both advice businesses and their clients.
FPM: While the IFP has been a great supporter of Paraplanning and runs many initiatives for Paraplanning some people have been sceptical about Paraplanning and its benefits? How would you respond?
RA: It's true that some advisers remain unconvinced by the role that Paraplanners can play so we have the task of encouraging sceptical client-facing colleagues to, not only recognise the contribution
that Paraplanners are already able to make to great financial advice, but also their potential to prove invaluable assets for advice practices in a post-RDR world. At The Paraplanners, we think the relationship between Paraplanners and advisers is similar to that between businesses and independent market researchers or research scientists because our role is two-fold: to gather evidence, compare options and consider precedents; and then to offer our opinion on what we've learned and the insights we are able to share in order for an adviser to make an informed judgment about how they can best advise their client.
However, just as in market research and scientific research, Paraplanners are able to offer a range of opinions, insights and interpretations which help inform the direction and decision that advisers make but, importantly, do not displace them.
FPM: What makes good Paraplanning and a good Paraplanner?
RA: I like the way my colleague, Kim Bendall, describes it. She says that good Paraplanning involves a Paraplanner and an adviser approaching the creation and monitoring of a client's financial plan as a shared venture, which makes the most of their blend of their distinct skills. On one hand, there's a Paraplanner who focuses on due diligence, research and recommendations; on the other side, there's an adviser who crafts the investment vision and strategy, manages the client relationship, and anticipates and addresses regulatory obligations.
In between, Kim says, there's a middle-ground, in which both sides work towards the same goal at the same time: designing the financial plan, attending client meetings, pursuing CPD and monitoring compliance. What makes a good Paraplanner is the ability to apply their knowledge and expertise individually as well as work collaboratively with advisers – all in a way that inspires confidence within a financial advice practice and means Paraplanning dovetails seamlessly into a financial planning process.
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FPM: How has business changed over the past few years. How many clients do you have and what's the annual turnover?
RA: I didn't set out with a grand scheme to build a business empire or anything so I've patiently built the business over the years. As our clients businesses grew, so did the team and the dynamics and personality of the business with it. Today, we work with 25 firms. I'm not in the habit of brandishing financials; client happiness and profitability are my two main measures.
FPM: What has been your greatest source of achievement in running your business and what are you proudest of?
RA: Still being in the outsourced Paraplanning business after more than ten years strikes me as being a big achievement in itself. Besides that, I like to think I've played my part in helping to raise the profile of Paraplanning. And then there's the election to the IFP Board and the Paraplanners Powwow, of course.
FPM: You are one of the founders of the Paraplanner Powwow events. What inspired you to launch these and how have they gone?
RA: It's no secret that Paraplanning is on the cusp of professional transformation. And, in January this year, I published a post at our blog - http:// theParaplanners.com/blog/2013/01/Paraplanners- powwow/ - where I thought out loud about the idea of a gathering of Paraplanners to gauge consensus on what that transformation might look like. It seemed to me that, despite the investment made by the IFP and PFS, there wasn't a place in which Paraplanners could meet without the influence of one body or another.
So I thought a professional body-agnostic event with the date, location and agenda determined by Paraplanners, might be just the ticket. The response to the idea was remarkable. And that's the origins of the Paraplanners Powwow: an independent meeting of minds designed to address the things that matter most to Paraplanners in the United Kingdom.
FPM: What plans do you have for the future of Paraplanner Powwow?
RA: We're meeting with supporters to explore the potential appetite for another national Powwow and, just as significantly, to be able to offer support to Paraplanners who want to create their own mini Powwow. We're hopeful about the prospect. There certainly doesn't appear to be a lack of interest among Paraplanners for another event!
FPM: What do you like doing in your spare time outside of work?
RA: Friends and followers on Twitter will know that, besides spending time I can with my wife and kids, my main distractions are Nutella, anything Apple-related – and gadgets and gizmos in general – and Formula 1.
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My Business Day
I'm an early riser so I'm usually at my desk at 5 am.
07.00 – I then get the kids up in plenty of time for the school run.
08.00 – I'm back at my desk.
09.00 – I speak to the team and we take a look at the tasks for the day.
Following that, I work through until 6pm at which point I usually call it a day.