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Paraplanners and Financial Advisers – What is the difference?

Paraplanners and advisers work closely to provide clients with high quality advice. So, this begs the question, what exactly is the difference between a Paraplanner and Financial Adviser?

In this article, we attempt to clarify some of the key differences between the two roles. Financial advisers are known to dedicate most of their time directly engaging with clients, whilst Paraplanners typically work behind the scenes, with less client interaction.

It is worth mentioning that this dynamic is evolving, as some companies now require and encourage their Paraplanners to participate in client meetings and build relationships with clients.

Paraplanners and Financial Advisers – What is the difference
Paraplanners and Financial Advisers – What is the difference

Whilst the level of client interaction may differ from firm to firm, a common key difference in the two roles is the nature of that interaction. Financial Advisers possess the knowledge and skills to attract new clients and present them with their recommendations.

On the other hand, Paraplanners are essential in collecting client data, conducting thorough research, and presenting their findings and analysis to the Advisers. So, it’s fair to say there is a difference in skillset.

Differences in Practice:

As you may know, there are different stages in the advice process. One way to help define the differences between a Paraplanner and an Adviser, is to look at their role in each stage of this process. It is important to note however that this may differ from one firm to another.

Advice Stage: Paraplanner Financial Adviser
Establishing and Defining the Client Relationship At some firms, Paraplanners may have no involvement in this first stage. However, at other firms Paraplanners may have the task of collating the necessary documentation for this initial meeting. The Advisers will discuss service standards and fees with the clients in the initial meeting, as well as finding out a bit more about the clients and their requirement for financial advice.
Gathering client data and determining client goals and expectations Paraplanners carefully examine the fact find to make sure that all essential details have been recorded for a recommendation. Additionally, they assess a client's risk tolerance and capacity for loss to ensure any recommendations are aligned with this. The Adviser’s aim is to determine the goals and financial objectives of the clients. The Adviser will discuss the client’s attitude to risk and capacity for loss with the clients.
Analyse and evaluate the client’s financial status Paraplanners play a big role in this stage of the advice process. They will conduct research into the clients existing investments to review suitability, along with exploring alternative investments.

Paraplanners are often responsible for building cashflow models to allow the advisers to discuss any peaks and troughs with the clients and to stress test the client’s circumstances.

The Advisers will review the existing policies with the clients using the research conducted by the Paraplanner and discuss why they may or may not be suitable for their circumstances.

The Advisers will present the cashflow forecast to the clients and can apply any necessary stress tests applicable to the client’s circumstances.

Develop and present the financial plan Paraplanners are often responsible for writing well-researched recommendations tailored to a client’s unique financial circumstances. The Advisers are responsible for presenting recommendations to clients, addressing any questions or concerns.
Implement the financial planning recommendations Paraplanners may be responsible for pulling together the necessary documentation to implement the recommended plan. Alternatively, they may give guidance to the administration team. The Advisers will likely have a further meeting where they will assist the client in filling in the necessary paperwork to implement the financial plan.
Monitor the financial plan and relationship Paraplanners will often analyse the performance of the client’s funds. They may also produce portfolio reports and analytics for advisers to present to clients at annual review meetings. Often Paraplanners will also review the clients file ahead of the review meeting to point out any areas for discussion. For example, whether the client is using their tax allowances. Advisers will discuss performance with the clients and present portfolio reports and analytics. Advisers will also review the client’s circumstances during the meeting, to make sure that the recommendation remains suitable, or if applicable, ensure any necessary changes are made.
Paraplanners and Financial Advisers – What is the difference
Paraplanners and Financial Advisers – What is the difference

Differences in Qualification Requirements

To become an Adviser, you must be Level 4 qualified as per the regulator’s requirements.

The regulator has not however, specified minimum entry qualifications for Paraplanners. Therefore, requirements can differ from one firm to another.

Interestingly, there are some firms where Paraplanners are more qualified than the advisers that they support.

In fact, many Paraplanners are now striving to become Level 6 qualified.

Typically, most employers expect Paraplanners to be at least RQF Level 4 qualified.

Paraplanners & Advisers Working Together

The presence of a Paraplanner is crucial for an adviser to effectively carry out their duties, and vice versa.

Paraplanners not only provide valuable assistance to advisers, but they also possess a wealth of expertise. As Paraplanners, they also play a vital role in protecting businesses from inadequate advice, acting as the final line of defence.

By handing cases, Paraplanners allow advisers to dedicate more time to meeting a greater number of clients and exploring new business opportunities.

And, without advisers, there would be no requirement for Paraplanners.

So, as you can see, you can’t have one, without the other!

If you’re considering a career as a Financial Adviser or Paraplanner, think about your own skillset and how it fits with the roles described above. For more real-life information on the differences, listen to Kimberley talk about her role in A Day in the Life of a Paraplanner and Chris talk about his role in A Day in the Life of a Financial Adviser.


For more information on the different paths to becoming a Paraplanner, including qualifications, exams and salary information, check out the Paraplanner Role Profile.

Read our Financial Planner Role Profile for information on salary expectations, entry requirements, exams, and where to look for vacancies.

Read another insightful article on ‘A Day in the Life of a Paraplanner’ to find out more information about the Paraplanner role.  

Read another insightful article on ‘A Day in the Life of a Financial Planner’ to find out more about information about the Financial Planner role.   

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