The myths of outsourcing

It is a known fact that the demand for high-quality paraplanners is currently outstripping supply as  firms increasingly realise the value of partnering with well-qualified and technically-strong individuals who can free up the advisers’ time to build the business, bring in more revenue and help more clients achieve financial independence.

With a limited pool of quality paraplanners, recruiting and training the right candidate is both time-consuming and expensive and there is no guarantee that the individual won’t be lured by the prospect of a higher salary, better benefits or a shorter commute in a few months’ time, leaving the business in the same (or potentially worse) position than before.

Outsourced paraplanning is often the answer and can offer a perfect solution for most businesses. The service can be provided almost immediately (compare this to the length of a standard recruitment process), at no initial cost (think recruitment fees, new joiner expenses, and training costs plus all the ongoing costs), and allows access to a highly-qualified team who are in it for the long-term.

Having worked for many years as an in-house paraplanner in a variety of models, some more successful than others (but let’s leave it for another time), I  made the transition to outsourced paraplanning in 2017 and have since talked to a number of advisers and paraplanners about the benefits and challenges of both.

What surprises me every time are the misconceptions about outsourced paraplanning that those who never worked with a freelance paraplanner seem to have somehow formed. So let me tackle just a few of those.

Myth 1: It’s a short-term fix for firms who struggle with the volume of work

This couldn’t be further from the truth. Outsourcing works at its best as a long-term solution. We get to know your firm, your advisers and your clients. Over time, we simply become a part of your team, although you may not see us every day, we don’t (usually) frequent your Christmas parties, and you pay our invoices, not our salaries. 

Our clients don’t struggle with the volume of work. They send us a larger number of cases when they’re busy, and fewer when they have a quieter month.

If your team cannot cope with their workload, do you try to address this by hiring yet another paraplanner? The chances are that by the time you find the right candidate and train them sufficiently to add value to your business (“hitting the ground running” is another common misconception) workload has doubled, clients have been left waiting, and another paraplanner has handed in his or her notice.

Trying to get an outsourced paraplanner to write a few outstanding reports and then returning to the status quo is like trying to fix a leaking pipe with duct tape. But having a trusted outsourced paraplanner on a monthly retainer to deal with the overflow of cases in a timely and efficient manner will provide a sustainable, long-term solution that is bound to cost the business less than adding another full-time paraplanner to your team.

Myth 2: It only benefits newly set up or very small firms who cannot afford a paraplanner

Outsourced paraplanning is successfully utilised both by small and newly set-up businesses, as well as established or larger firms. There is nothing stopping larger firms outsourcing their research and report writing. In fact, outsourcing can significantly cut fixed costs, which should in turn see the cost of advice falling and profits increasing. And all firms could benefit here, not just the smaller ones.

While at Navigatus we choose to work with smaller firms and only take on a handful of clients at a time, there are several large outsourced paraplanning providers out there who have both the experience and the capacity to deal with larger firms, including networks and nationals. If you are a multi-adviser company looking for an outsourced provider, we will be happy to point you in the right direction.

Myth 3: It only benefits process-driven businesses who want to outsource repetitive functions

In our experience, it’s quite the opposite. Heavily process-driven firms, who may perhaps offer a limited range of services, will more often than not rely on a report-writing software or existing administration staff putting together templated reports, rather than outsourcing this type of work.

Our services are in particular demand when a more bespoke work is required or when an in-house paraplanner does not have the experience or knowledge to deal with a technically-challenging case. 

We don’t churn out reports – in fact, this phrase is banned in the Navigatus HQ. We write bespoke and highly-personalised advice letters to help our advisers deliver the highest level of professional service to their new and existing clients.

The benefits of outsourcing

Sadly, many of these myths and preconceptions are created and spread by in-house paraplanners who feel threatened by the growth in the outsourcing sector. Fortunately, an increasing number of firms and advisers realise the wealth of knowledge and experience they can access by tapping into an outsourced paraplanning service.

What about the benefits, you may ask. There are many, but our clients invariably value us for:

  • Our technical expertise – gained working on a much wider spectrum of cases than those encountered by a typical in-house paraplanner.
  • Our flexibility – we rarely stick to the conventional 9-5/Monday to Friday schedule and we have qualified staff available at all times.
  • Our versatility – we work with a number of advisers and firms who all do things slightly differently. We can effortlessly adjust to your processes.
  • Our honest opinion – we work with you, not for you. If we don’t agree with something or can suggest a better way of doing things, we will politely say so.
The myths of outsourcing
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