Paraplanning has traditionally been viewed as a gateway to becoming a financial adviser, but research shows that it is becoming a profession in its own right.
Quilter Financial Planning surveyed 120 paraplanners and found that 77% of women in the profession do not want to become financial advisers compared to just 38% of their male peers.
The data found that just 6% of female paraplanners said that they would like to go on to become a financial adviser while 17% said ‘maybe’.
Conversely, 41% of male paraplanners said that they would like to become a financial adviser with 21% saying ‘maybe’.
Misconceptions
Mark Pittaccio, business consultant and behavioural economist at Quilter Financial Planning, said: “The research shows that, even when individuals are attracted into the industry, the decision to become an adviser is heavily biased towards males.
“Surveys of financial adviser communities have shown that misperceptions about the nature of financial planning, particularly amongst women, strongly affect their interest in becoming financial planners.
“There continues to be a perception that advice requires strong sales skills and, therefore, revealing that advice is instead far more about creating long-lasting relationships with clients may help attract more women to the advice profession.
“It is incredibly important that we breakdown whatever systems are in place that are contributing to these differences in aspirations and ultimately improve the profession.
“One of the points we need to address is the vicious circle where women see fewer visible role models in the profession as they are underrepresented and then are less likely to a pursue a career in the sector. Breaking this cycle will go some way to helping to improve the diversity of the profession.”
Complacency
Matthew Connell, policy and public affairs director at the Chartered Insurance Institute (CII), told International Adviser: “Over the last 20 years, the personal finance profession has made huge progress towards giving holistic, client-centric advice that is about meeting all the client’s financial needs, and not simply about recommending a product.
“Paraplanners have played an enormously important role in this evolution, and it is entirely understandable that paraplanners take pride in what their profession has achieved and want to progress within that field.
‘However, we shouldn’t ever be complacent and we should be asking whether female paraplanners are actively choosing to stay within this specialism, or if they are simply sticking to that path because the financial advice specialism has not been made sufficiently attractive to them. I think this is a challenge for the entire financial services community, including our regulators.
“For example, financial advice firms have often been put in a position where they take on enormous liabilities for advice given, with providers stepping back from the provision of advice in order to minimise their own liabilities, and regulators increasing potential liabilities for well-run firms through the structure of compulsory professional indemnity insurance and the Financial Services Compensation Scheme levy.
“Given that many advisers would hesitate to recommend this level of liability to members of their own family, it is perhaps not surprising that groups that are under-represented in the financial advice specialism are particularly sceptical about moving into this space.”
