Cost Savings - An Example
In order to consider the cost savings for your business, we will have a look at a typical scenario that we encounter.
Tom is an adviser in Sydney who works in partnership with one other adviser. They have hired one full-time administration staff member and are deciding whether to hire a paraplanner or consider an outsourced paraplanner for the role. Their only other point of reference when considering freelance paraplanning is a colleague who had tried hiring a local trainee paraplanner to "work part-time, after hours on his plans". The experience was terrible as the trainee, although charging a low hourly rate, would often send Statement of Advice documents back half-completed & several days late.
When looking at the typical paraplanner salary, they saw that they would need to offer a salary of $70,000 per annum in order to ensure they hired a paraplanner with relevant experience. When factoring in superannuation, sick leave & holiday entitlements, ongoing paraplanner training costs, software license costs, office furniture etc, they were looking at an additional 25% cost, bringing the total cost for an in-house paraplanner to $87,500 per annum (or $7,290 per month).
Let's now compare this cost to that of a contract paraplanner for this Sydney adviser. You will need to keep in mind the following tasks that an outsourced paraplanner cannot perform:
Although the above tasks cannot be performed by an outsourced paraplanner, we have seen many examples of offices that have their staff structured to ensure these tasks are performed at a lower cost.
For the cost of paraplanning using a contract paraplanner, we will assume the following about Tom and his partner:
Based on the above assumptions, the cost for four SoAs per week, at a cost of $297 per SoA, would cost $1,188 per week. This would equate to $57,024 per annum for a contract paraplanner (based on 48 weeks as you would not need to pay your outsourced paraplanner whilst you are on holiday), with a potential cost saving of over 30% per annum.
Flexibility & Scalability
The biggest problem that we hear from advisers is what to do when they need 1.5 paraplanners or 0.5 paraplanners. You may not need to take on another full-time employee but your choices would be:
All of the above options are valid and are in place with many financial planning practices in Australia but they don't give you the flexibility and scalability that you need.
Contract paraplanning provides the following advantages in terms of flexibility and scalability:
We Need (and want) to Provide Exceptional Service
As an adviser and/or business owner, you understand that the level of service you provide determines if you keep or lose a valuable client. As contract paraplanning businesses providing a service, we are aware that your expectations are high for us to provide compliant Statement of Advice documents yesterday...or at least in a reasonable timeframe to suit your next client appointment. Many of our paraplanners have previously been advisers and know the expectations of needing each part of the process to flow as seamlessly as possible.
The best way to see if we deliver on our word is to trial our service.