Richard Allum, managing director of The Paraplanners, says that outsourced paraplanning firm The Paraplanners has been receiving an increasing demand for its outsourcing administration services.
Allum claims that the company set up the administration capacity to support its Paraplanners and started offering it to clients who use the outsourcing paraplanning service three year ago. The firm is increasingly being requested by adviser firms to provide outsourced administration as an independent service.
Allum states that they are now working with twice the number Outsource admin of firms than we were last year, and providing an administrative service. Allum admits that these numbers are not as high as the paraplanning firms, but he believes they will continue to increase. Outsourcing is now a commonplace rather than an exception. Outsourcing is becoming more common in the modern world. Firms outsource fund management, accounting, and paraplanning.
Harrison said that there was also a phase when there was a lot of demand for administration. She believes this will continue as more advisers get comfortable with outsourcing. She says that once an adviser feels comfortable outsourcing a part of their business, they will likely look at outsourcing another. A single firm can manage your paraplanning or administration, which is a great way to get better communication and consistency. Outsourcing will continue to grow as technology improves. Services such as outsourcing admin are sure to reap the benefits.
Allum states that advisers are easily drawn into administrative tasks, such as time spent on back-office platforms or waiting for support by a provider. This is what Allum and his team call “lulled into voluntary administration”. Allum states that the answer is outsourcing.
Allum states that most firms who use outsourcing for administration are small businesses with one or two advisors. They end up handling the admin, which takes away from their main job of advising clients and seeing them. They may also hire someone who is not being used.
Allum says that outsourcing to professional firms means you will get experienced, qualified people who understand the intricacies of adviser administration. They are familiar with the back-office platforms, processes, and procedures. This is something that small businesses wouldn’t be capable of obtaining if they tried to hire them themselves.
“A good administrator is worth his weight in gold. They are an integral part of the team. Without good administrators, our business wouldn’t work as well,” Allum states.
Paraplanners charge an hourly rate of PS30 per hour. Allum points out that advisers pay only for the services they use. It’s easy to use – you only need it when you do. This makes outsourcing extremely cost-effective.