Clockwise from top left: Andrew McGrath, Corey Wastle, Troy Theobold and Amanda Cassar

Behind closed doors, the industry widely acknowledges that outsourcing saves costs and helps overcome the labour shortage against the backdrop of more regulatory requirements.

But the pros and cons of hiring outsourced or even offshored paraplanners is widely debated in the financial services industry. For some, it’s a great way to overcome cost pressures on the business, as well as a way to avoid competing for talent, while other firms see the risks of doing so as being too great.

RFS Advice certified financial planner Troy Theobald admits that each side will have strong opinions on whether you have internal or outsourced your paraplanners.

He keeps his paraplanners right where he can see them in the office, which helps him manage the natural ebbs and flows of business. “You need to maintain the ability to do this internally as well in my opinion,” Theobald says.

“There is no doubt the use of an offshore approach takes time and effort and for someone to drive the process. The providers say it is easy. I’m not sure on that, and security of data is always a worry. With QAR [the Quality of Advice Review] potential to change the advice process again that would be the time in my opinion to reassess the merit of both approaches.”

However, offshoring is a valid business practice, he says.

Verse Wealth has been working with Philippines-based paraplanners since 2018.

“If you have rigorous consistency with your client experience, research process, strategy preparation and communication,” CEO Corey Wastle says. “For us, it’s very much a method built on quality in, quality out.”

Verse launched a “Summary of Advice” recently, which has removed a lot of the complexity that traditionally lives in a Statement of Advice, reducing the word count from 15,000 to 3000 words. This has made paraplanning a faster-simpler and easier task, Wastle says.

Windsor Advisory outsources its administration, client servicing and low level paraplanning to a dedicated resource in the Philippines via an Australian-owned company.

“We prefer offshore for more low-level labour-intensive lower value add work and local contractors for more sophisticated planning needs,” Windsor Advisory certified financial planner Andrew McGrath says.

“But in both cases I find you get out of it what you put into it, relationships are key.”

His firm uses a full time dedicated resource with a strong work ethic, and it works well for him. “It’s thorough and cost effective, with [outsourced paraplanner business] 5 Elk taking care of all the local issues, employee training and engagement,” McGrath says.

For more complicated paraplanning, SOA preparation and modelling, he outsources on a job-by-job basis to an Australian company called InWealth.