Commit to improve this year

Make 2019 your year for significant self development, because you never know what's around the corner, says Jacqueline Lockie CFP™ Chartered FCSI, CISI head of financial planning

According to the exercise data software provider, Strava, 18 January was the day most of the world gave up their New Year’s resolutions. They collect exercise data from millions of people globally and this year they’ve started looking at the trends. You might be interested to know that in 2018 we all gave up our New Year’s resolutions on 12 January; so, it seems we have a little more willpower this year. Is this you? I’m still sticking to mine, so far anyway.

Looking globally, we’ve seen a big step-change in the qualifications required to be a financial planner in Australia. Some UK commentators have voiced their view that the FCA should implement the same sort of thing here. Don’t know about you, but I’d not be particularly happy to be forced to go to university to pass more exams to ‘prove’ that I have sufficient technical knowledge. I had an interesting debate with a friend from Adviser Ratings, Australia this week about this. My observations were that technical knowledge was all well and good for the profession, but, and it’s a big but, technical knowledge is only part of the picture. We all need to be able to apply this technical knowledge in a reliable, structured fashion. The benefit of doing this is to aid understanding and give a better service to clients and a side effect would be to demonstrate compliance with regulatory requirements for product advice. A structure like this would help planners build a sustainable financial planning business as well.

However, there is one job role that seems to be under threat globally; that of paraplanning. There is much discussion in Australia at the moment about the impact of the qualification changes on financial planners’ businesses and the knock-on effect that many who are coming up to age 60, are saying that they will retire now rather than take five years of hard work at university, only to retire at 65. I can see their point.

Threat to paraplanning With more businesses being wound up or sold, and the increasing use of artificial intelligence (AI) and development of more sophisticated software for analysis, we've seen global commentary about the reduction in need for paraplanning roles.

I’m not sure I agree. My reasons are as follows:
  1. AI cannot research all the different products and investments that clients have and understand the nuances about why the clients made those decisions to buy/sell a particular product at the time. Quality of data that goes into any software system needs to be 100% accurate. AI certainly cannot do that right now. AI will certainly improve business efficiencies and drive down costs to clients.
  2. AI cannot ‘listen to understand’. I expect it is learning this, but as we’ve seen, AI robots have limited capabilities at the moment.
  3. Yes, some businesses will be dissolved, and others will be sold with staff possibly made redundant, but those clients still need a good level of service, so where does that come from? I don’t think planners can do all that is required alone.
  4. Skills is where I see the biggest difference. A paraplanner’s role is not just about inputting accurate data. We have skills, a thought process to apply to help understand clients and get the best outcomes for them. Now you might argue that AI could also get the ‘best’ outcomes. But as we know, the best outcome isn’t necessarily the most financially efficient outcome.

    So, if you have given up your New Year’s resolution already and it included improving your skill set, commit to start afresh and make 2019 a year for significant self-development.

This article was originally published in Professional Paraplanner February 2019. Republished with permission

Published: 28 Feb 2019
  • Financial Planning
  • Professional Paraplanner
  • listening
  • active listening

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