What Is a Paraplanner? A Tale of Two Career Paths

The College for Financial Planning—a Kaplan Company offers the Financial Paraplanner Qualified Professional^SM (FPQP^®) designation. That is certainly a verbose description, but what does it actually mean? What do paraplanners actually do? In this article, I answer that question and explain the two paraplanner career paths.

What is a Paraplanner?

In the simplest terms, the FPQP^® credential is an introductory professional designation. A candidate for this program is a person who is serious about starting a financial services career but may not yet have the experience necessary to run their own practice. Paraplanners are team players. The role of the paraplanner is to help make their chosen financial services team successful.

What Does a Paraplanner Do?

The prefix para actually comes from the Greek word that means beside. Paraplanners work beside financial planners. In their role, they are immediately immersed in the labyrinth of financial services. Para is also related to the latin word parare, which means to defend or shield. Paraplanners are usually on the front lines of client interactions. In many ways, paraplanners are the first line of defense in the client relationship. For the right person, the FPQP^® designation can be the gateway to a prosperous and satisfying financial planning career.

Generally speaking, there are two career paths that a paraplanner might choose. Type A is a transitional paraplanner. Type B is a career paraplanner.

Paraplanner Career Path #1: Transition to CFP® Professional

Transitional paraplanners have every intention of becoming CFP^® professionals themselves, but they do not yet have the years of experience necessary to earn the marks. They simply need to acquire some industry experience first. In other words, they need a way to earn their stripes.

for example, many years ago, a friend, I will call her Sue, called to invite me for lunch. “Sure,” I said. I knew her well. I assumed this was just another social call. Sue was between jobs. She was very talented, but the labor market was tight at that time. She had a master’s degree in marketing but no financial planning experience. She knew I was a financial advisor.

Over sushi, she announced, “Mike, I want to be a financial advisor like you!” A rush of emotions came to me. I was flattered and worried for her all at the same time. It often takes most people one to three years to get established in the field, and there are many, many sacrifices along the way. I also knew she could not go another year without a steady paycheck. “Okay,” I said, “let’s talk this over for a minute and look at your options.”

I went on to explain that her proposed course of action was fraught with risk. If she failed, and a high percentage of new advisors do, she might lose her house. “Why don’t you find an established planner first? Go work for them for a year. He or she can show you the ropes. If, after one year, you still want to be a financial advisor, go for it! You will have my full support. In the meantime, you can immediately start gaining valuable experience, learning about the industry, and, most importantly, earning a paycheck.”

My advice struck a chord with her. I think somewhere in the back of her mind she thought she could just go out, pass the Series 7, and instantly get rich quick. To be fair, that could happen, but for the vast majority of people, it is not that easy. I would describe Sue as a transitional paraplanner. She had the full intention of becoming a financial advisor herself someday, but she needed a way to break into the industry in a meaningful way. To her, the paraplanner role would have been a stepping stone.

Paraplanner Career Path #2: Financial Planning Support

Career paraplanners have no intention of owning their own practice. They are content to spend their career as “best supporting actors.”

I have another friend who I will call Michelle. Michelle had a well-established track record as an administrative professional. Before long, it would be time for her children to go off to college. She knew in her heart that she needed to prepare. She was looking for a way to set herself apart, increase her skills, and get a higher paying job. I recommended the FPQP™ program to her.

Independent planners often need administrative support. In fact, the larger their practice becomes, the more complex their administrative needs become. A planner will reach a point in their practice where they need someone who knows what they are doing. The planner is so busy meeting with clients that they need to be able to hand a client file off to their associate and say, “Take care of this for me.” These are tasks the planner would normally do themselves if they had time, but they do not. In much the same way that successful attorneys need a paralegal to run their practice, successful CFP^® professionals need paraplanners who understand the business at a higher level.

Go Further on Your Career Path with the FPQP® Mark

No matter which career path they take, professionals who earn the FPQP^® designation are worth more to their employers because of their specialized skill sets. Paraplanners with the FPQP^® mark are trained in the fundamentals of the financial planning process. They are taught the language of financial planning: business ownership, cash management, debt, time-value-of-money, and the basics of insurance. Paraplanners are also expected to comprehend investment basics, retirement planning, and the rudiments of taxation and estate planning.

The FPQP^® program communicates these complex concepts to candidates on an introductory level that is easy to understand. Make no mistake, the FPQP^® is an arduous program. This is not a weekend seminar. The program includes 100 - 125 hours of required education and, like many professional designations, has a continuing education requirement.

If you are fresh out of college and looking for your first position in the financial services industry, the FPQP^® program may be right for you. Likewise, if you are a career administrative pro looking for a way to distinguish yourself and acquire additional skills, you may also be a good fit for the FPQP^® program.

Ready to Get Started?

If you’d like to learn more about the FPQP^® designation, this article has all the details. You can also sign up for FPQP® education courses.

Written by Kaplan experts, reviewed by Michael Angell, CFP^®, EA. An associate professor at the College for Financial Planning—a Kaplan Company, where he serves primarily as the in-house income tax planning subject matter expert. Michael began his financial services career in banking over 20 years ago and eventually migrated into investment management and insurance planning. He has served clients in various capacities with independent, boutique-style firms and learned directly from seasoned CFP^® practitioners in the field. Michael has also been an income tax professional for several years.