The Paraplanners

Work experience at The Paraplanners Wed 4 Nov 2015

James is 16 years old and started his first year of A-Levels in September 2015, studying Economics, English, Maths and Classics.  He has an interest in the financial planning/investment industry and asked The Paraplanners if he could spend his week off at half term learning from us on what we do, how we do it and the way we run our business.  We were delighted to oblige and found James to be an excellent, bright and fun addition to the team that week. 

We asked him to share a few thoughts with us on his experiences during his time with us and his perception of our industry, from the point of view of a young person that has never experienced financial advice before.

My week at The Paraplanners

This past week I’ve had the opportunity to work with, and see the inner-workings of, the incredible group of people known as The Paraplanners - warts and all.

As I’m a fresh pair of eyes to the financial industry I’ve been set the slightly daunting task of writing about my experiences over the week. This kind of thing is very new to me, but I can promise it will be honest and – just to keep Kat happy - the text will be justified perfectly. 

I’ve learned a huge amount in this one short week. When I started on Monday I barely knew what a pension was; now I can tell the difference between a SIPP and an occupational scheme, an OEIC and an investment trust (which is apparently similar, but different…). 

My week started with a brief crash course on finance and the industry as a whole.  To be honest, I was slightly overwhelmed. Before I started I thought that there was one type of pension and one way to invest - and that was it. Dear God, was I wrong. 

It seems that there are dozens of different types of pension and a thousand different ways to invest your money and all of them seem to do basically the same thing but behave in different ways and give you access to the money at different times. After that, there are all the other tax wrappers that you can put those investment into, which in turn behave similarly but are all subject to varying tax treatments. It’s all very confusing when you’re looking at it for the first time. 

After this whistle-stop tour of finance, we had a ‘team call’ by video at 9:30am. Despite Skype causing some issues at first, this was a great opportunity to get to know the team and talk about our work for the day.  The team call is a very rare chance for human interaction when working from home.  As I soon learned, it is easy to go stir-crazy being cooped up in a small office all day so the team call was a fun way to share thoughts and ideas with the rest of the company. 

Video calling was a strange experience. I was sitting at home but able to talk to all these people from all over the country, in their own homes.  It’s just like being in an office, but over the internet.  It’s extremely efficient. The whole team seemed unnaturally cheerful for a Monday morning (I was still half asleep – they start early) but they were very welcoming of me, which was nice. We discussed our weekend’s exploits and our plans for the day and then signed off and quickly got to work. 

I was introduced to a wonderful system called FE Analytics, which is a database of thousands of different investments that you can invest in. I thought it was an incredibly useful piece of software, but the investments within it are hugely confusing and over-complicated. 

For example, to invest in a fund you had to pick what investment manager you wanted, then trawl through the hundreds of different funds to find your one.  You then have to see if it’s a ‘clean’ or a ‘dirty’ share. Each company will have its own share class to show this, but it’s not immediately obvious what the differences between each of these share classes are and what impact these have on the fund. 

Furthermore, it seems that the industry is littered with instances where there are at least two or three different names for the same thing – for example,fact-find, financial review form, know your client document – they’re all one and the same, but called different things by different people, depending on where you work.  It’s hard to keep up.  It’s as if the industry wants people to be confused. Wouldn't it be easier if there was a universal language of finance which everyone used and understood? 

After some training on FE Analytics, I started working on ‘cost comparison’ research for a suitability report that needed completing.  This consisted of staring in a somewhat confused state at an Excel document full of numbers and knowing that something should be happening with cell D3 to make it into the same number as cell E5 and then somehow those two numbers magically become cell G6. 

After this week, Excel has become something I’ve come to hate profusely, however I can’t help but appreciate how useful it can be when working with numbers. My mind was blown by the huge formulas I was using, so when I saw that Excel could do these calculations with a relatively simple formula, I was thrilled. 

This meant that instead of sitting with a calculator and a notepad manually working things out, I could just put a few numbers into the spreadsheet and out came my answer - simple as that. The company has so many of these different spreadsheet calculators in Excel, but what really impressed me was that all these calculators has been created by The Paraplanners themselves, which they then shared with each other in a document ironically called“Simple Tools and Calculators”. 

It was systems and ideas like this that really stood out in my mind when working with The Paraplanners.  The amount of innovation within the business is amazing. 

As the week progressed I saw more and more suitability reports and even got to write a few of my own (with a little help from Kim), plus undertake some cash flow planning with Claire, that I have now used to help determine my own financial future and work out how much money I need to get myself through university. It’s a scary amount, but I’m glad I have the chance to prepare myself for it now.  Not many people in my position get to have that insight. 

The actual preparation of the financial plans was easily my favourite part of the week; it allowed me to see through a very large window into a complete stranger’s life. I could see their whole (financial) position all in a few pages and I saw things about these people that probably even their best friends and family didn’t know. Using things like the Moneyscope cash flow graphs, we could predict their financial wellbeing many years into the future. It was truly staggering. 

One of the most amazing things I found out about when working in finance was that people like financial advisers and paraplanners are in the unique position of having people come to them and be, usually, entirely open and honest about their whole lives.  Everything will be put on the table; any secrets or lies they’ve told their family are openly disclosed to these ‘strangers’. 

The clients have complete trust in their advisers to deal with their finances; however this clearly comes with great responsibility. When you are dealing with these peoples’ livelihoods there is an enormous pressure to get things right, because any small mistake could potentially ruin someone. If you give that person the wrong advice, maybe to invest in a certain share or fund, and it goes wrong, you’re to blame. Things like this make the job very interesting to me, but also glad that it is such a highly regulated industry. 

My week with The Paraplanners eventually came to an end and by 6 o'clock on the final day I was mentally completely broken. My brain was full of pensions and unit trusts and I could barely say my own name.  How people do this week in and week out, I don't know! 

I thoroughly enjoyed working with The Paraplanners and would like to thank them all for their time and support throughout the week. It was a great opportunity to work with these amazing people and I'm very grateful for the chance to see how the business runs.  I would love to return to them in the future to build on what I’ve learned so far.

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