Paraplanner vs. Financial Planner: What Are the Differences?

A paraplanner is a professional who provides support to financial planners. If you’re interested in a career in financial planning, becoming a paraplanner may be a good option. In this article, we compare the job titles of paraplanner and financial planner, and we discuss the similarities and differences between the two. We also provide information on the education and skills you’ll need to pursue a career as a paraplanner or financial planner.

What is a Paraplanner?

Paraplanners are administrative professionals who support financial planners in the development and implementation of financial plans. They research and analyze data related to a client’s financial situation, such as investments, taxes, insurance and retirement plans. Paraplanners also prepare reports and presentations that summarize their findings and recommendations. In some cases, paraplanners may provide direct support to clients, such as helping them to fill out paperwork or track their progress towards financial goals. Paraplanners typically work in financial planning firms or banks.

What is a Financial Planner?

Financial Planners help individuals and businesses create long-term plans for financial security and stability. They assess their clients’ current financial situation and develop strategies to help them reach their financial goals. This may include investing in stocks, bonds or other securities, saving for retirement or college tuition, or planning for major life events such as buying a home or starting a family. Financial Planners also help their clients manage their day-to-day finances, such as budgeting and paying bills. They may also provide tax planning advice and help their clients file their taxes.

Paraplanner vs. Financial Planner

Here are the main differences between a Paraplanner and a financial planner.

Job Duties

Financial planners and paraplanners share some of the same job duties, such as gathering financial information from clients, creating financial plans and advising clients on their options. However, a financial planner is typically responsible for more in-depth tasks than a paraplanner. For example, a financial planner may create detailed financial plans that include asset allocation recommendations, while a paraplanner might assist the client with implementing the plan by providing them with educational resources or reminding them of upcoming deadlines.

Another key difference between these two professions is that paraplanners often work within a larger team of professionals to provide support to clients. Paraplanners are sometimes part of a department called wealth management or advisory services, which also includes accountants and investment advisors. Conversely, financial planners tend to work independently with their clients.

Job Requirements

Paraplanners typically need to have a bachelor’s degree in a business-related field, such as finance or accounting. Some paraplanners also pursue certifications through organizations like the Certified Financial Planner Board of Standards (CFP). The CFP offers a certification program that requires paraplanners to complete an exam and adhere to ethical standards.

Financial planners usually need to have a bachelor’s degree as well, but they might need to have a master’s degree to enter more advanced positions. They can pursue degrees in fields like finance, accounting or economics. Financial planners must also pass the Certified Financial Planner (CFP) exam before they can start working with clients.

Work Environment

Financial planners and paraplanners work in different environments. Financial planners typically work in an office setting, where they meet with clients to discuss financial goals and create plans for them to achieve those goals. They may also travel to meet with clients or attend conferences related to their field.

Paraplanners usually work in a more clinical environment, such as a hospital or nursing home. They often work directly with patients to help them understand their finances and plan for the future.

Skills

Paraplanners and financial planners share several skills, such as critical thinking, analysis and research. They both need to be able to understand complex financial concepts and use them to make recommendations to clients. Paraplanners also benefit from having strong writing skills to create reports for clients, while financial planners need excellent communication skills to explain their recommendations to clients.

Paraplanners typically have more of a focus on the administrative side of financial planning, such as preparing reports and organizing client files. Financial planners, on the other hand, spend more time meeting with clients and developing relationships. As a result, financial planners need to have strong interpersonal skills, while paraplanners can benefit from being detail-oriented and organized.

Salary

Paraplanners can earn an average salary of $54,190 per year, while financial planners can earn an average salary of $72,474 per year. Both of these salaries may vary depending on the size of the company at which you work, location of your job and the level of experience you have prior to pursuing either position.