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Meet the Paraplanners

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As if earning two bachelor’s degrees in three years wasn’t tough enough, industrious Adrienne Sadowski craved real-world work experience at the same time. So from her dorm at Pitzer College in Claremont, Calif., the pajama-clad student, via computer, held down a part-time gig with McGee Financial Strategies, an advisory firm in Portland, Ore.

“I’m oddly motivated,” says Sadowski, now 22 and a financial planning assistant with McGee’s independent practice, affiliated with Raymond James Financial Services. The paraplanner first started there at age 15 as an after-school file clerk.

Not all paraplanners are as enterprising as this one; but such support staff need to be on the ball indeed.

Paraplanners, a relatively new breed in the industry, are gaining recognition, increasingly, as cost-effective employees that add real value to a practice. They act as fact-finders, help put together financial plans and portfolios and are whizzes with financial-planning computer software. Some paraplanners even conduct investment research and meet with clients.

With today’s vital emphasis on quality staff and the baby boomer retirement boom already under way, it could be a major mistake not to hire a paraplanner — a.k.a., sales associate or junior professional, among other titles — as part of an advisory team.

“It’s silly if you don’t have a paraplanner to leverage your time and create some depth in your firm. There are just too many pieces in the business nowadays,” says Judith McGee, principal of McGee Financial, who has mentored several other young paraplanners in addition to Sadowski.

Though paraplanners are often CFPs and can even be Series 7-licensed — or beyond — many of these men and women have zero urge to become full planners at the helm of their own practices. Some, like Sadowski, do. But paid lower compensation compared to rookie advisors, paraplanners, usually preferring to stay behind the scenes, are a cost-effective alternative to employing newbie or experienced planners.

“If I hire a person who ultimately wants to run their own practice, I’m providing an awful lot of training to someone who [sooner or later] is going to leave me. But my paraplanner is content to help me grow my practice,” says Len Valletta, principal, Albany Financial Group, in Albany, N.Y., and affiliated with LPL Financial Services.

Maria Wells, 40, who joined Valletta last April, is a CFP and also has her Series 7 and Series 63 licenses, together with various insurance licenses. But “the idea of going out and finding individual [clients] has always been a little daunting to me,” she says. “Also, I’ve felt more comfortable with a salaried position versus one that’s commission-based.” Wells, however, was hired with the understanding that she’ll soon also be on an incentive program.

Many paraplanners, in fact, earn a salary plus bonus. Some, like Christine Stiles, in Williamsburg, Va., make commissions as well. Stiles, 48, has worked with top Wachovia Securities wealth manager Joe Montgomery, who consults or custodies about $10.3 billion, for nearly 16 years. An assistant vice president, Stiles has both Series 7 and 63 licenses and is a Registered Paraplanner and an Accredited Asset Management Specialist. The two latter designations are offered by the College for Financial Planning (, from which nearly 12,000 RPs have graduated.

But even with her impressive credentials and 26 years in the business, Stiles has no plans to move up to FC. “I already lose a lot of sleep. What I do is stressful enough!” she only half-jokes.

An Advisor’s Skills, Minus the Entrepreneurship

Super paraplanners boast a variety of talents, and excellent people skills are perhaps chief among them. “You know the game: It’s a contact sport,” says Montgomery, a managing director of investments. The FC is referring to offering clients premium-level service.

Not only does a crackerjack paraplanner need to be a people-person but he or she “has to communicate with clients in a way that mirrors or models the objectives or personality of the [advisor],” according to Jeff Moscaret, principal of Moscaret Investment Advisory, in Pasadena, Calif., and affiliated with Commonwealth Financial Network.

The FA’s paraplanner, Lance Hedgpeth, has drawn consistent client kudos for his personable manner. “That adds huge value to my firm,” says Moscaret, in the business for 20-plus years. “We try to present ourselves as very hands-on, very client-touch-oriented. Lance does that extremely well.”

According to Hedgpeth, 41, who is studying for the Series 7 — a license that will let him place trades and thus “relieve some of the burden on Jeff” — the client is always right. “Even though you may disagree, you have to appease them. I might voice my disagreement, but I try to be very diplomatic.”

Paraplanners must also have a keen appetite for learning, an analytic mind and good math skills.

In all, it’s the “desire to get it right, not just close to right,” notes Montgomery, an advisor for 31 years. “A paraplanner needs to be as near to error-free as possible because in this business, errors can be expensive.”

According to Valletta, “paraplanners should have the same technical skills as the planner. They have to have a lot of expertise. They have to be able to do almost everything the planner himself can do, but they needn’t have an entrepreneurial spirit.”

One big reason McGee likes to train qualified employees to be planners: “I’ve never been able to bring in people from the outside and have them understand our holistic style. I’d rather find someone with a great attitude who’s really intelligent and loves to learn, and train them. Also, you have to pay maybe double the salary to someone who supposedly has the experience. I just hired and fired a 40-year-old Series 24 because she couldn’t bridge her past experience with this office.”

For the majority of paraplanners, the main challenge is juggling a jillion responsibilities simultaneously — and being flexible enough to switch gears at a moment’s notice. “It’s prioritizing the numerous tasks that need to be done in any given day,” says Wells. “There are plans that have to be reviewed and prepared for meetings as well as the day-to-day stuff, like clients needing money and figuring out what funds to draw the assets from and doing a re-allocation of their account.”

Wells, who sometimes attends client meetings, works on projects that include dealing with retirement cash flows. She handles most of the prep work for client reviews, determining whether a plan needs re-balancing, checking on the current quality of money managers and bringing to Valletta’s attention financial planning issues previously discussed.

At the two-person Moscaret Investment Advisory, Hedgpeth, with the FA since 1992, says “the vast amount of multi-tasking can be difficult at times — but you just persevere. I call myself almost an operations manager: I have the role of office manager, client-services specialist, compliance [manager]; and I do financial planning analyses, help refine the plans, and prepare reports from scratch before Jeff meets with clients.”

Stiles, who began with Montgomery as a sales assistant, took the Registered Paraplanner and Accredited Asset Management Specialist courses purely to boost her knowledge. “Joe has his hands in everything from options to managed futures, hedge funds, exchange [traded] funds, no-load funds. So,” she says, “there’s a lot you need to know.” She holds her own meetings with clients to review statements and transfer assets. Last December she was swamped both with making sure certain clients took their required minimum IRA distributions and with last-minute gifting. “Every day I was constantly watching the biggest charitable organization account we have in order to get approval to sell.

“The most challenging thing is trying to stay one step ahead.” But “everything is pretty basic,” Stiles says of her duties. “You just need to know who to talk to. And you have to do it all quickly but correctly.”

Montgomery dubs Stiles the “business manager” of each of his teams. The FA’s entire group totals 11 people. For financial planning, she collects detailed client financial and lifestyle information, then works it into financial planning computer software. Montgomery encourages the paraplanner to converse with clients and follow up.

Not ‘All About Numbers’

Adrienne Sadowski, one of 15 on McGee’s team and on track to become a full financial planner, meets with each client from day one. Eager to “understudy” the advisor and become a planner herself, recalls McGee, Sadowski joined the practice full-time after college graduation. Today her job is devoted exclusively to financial planning.

Armed with a laptop, she takes notes at client meetings and serves up information, sometimes an opinion or two. “I create a kind of ongoing relationship and go back and forth between the client and Judith to get things done in an efficient manner,” says Sadowksi.

“Adrienne goes with me to every high-level meeting now. She’s learning by osmosis, [but] I’m force-feeding her as fast as I can,” says McGee, a financial planner since 1976. “She has a very amiable personality; and she’s our go-to, follow-through person.”

In meetings, McGee and Sadowksi typically mock up three different financial planning scenarios. Later they together present the reports to clients. At one recent meeting, McGee put Sadowski to a test. A middle-aged client wanted to retire early on $200,000 — and she was extremely fearful of investment risk. “The numbers would never work out over time if she followed her own advice,” notes McGee, who asked Sadowski to respond to the woman’s question concerning risk and expectations.

“Adrienne had to deal with the emotions of a 55-year-old who fears losing her assets but wants to leave her job,” says McGee. In answering the question, Sadowski’s premise was right, but she lacked assertiveness. “It isn’t all about numbers. Adrienne has to learn to emotionally connect the premise to the client’s fear,” says McGee.

As for Sadowski: “It was a little nerve-wracking being put on the spot. But,” she says, “it was definitely part of the learning experience. I’m sure there are going to be more and more” such situations.

Sadowski has completed the University of Portland CFP program and took the boards last November. “If I pass, I’ll go for my Series 7 right away,” she says. At the same time, the paraplanner will be gaining the additional 18 months’ experience she needs to earn the CFP credential.

Maria Wells, at Albany Financial Group, hopes to attend more client meetings with advisor Valletta, who has been in business 23 years. “I’m a much more people-oriented person than an analytical person,” says the paraplanner, who has brought to the party her own spheres of influence.

Valletti, having enlisted paraplanning help since 1998, says that hiring Wells has allowed him more time to grow his practice. “It frees me up. If I’m able to add even a few clients a year as a result of having a paraplanner, that really pays off in the long run.”

Does a standout paraplanner need to have the same fascination with the stock market as do many advisors? “Not at all,” says McGee. “That’s the least of it. More important is understanding how to generate a [financial planning] model that has a probable outcome, how people operate their financial lives, and what it takes to produce the kind of income over time that supports that life.

“They have to care about people. It takes empathy and also curiosity for the field, where they aren’t just bored to tears because they’re sitting in a room with all that detail and data. You can train for the task level, but,” adds McGee, “you can’t train for those other things.”


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