An old article. Good for the new holders. Weighing the pros and...

An old article. Good for the new holders.

Weighing the pros and cons of outsourcing paraplanning offshore

By Ben Power
June 8, 2016



Patrick Canion, the CEO of ipac Western Australia, outsourced paraplanning to an Australian service for a number of years.

But last year he decided to outsource back office administration and paraplanning to an offshore service provider, Intiger, which has offices in India and the Philippines.

His decision is part of a growing trend among both small and big adviser groups, including ipac, Fortnum, Countplus and AMP, to outsource and offshore paraplanning to reduce costs and free advisers for client work.

Canion says that financial planning firms are all facing additional compliance and documentation requirements.

“Clients don’t want to pay for it,” he says.

“You’ve got to find ways of making it work out some way.”

Ipac Western Australia spent six months performing due diligence on the Intiger service and started by giving them a simple administration process through Xplan.

No walk in the park

Canion says international outsourcing requires significant work. Ipac ramped up its documentation of work processes, which delivered additional efficiencies.

“It takes time,” he says.

“I don’t want to make it sound like a walk in the park.”

Part of the due diligence was covering ethical aspects of outsourcing.

“I didn’t want to be involved in supporting a sweatshop somewhere,” Canion says.

He is comforted by the fact the staff in India and Manila are some of the best paid people in their community.

“That was really important for me personally,” he says.

The offshore paraplanners perform all traditional paraplanning, including meeting preparation, updating account balances, policy analysis and data entry into Xplan. The only thing they don’t do is client contact or investment placement.

“Anything sensitive like that we make sure we have our hands all over it,” Canion says.
Ipac has dedicated people working for them in India and the Philippines, and they have built a relationship with them.

“It’s not like an anonymous service,” he says.
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Advisers can focus on what they do best

Ipac’s Canion says offshore outsourcing has delivered significant business results already.
“It’s allowed our team members to be more client focussed,” Canion says, which is more fulfilling for them because they’re performing work that “touches the client”.

Canion, who has since been asked to join the board of Intiger, has spent the savings on hiring another new business development adviser, and on marketing the firm’s services to win more new clients. He also restructured the office and replaced adviser assistants with client service managers. The move has also reduced costs.

“We only pay for the time they’re working for us,” he says.

“That shifts fixed costs into a variable cost base.”