SMCR & paraplanners
Our compliance teams' guidance on this is currently that outsourced paraplanners will not be subject to certification but in-house paraplanners are likely to be. This is based on section 5.2 of CP19/04
What guidance have others had and what is your firm's approach regarding paraplanners?
Paraplanner. F1, Apple, Nutella, ice cream. No trite motivational quotes. Turning a bit northern.
Comments
Working on this just now and I'm looking at the possibility of ours being certified. Still more digging to do but interesting that outsourced won't be. Significant harm?
@Suse1969 I don't think there will be any harm. I can't see how outsourced could be included as we have no discretion or direct client involvement. Some might see it as an advantage ;-)
Paraplanner. F1, Apple, Nutella, ice cream. No trite motivational quotes. Turning a bit northern.
I don't see how an outsourced paraplanner could ever be subject to it? You can't outsource the responsibility for a function.
Can you think of a specific example of something an in-house paraplanner might do that would give rise to the need for certification?
I know of some in house paraplanners that are CF30 so do sometimes give advice.
With regard to discretion, are you talking about the recommendations? I have some discretion about some of them within my own firm. Do outsourced planners have that same discretion or does the adviser tell you what they want and the funds they want to invest in (do you have any input on that part of the process)?
Some in house PPs may have discretion over the timing of a trade for example.
Paraplanner. F1, Apple, Nutella, ice cream. No trite motivational quotes. Turning a bit northern.
Yes, that's what I meant - I don't think outsourced would come under that banner but in-house would.
In relation to chapter 5 in PS18/14 on Conduct Rules (which the current CP is trying to 'optimise' #marketing):
Yes this will apply to almost every employee of a firm (but if you're a member of a professional body then you're already agreeing to very similar conduct requirements). It could apply to certain outsourced paraplanners, but only in the very specific circumstances where they fall within the definition of employee as set out on page 46 (attached).
Regarding the section in the CP on amending the scope of the client dealing function I think this could catch the paraplanners who have authority to produce the recommendations, which the adviser then delivers. But mostly this will remain the responsibility of the adviser, or that of the people designing the decision making framework within which the paraplanner acts.
I don't agree with timing of a trade. That's in the best execution policy, so there is no discretion in my opinion.
Good points. Not as clear as I'd like. Will feedback when we get more from our compliance people.
Paraplanner. F1, Apple, Nutella, ice cream. No trite motivational quotes. Turning a bit northern.