12th June 2025
Should Paraplanners Be More Formally Recognised by the FCA?
The FCA Register currently lists over 72,000 registered firms, including 38,000 Investment Advisers, 34,500 Mortgage Advisers, and 11,600 individuals responsible for Compliance Oversight. Across these firms, the Register supports over 90 categories of regulated activities that individuals may be assigned to , and yet there is no specific category for “Paraplanner.”
This absence is notable given the Senior Managers and Certification Regime (SMCR), introduced to ensure that individuals in roles capable of causing significant harm to a firm or its customers are appropriately certified, competent, and accountable. Firms are required to conduct annual assessments for individuals in scope, with the aim of protecting consumers and upholding professional standards.
Given the increasingly influential role that paraplanners play in the advice process - from research and analysis to report writing - it raises a question: should paraplanners be more formally recognised by the FCA?
In a Panacea survey, a number of advisers expressed the view that paraplanners should be included in the Register. Some voiced concerns about the implications this might have, particularly for firms that outsource their paraplanning services. Among the comments:
“If paraplanners are ever required to be FCA regulated in the future, I can see the outsourced profession collapsing as many simply won’t be able to afford to continue without significantly increasing our fees.”
“The professional indemnity cover and capital adequacy requirements would make things more difficult, particularly for smaller firms.”
“There is potential for advisers to be exposed to retrospective risk - especially if something goes wrong and there is no clear regulatory accountability for the paraplanner.”
At present, there is no designated SMF or certification category for paraplanners, and when the FCA was approached for clarification, it could not confirm where they would fit within existing classifications.
One solution could be to introduce a specific FCA Directory category for paraplanners, supported by a mandatory annual competency sign-off process. This could improve clarity without necessarily placing the full burden of Senior Management Function (SMF) responsibilities on individuals who are not business owners or senior decision-makers.
It is worth noting that many outsourced paraplanning firms are not authorised, though some clearly state that they are not responsible for the advice - presumably with further clarification covered in the adviser firm’s own Terms of Business.
Whilst many paraplanners are highly qualified, often to Level 4 or above, the current lack of formal registration leaves a grey area around oversight and accountability.
So, what do you think?
- Should paraplanners be more formally recognised under the SMCR or within the FCA Directory?
- Would increased oversight help improve client outcomes - or risk adding unnecessary cost and complexity?
- How would regulatory formalisation impact the paraplanning profession?
- Could formalisation be seen as a way to elevate status, rather than simply as a compliance burden?
Many paraplanners have expressed a desire for their work to be recognised as a profession in its own right, rather than simply a support function. Formal recognition could support that aim, reinforcing standards, career pathways and professional identity.
We’d welcome your thoughts — whether a paraplanners, advisers or compliance professional — on how best to strike the right balance.
Just answer let us know your thoughts to the above questions below.
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