In our last article, We outlined why it might be a good idea for your practice to consider partnering with a specialist provider for your paraplanning and ongoing advice service requirements. In this article, we want to let the numbers speak for themselves.
We have realised over the years that many practices only consider the salary of an in-house paraplanner when assessing the costs and feasibility of an in-house operation. They do not take into consideration many related costs which nudge up their overall expenses.
In this article, we’d like to unravel the true cost of an in-house paraplanning operation, and compare it to available alternatives such as partnering up with specialist providers.
What is a reasonable estimate for the cost of my in-house operation?
To begin with, let’s look at how much you will be paying as annual wages for a single in-house resource. A quick internet search revealed that the average annual salary for a paraplanner in Australia is $77,800.
However, this does not include costs such as Superannuation Guarantee Contributions (SGC), licensing, the cost of additional space, electricity and other sundry expenses that are required to run an in-house operation. Insights provided by an established practice in Sydney revealed that these costs alone can be as high as $25,000 per year – driving up the annual cost of a single paraplanner to well over $100,000.
How much am I getting for what I’m spending?
We know that employing a single in-house paraplanner costs a practice approximately $100,000 annually – but how many SoAs does this translate to? We can derive these insights through a quick back-of-the-envelope calculation.
- An 8-hour work-day with an hour’s break each day for lunch, meetings, etc. – leaving a total of 35 productive hours for the week.
- A 90% efficiency rate due to factors such as distraction and fatigue (we are all human!). This leaves us with 31.5 productive hours each week.
- 48 operational weeks in the year, taking into consideration holidays and leave.
- An average SoA completion time of 9 hours – being the average of a sample of simple, standard and comprehensive SoAs completed by Planlogic in the recent past.
Now let’s punch in the numbers:
- Total operational hours available annually: 31.5 hours per week x 48 operational weeks = 1,512 hours per annum.
- Total number of SoAs completed annually: 1,512 hours / 9 hours per SoA = 168 SoAs per annum.
How does this compare to partnering up for your paraplanning needs?
According to our quick calculation, spending $100,000 on a single in-house paraplanning resource will result in an output of 168 SoAs annually – but how does this compare to partnering with a specialist provider for your SoA production?
Using a sample of a combination of simple, standard and comprehensive SoAs produced by Planlogic, we arrived at an average cost of $440 per SoA. This means that $100,000 spent on partnering up for your paraplanning requirements will result in an output of 227 SoAs annually – close to 60 more SoAs than if this money was spent on a single in-house paraplanning resource!
This drives home that it is important to consider all related costs when assessing the feasibility – and subsequent efficiency – of an in-house operation. This also does not take into account the additional effort required to maintain an in-house operation in terms of constant oversight, hiring and training staff, dealing with leave and resignations and the burdens of regulatory compliance as outlined in our last article.
While taking the leap to partner with a specialist provider is not an easy one, it is definitely an option worth considering. We would love to hear from you, and help you run your practice as efficiently as possible. If you would like to know more, book an appointment on our website or email our Head of Partnerships, Jay Beckton (firstname.lastname@example.org) and we will get in touch.