Paraplanners positive on potential of AI

10th September 2024

Paraplanners increasingly see Artificial Intelligence (AI) as having the potential to transform the financial planning service they offer customers, according to Scottish Widows’ latest research.  

In its annual survey of 200 paraplanners from across the UK, Scottish Widows has revealed that this group increasingly sees the potential of AI in making their workloads lighter, dispelling myths that it will replace their jobs.  

64%¹ of paraplanners believe AI tools will be useful in their role up from 42% a year ago. This rises to 84% in the under-30s bracket, indicating greater positivity around AI in the upcoming generation of paraplanners. 

While general sentiment has improved, actual usage has also edged up. 13% of paraplanners are now using AI tools, up from 10% last year, while 57% are interested in using AI. When asked what they were using AI tools for, the top answers were client reporting (35%) and the recording and documenting of meetings (35%). Data mining and analysis was next at 19%. 

Nearly 1 in 3 (30%) surveyed paraplanners now see AI tools as an outright opportunity, compared to just 19% last year, while only 7% see them as a threat to their roles (versus 9% last year). However, 85% of paraplanners are not yet using AI and of that number around a third (28%) said they do not plan to. With the emphasis on value for money mandated by Consumer Duty now baked-in to advice firms day-to-day work, AI tools could present an opportunity to go above and beyond in providing even better value for clients.

Independent body called for to offset regulatory burden

The positive shift in attitudes towards AI could help paraplanners comply with new regulations, which the survey has found to have resulted in increased workloads. Some 73%² of paraplanners stated that their workloads had been negatively impacted by regulation.  

With repeated changes to savings and tax allowances in recent years, the survey also shows there is appetite for a more stable landscape. More than two-thirds (68%³) of surveyed paraplanners believe that there should be an independent body setting long-term policy for pensions and investments. With 25% unsure, fewer than one in 10 (7%) paraplanners disagree with the need for an independent approach. 

Ranila Ravi-Burslem, Intermediary Distribution Director, Scottish Widows: “Our survey reveals the increased confidence in and positivity around the potential of AI, and the possibilities presented by these new technologies for the industry.  

“AI has the potential to give paraplanners a competitive edge, and increase capacity in the advice market, so it’s important that early adopters are supported with the right technology. From our side, we’ve put technology innovation at the forefront of our platform development strategy, committing £150 million over three years to streamline paraplanner and adviser workflows. 

“Complying with regulation and changes to savings and tax allowances is understandably a priority for many paraplanners. An independent body setting long term policy for savings and pensions would be a positive way to ensure consistency for the sector and benefit customers by improving the nation’s financial resilience.”

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Notes 

The Scottish Widows Paraplanner Survey is an annual survey of 200 paraplanners from across the UK. The latest survey was conducted by Research in Finance in July 2024. 

1. ‘Really useful’ and ‘Somewhat useful’ answers combined.
2. ‘Extremely negatively’ and ‘Negatively’ answers combined. 
   
3. ‘Strongly agree’ and ‘somewhat agree’ answers combined.

About Scottish Widows

Founded in 1815, Scottish Widows is part of Lloyds Banking Group, the UK’s largest digital bank and financial services group. With more than £210bn assets under administration and 6 million customers, Scottish Widows’ award‐winning product range includes workplace and individual pensions, annuities, life cover, critical illness, income protection as well as savings and investment products. Customers can access our products and services through independent financial advisers, directly, and through all Lloyds Bank, Bank of Scotland and Halifax branches.