Teach young advisors to prospect

By Mark Noble | October 6, 2009 | Last updated on October 6, 2009
4 min read

There is a growing number of people with qualifications to be financial planners. Problem is, if they can’t sell, there’s not a lot of opportunity for them.

A panel of industry recruiters at the 2009 Financial Planning Standards Council’s (FPSC) Financial Planning Symposium in Toronto emphasized there is a need for new advisors, but if they can’t prospect, they’re likely not going to stick around without partnering with a senior advisor.

The FPSC says there will be a 41% increase in demand for financial planning services between now and 2016. The driver of this trend is the large group of boomers entering retirement. Problem is, most of the advisors who service this group are also nearing retirement age. The argument goes that the industry will need to either retain older advisors or rapidly repopulate the industry with qualified advisors.

According to Alan Goldhar, a financial planning course instructor at York University and the chief investment officer for the Office of the Public Guardian and Trustee of Ontario, there are lots of young people willing to get professional designations and education to become planners — what they don’t want to be are salespeople.

“From an education standpoint, we have given students all the tools and techniques needed to do financial planning,” Goldhar says. “At York, 90% of the students who start the program do not take the final Capstone course. The most common reason given for not doing this is that the industry has jobs for investment salespeople, not for comprehensive financial planners.”

Goldhar says the financial service’s industry’s short-term view of basing sales on selling investments rather than advice has created a situation where recent graduates have to spend most of their time selling rather than engaging in the in-depth financial planning they were trained to do.

“Many recent graduates feel the available jobs in the financial planning industry will not allow them to help their clients. This has created a very frustrated situation for recent grads. It’s somewhat akin to going to medical school, and once you’re actually working, all you’re allowed to do is take the patient’s temperature and change Band-Aids,” Goldhar says.

On the flip side, the industry recruiters made it clear that they need people with strong prospecting skills. According to Lee Corasanti, a new advisor training manager for Freedom 55 Financial, prospecting is the single most challenging task for new advisors who may lack credibility with older clientele — the clients with money.

“Prospecting is the single biggest challenge facing advisors from generation Y — those under the age of 30. There is a great deal of time required to effectively prospect; however, age presents a significant barrier for young advisors,” she says. “Although younger advisors are more comfortable with technology, such as teleconferencing, emailing, blogging and texting, the financial planning industry is still very much about face-to-face contact. This has not changed over the years. Many of the advisors in our group who are successful, are successful because they are willing to work hard at prospecting, that is building a client base and building new relationships.”

Yong Kim, the recruiting leader for Edward Jones, says he’s actually meeting more recruits with a clear understanding of the financial planning profession and, even more encouraging, recruits who have taken the first steps into education — such as taking the Canadian Securities Course while still in school.

Kim says that pairing up technically proficient young advisors with senior advisors looking for successors can be a successful way to bridge gaps in the labour pool even though matches tend to be based on personality.

“The foundation of any business is to create customers. That’s something we try to teach all our advisors. Whether you want to call yourself an advisor or a planner, whether you get the CFP or FCSI, you have to understand that ultimately you are a business owner, and as a business owner you must create clients to have a successful business,” he says.

In some ways, the inability of gen Y recruits to sell is a boon for mid-career changers. Advising is one industry where recruiters consider grey hair a substantial asset.

“We’re really looking at second-career people as a significant opportunity for us,” says Mark Gailbrath, vice-president of recruitment and learning for RBC. “I think in this business people do look for a little grey hair and life experience to provide the financial advice necessary to create a financial plan.”

In some ways, the increase in layoffs in other industries has been a boon to recruiters that now have a deeper talent pool of career changers to choose from.

“Since 2008, we’ve seen a huge spike in interest in this career path,” Kim says. “Whether you’re a university grad or career changer, financial planning skills are valued, but ultimately in this industry you are a business builder.”


Mark Noble