The financial industry wants you — to mentor

By Melissa Shin | March 14, 2022 | Last updated on March 14, 2022
4 min read
recruitment
iStock.com / Dmitry Kovalchuk

This article appears in the March 2022 issue of Advisor’s Edge magazine. Subscribe to the print edition, read the digital edition or read the articles online.

Advisor succession has been a simmering concern for decades. Advisor’s Edge declared the clock was ticking in its April 2005 issue, warning that the average age of financial advisors was 47.

Seventeen years later, 47 seems almost tender. The average age of financial advisors across the industry is now over 50, according to Investment Executive’s 2021 Report Cards. Industry groups estimate the average age is 59 in certain segments.

Even investor advocates are concerned. Last year, the Ontario Securities Commission’s Investor Advisory Panel warned of a “looming advisor shortage” as advisors retire and fewer people express interest in becoming advisors. As we saw in the February issue, several advisory firms are growing thanks more to poached talent than new blood.

The Investor Advisory Panel also raised the “relative absence of diversity among financial advisors,” which has “potentially significant and deleterious social and economic implications for Canada’s most vulnerable and racialized communities.”

While you alone cannot lead a national recruitment drive, stop the Great Resignation or change deep-seated societal injustices, there is something you can do: mentor the next generation of advisors.

Mentoring can be done internally, with a member of your team, or externally, with someone from another firm (or branch, if you want to keep things in the family). And while the benefits for the mentee are well documented, the mentors and firms that facilitate these relationships also stand to gain.

Mentoring can lead to a decrease in turnover, said Mary Ann Mendes, managing director with BMO Capital Markets and co-chair of Women in Capital Markets’ (WCM) Return to Bay Street working group, which runs a program that helps women return to financial services after migration or an extended absence. “You’re losing intellectual capital if you’re not retaining an individual.”

For example, associate advisors often have high potential but can hit a career ceiling, said Lara Zink, president and CEO of WCM. “The [investment advisors] value their senior associates so highly because they know the clients, they know the business, they know the product,” Zink said. “So there’s no incentive for IAs to advance their senior associates.”

But Mendes said an associate who feels stuck in their career may look for other options: “What’s in it for the mentor is retention of your best people.”

Innovation is another benefit. Advisors with a mentor invested in their development may feel more confident introducing ideas that result in better efficiency, Mendes said: “So you become more productive and bring in even greater revenue.”

Mentoring can also create a more personal return on investment.

“Being a mentor can help you develop strong communication and leadership skills, increase your self-confidence, provide exposure to new and different perspectives, and grow your professional network,” said Divya Steinwall, co-head of the mentorship program for the Canada chapter of Women in ETFs and a director with BlackRock.

Zink acknowledges that mentoring can seem daunting for a busy professional. That’s why the Return to Bay Street program only asks its mentors to devote 30-60 minutes per month for 12 months, though many mentors choose to spend more time with their mentees because of how rewarding the relationship is. (There are two mentors for each mentee: one working in the same company and one from outside.)

There’s plenty left to do to shore up the industry. In 2005, our reporting said the industry needs to make the financial advisor career path “more attractive and accessible” to young people. Today, at least eight Canadian post-secondary institutions offer a financial planning specialization, but the path to becoming an advisor is less clear than it is for other professions like law. (The Ontario Colleges website, for example, still refers prospective students to the “Financial Planning Standards Council,” which has been called FP Canada since 2019.)

Nonetheless, mentoring is one step you can take to set up the industry for future longevity.

Hopefully, we won’t need to sound the alarm in another 17 years.

Looking for a few good mentors

The following is a non-exhaustive list of industry associations with formal mentorship programs:

Email mshin@newcom.ca if you’d like to be added to this list.

*Mentors need not be women.

Melissa Shin is Editorial Director of Advisor’s Edge. Read her biography here and email her at mshin@newcom.ca.

Melissa Shin headshot

Melissa Shin

Melissa is the editorial director of Advisor.ca and leads Newcom Media Inc.’s group of financial publications. She has been with the team since 2011 and been recognized by PMAC and CFA Society Toronto for her reporting. Reach her at mshin@newcom.ca. You may also call or text 416-847-8038 to provide a confidential tip.