Client service trumps higher education

By Raf Brusilow | October 3, 2011 | Last updated on October 3, 2011
5 min read

For aspiring advisors, education is only one piece of a very complex puzzle, as industry certifications and experience play a much bigger role in hiring than your university major, recruiters say.

While a degree like a BComm or MBA can provide an excellent starting point to your career, your life experience, relationship-building skills and industry accreditations are what will ultimately get you started, whether you’re looking to work as a financial planner or to become a securities broker.

Jason Round, senior manager of financial planning support at RBC, says he’s looking for designations like the Certified Financial Planner (CFP) and Personal Financial Planner (PFP). Whether or not a candidate has an actual business degree is secondary to whether he or she has strong client-facing experience.

“We see some great candidates that come out of colleges and universities nowadays but it’s the experience of actually sitting down with a client and turning all that theoretical knowledge you have learned into something tangible for the client that really is crucial,” Round says.

He suggests a business degree definitely prepares you for being an advisor and more importantly it lets you know if you have the passion for finance that will make you successful, but ultimately completing industry credentials will get your foot in the door of the industry.

Bob Dorrell, senior vice-president of distribution services at Assante Wealth Management, says his firm generally only looks for advisors who already have a CFP or similar designation, as these credentials tell recruiters most of what they need to know about a candidate’s level of knowledge.

“When we’re recruiting, we’re looking for advisors with a CFP or in the process of getting a CFP or something similar,” Dorrell says. “In today’s age the ability to establish trust and credibility with clients is key and part of what we’re talking about is industry accreditation and qualification.”

Sales experience is definitely an asset. At Investors Group, vice-president of corporate training and development Sharon Harrald says while the majority of new advisor hires do still come from within the financial services sector, people with sales experience are a close second followed only by those with management experience. There’s no specific educational background Investors Group looks for, Harrald says, instead the company screens for sales acumen mixed with business skills.

“We’ve had engineers and teachers and nurses who’ve come to work for us because they had a passion for finance,” Harrald says. “They need to have the technical competence to do financial planning, but then they’ve really got to be able to do the relationship building.”

Dave Pickett, senior vice-president of practice management at TD Wealth, says age and experience are definitely big factors when hiring advisors because clients are generally more interested in wisdom than book smarts. That doesn’t mean a business degree isn’t highly valued—Pickett suggests a BComm or MBA is still an ideal starting point for a young aspiring advisor—it’s just more of a means to an end rather than an end in itself, and rightly so.

“An MBA is terrific, a CFA is even better. They would both certainly give comfort to a candidate’s academic abilities and they show you have a passion for finance,” Pickett says.

For investment advisors in particular, Pickett points out that you won’t get hired without completing the Canadian Securities Course (CSC) certificate—what once was considered something to aspire to over the course of a career is increasingly being seen as a starting benchmark by investment firms.

Not surprisingly then, young people are less likely to fit into new advisor positions—Pickett estimates the average age of advisors at TD Wealth to be 34-37 and new hires generally come with 8-10 years of experience in the field.

The same age range tends to hold true across the industry, with the average advisor age even approaching 50 at Assante, according to Dorrell. Ultimately clients’ preferences lean toward older, more experienced advisors.

“We’re looking for people with proven success who are looking to start a successful second career,” Pickett says. “Most of the clients we’re going after are the affluent clients in Canada and an affluent client is more attracted to working with somebody who has some life experience.”

That experience often includes a sizeable client list of their own that shows long-term relationships, as firms like TD are often more interested in an advisor’s relationship building skills than solely their financial knowledge. The game is won today, Pickett says, by providing a superior client experience which frequently involves skills learned from sales, marketing or an entrepreneurial background.

Dorrell says the biggest mental hurdle many would-be advisors have is the realization that despite being highly educated, they can’t expect to start their careers as a full-fledged advisor right out of the gate because experience is so crucial to succeed in an increasingly competitive industry.

“I don’t think it’s a business you can start on your own from scratch anymore. Many young advisors will come in as part of a team or as a junior partner. It’s a much more competitive business than it was in the past,” Dorrell says.

In the past, joining the industry was deceptively easier than it is now. When droves of people pulled their money out of floundering GICs in the 1990s, demand for fresh investment advice attracted a flood of new advisors into the business very quickly.

Many who set up shop found new clients relatively easily. Today competition for clients is much greater and new advisors tend to join existing teams rather than striking out on their own, Dorrell says.

Yet starting out small is not the end of the world, suggests Round. In many cases it can give you precious experience that will be a crucial stepping stone in your overall career, particularly if your employer is on-deck about helping you meet your career goals.

“It can be frustrating to get your degree and realize when you come out you might have to start at a position that doesn’t involve holistic financial planning,” Round says. “But there’s a continuum of roles and if we bring you in, we’ll make a commitment to you and an investment in you to move you along that path towards a financial planning career.”

Many rookie advisors start in support roles within a financial institution, Pickett says, such as branch support, sales assistance or by doing administrative work for a veteran advisor and it’s the kind of work that will eventually make you a great advisor in your own time. Once you do gain crucial day-to-day experience, you’ll find a great amount of mobility within an industry hungry for advisors with proven skills.

According to Pickett, roughly 75% of new advisor hires at TD Wealth come from outside the firm and across the country, TD consistently hires about 70-80 new advisors every year. RBC hired around 100 new advisors across Canada in the last year, according to Round, so there is growth in the advisor market.

The hard work involved in building a career to become an advisor is worth it ultimately, Dorrell says, because the opportunity and satisfaction the job offers is unmatched.

“It’s a great business to be in and there’s tremendous satisfaction in being able to help Canadian families meet their financial goals. It’s a very entrepreneurial business with a great deal of opportunity,” Dorrell says.

Raf Brusilow