The financial services industry is experiencing a whirlwind of change in which regulatory obligations are being enhanced, the number of products is rapidly multiplying and clients’ expectations of their advisors are evolving. All of this is taking place at a time when training programs for new advisors have become less common, leading to an intensified focus on the importance of mentoring.
“If we leave banks out of the equation, there really is no formal induction or training process for advisors today. So, in that sense, they could benefit dramatically from being taken under the wing of a veteran,” says George Hartman, CEO of Market Logics Inc. in Toronto.
Mentors are crucial in providing inexperienced advisors with the practical experience that can compliment their academic education, says Sybil Verch, national director of wealth management at Raymond James Ltd. and founder of Willow Wealth Management in Victoria.
Verch believes so strongly in the necessity of mentoring that she is looking to develop a program that will concentrate on developing these relationships at Raymond James. Both firms and individual advisors must accept some responsibility in ensuring that advisors have access to this support, she says.
“I just don’t think taking courses is enough. I think mentorship is critical if we want to see continued growth of [new advisors] and that high level of expertise and that ‘wow’ client experience going forward,” Verch says.
Guidance from senior advisors who can help rookies develop deep, personalized relationships with clients is imperative as new advisors who are just out of school tend to focus on the hard skills of finding the right product or strategy, says Steve Sebag, a private wealth counsellor in Montreal with Pavilion Investment House, a division of Pavilion Advisory Group Ltd.
Experienced advisors who have spent multiple decades in the industry can also learn a few things from their junior counterparts, particularly as the industry rapidly evolves. In many cases, the knowledge shared within a mentoring relationship benefits the senior advisor, who is typically the mentor, as much as it helps the junior professional.
“The tools that you used 20 or 30 years ago have changed completely and will continue to change from when I started,” says Armand Kessous, a principal at Pavilion Investment House and Sebag’s mentor. “When I started…working with [Sebag], there was a whole [new] range of exchange-traded funds, low-cost products and indexed products…It was important to capture that and capture it from young brains that have been freshly educated.”
Given the benefits available to both parties, advisors at various stages of a career should seriously think about developing a mentoring relationship, says Sara Gilbert, founder of Montreal-based Strategist Business Development.
Advisors at their core are entrepreneurs are building a business which can be a can be lonely experience, says Gilbert. Although advisors may want to discuss their career-related problems with family or team members, those individuals cannot necessarily relate to the experience of leading such a venture.
“Two brains are better than one. We need to get out of that exclusive, lonely entrepreneur-broker mentality of ‘I can do it all myself’ and actually open up new ideas,” says Gilbert. “The ideas that come out of exchanges [between mentors] are far greater than often what you come up with yourself.”
Sandi Martin, founder of Gravenhurst, Ont.-based Spring Personal Finance, was trying to avoid that loneliness when she developed a LinkedIn group for fee-only financial advisors and then initiated a mentoring relationship with an advisor she met through social media. Martin was looking for some support in her new career as an independent advisor after being in a big bank environment for eight years.
“I was a solo practitioner. I was hungry to trade ideas,” she explains. “Sometimes I felt like I was reinventing the wheel. I was looking for someone to say, ‘you don’t have to do that, here’s my process.'”
What mentoring should not be is an instant precursor to a succession planning arrangement. Although a mentoring partnership may eventually lead to discussion of succession, the latter should not be the primary goal of the former, says Gilbert. If the initial intent is the transfer of a business, that should be declared immediately in the name of transparency.
Up next: Finding the right person for the partnership.