It’s no secret that the financial services industry is in need of fresh blood. As advisors age and prepare for retirement, companies are struggling to recruit and train the next generation of advisors.

“There are not nearly enough young people entering financial services as baby boomers retire,” says Heather Mills, public relations specialist with the Financial Planners Standards Council in Toronto. “This is of the utmost concern.”

Fewer than 10% of Canada’s 17,000 certified financial planners are under the age of 34. The average age of financial advisors in all distribution channels, according to Investment Executive research, is 47. Some estimates place the average age of insurance advisors at 57.

And, as with any crisis of supply, young people looking to break into financial services are finding themselves in high demand. “A lot of the larger firms recruit very aggressively,” says Mills, who notes that smaller industry players have a tough time keeping up with the big names. “Large firms have more money and more exposure, making it harder for the independents to compete.”

But there are strategies smaller firms and independent advisory practices can use to make themselves more attractive to the brightest talent. The goal is to offer prospective employees not only a place to earn a living but an environment in which to develop their skills and build a career.

“These days, we need to be a little more creative than we have been in the past,” says Sharon Harrald, vice president of Investors Group Inc. ’s Investor Group Institute in Winnipeg. She speaks from experience: her firm has been hiring new advisors for 16 consecutive quarters.

And, as Cecilia Tsang can attest, bigger isn’t always better. Almost a decade ago, when Tsang was a newly minted University of British Columbia commerce graduate, she was on the interview circuit for an entry-level financial services job in Vancouver.

“At the time, I was struggling between choosing one of the big-name firms vs Rogers Group Financial Ltd., ” she says, “which I had not heard of prior to applying there.”

After three interviews with Rogers Group, Tsang accepted an administrative assistant position and has never looked back. She wasn’t motivated by money — “The salary and benefits were the same,” she says — but by the degree of experience she could gain from working at a smaller firm.

“I asked a lot of questions during my interviews, and it seemed that if I worked at a big firm, it wouldn’t be a very steep learning curve because I would have been limited to very few responsibilities,” she explains. “Because Rogers is a small company, I realized I would gain experience in many areas.”

Rogers Group uses an articling program — a formalized mentoring system in which junior advisors work on one of the firm’s 12 advisor teams, with the ultimate goal of running their own books of business — which was also a major draw. “It sounded like a really great program,” says Tsang. “I wanted to get into it.”

She worked her way up from administrative assistant to articling advisor to associate advisor.

Rogers Group is an example of what small and independent firms can do to attract talent: it identified an ideal candidate, sold her on the idea of working in a small shop and has continued to keep her happy there. Here’s how you can do the same.



> Know Your Firm

You can’t identify the right person for the job without first stepping back and examining your firm’s culture, says Stephanie Bogan, founder and principal of Quantuvis Consulting in Redlands, Calif., which helps financial advisors hire and train new recruits. Before Bogan embarks on a talent search, she needs to know exactly what makes the hiring firm tick.

“Understanding what type of environment you have — or want to create — is really key to making sure you are getting people who are going to fit in,” says Bogan.

A small firm with a friendly vibe and flexible work hours would be a poor match for a candidate with a corporate mentality, she says. Similarly, a nine-to-fiver probably wouldn’t cut it at an entrepreneurial shop in which employees are expected to put in long hours.

At Rogers Group, those looking to fast-track to the head of the pack need not apply. “Most people want to become a full advisor right away, but we are not going to let that happen,” says the firm’s president and chief operating officer, Brett Simpson. “The biggest challenge we face is that people in the marketplace today don’t have the patience to learn really what we think they need to learn to be a good financial advisor.”

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> Define The Role You Need To Fill

In an ideal world, Bogan says, advisors would take the time to design a complete human-capital program — outlining hiring and firing procedures, job descriptions, performance reviews and training — before recruiting any new talent. “It’s not always practical,” she says, “but the sooner you do it, the better off you are.”

At the very least, suggest Julie Littlechild, president of Advisor Impact Inc. in Toronto, write a crystal-clear job description. “We tend to list the tasks someone might do, but that doesn’t necessarily reflect the responsibilities and accountabilities of the role,” she says. “I encourage advisors not only to list the tasks associated with the role but also to say: ‘Here is what you are truly accountable for,’ such as setting 15 client meetings a week.”

Also, take some time to consider the type of person you’d like to attract to the role and how you can best reach them.

Some firms offer co-op placements, as Desjardins Financial Security Investments Inc. does, to university or college students interested in entering the business. These placements, which occasionally lead to permanent employment, give firms a chance to try out potential employees. Steve Cole, regional vice president of Desjardins in Toronto, notes the firm also has a strong presence on Workopolis.com, the online job-placement service, and at college and university career fairs.

While Rogers Group will occasionally advertise job openings in the newspaper, Simpson says, the firm feels it attracts higher-calibre candidates when it posts job openings at local universities.

And as Sam Albanese, insurance industry director at Seneca College’s Centre for Financial Services in Toronto, likes to point out, new blood doesn’t necessarily mean young blood. Albanese suggests thinking beyond the 20-something set: “We’re seeing more companies that are very keen on hiring women who have been working in the home but are now looking for a job with flexibility.”

That’s a market Investors Group is currently tapping. “We call them the ‘comeback moms’,” says Harrald. “They often consider entering real estate because the hours are flexible. But our opportunity gives them even more flexibility.”

The majority of the Investors Group’s recruits come through referral, Harrald says: advisors often suggest clients enter the business.



> Determine Compensation

Good news for small players: it isn’t always about the money. Firms offering a good work/life balance may be able to get away with offering less competitive salaries than those that expect employees to be chained to their desks. But if you operate as a strict taskmaster, Bogan says, “You have to find the right person and offer them boatloads of money.”

At Rogers Group, compensation for articling advisors differs among the firm’s 12 advisor teams. “In most cases, there would be salary and possibly a bonus, depending on the [compensation] mix used by a particular team,” says Simpson. Articling advisors are weaned off salary as they progress up the advisory ladder.

Desjardins takes a similar approach, with new advisors eligible for a fixed financial assistance program that lasts for 13 to 52 weeks.

And while Investors Group recruits don’t receive salary per se, they are eligible for achievement bonuses upon completing various facets of the firm’s training program.

Offering financial support to rookie advi-sors has definite pull. Says the FPSC’s Mills: “People tell me the idea of working solely on commission is scaring them out of the profession.”

Besides, new recruits will need a settling-in period before they start bringing in clients. “You can’t expect a young advisor to be a rainmaker the day he or she walks in,” says Littlechild. She recommends junior advisors focus on getting more business from existing clients, which can bolster the junior’s confidence.

Aside from compensation, even modest perks such as a paid gym membership or extra vacation days can help a small firm sweeten the pot. Be creative!



> Invest In The Intake Process

After working as an administrative assistant for a year and a half, Tsang underwent extensive screening and personality testing before entering Rogers Group’s articling program. The rigorous process sent a positive message. “It reassured me that it was putting a lot of resources toward hiring me and making sure I was the right fit,” she says. “It was a win/win situation.”

Simpson concurs: “I want to make sure that employee turnover — and the various inefficiencies that come from hiring people who aren’t the right fit — are minimized.”

Psychological profiling is an important part of that process. “We hire an industrial psychologist to run a bank of tests on a particular candidate,” he says. “Then we receive a report that discusses the candidate’s career aspirations and also whether he or she is a good fit for the job.”

Desjardins and Investors Group also conduct psychological testing on candidates. “Interviewing is an art and a science,” says Harrald. “The art is asking behavioural-based questions; the science is our profiling instrument [a 40-minute online test administered by Toronto-based Self Management Group], which identifies the attributes a candidate may bring to the job. It’s specifically geared toward profiling people who are best suited to a competitive sales environment.”

Aside from determining whether a candidate is the right fit, the interview is also an opportunity to play up the forward-thinking nature of your firm and sell young candidates on the advantages of working for a smaller shop. “You need to show that you’re visionary and looking to the future,” says Gary Butler, director of Seneca’s Centre for Financial Services, “because a young person isn’t going to commit to a firm that isn’t going anywhere.”

Seneca grants both a four-year bachelor of applied business degree in financial services management and an eight-month financial services practitioner certificate. About half of last year’s degree graduates chose to work for smaller firms. Says Albanese: “We find that candidates want to work there because they are an excellent place to get some really solid training at the ground level.”



> Develop A Training Module

“One of the benefits of larger firms is that they can offer practice-management and technical training,” says Littlechild, “which is very compelling for new advisors.”

Harrald agrees: the training and support Investors Group offers its advisors — from their first day on the job until they have built a thriving book of business — is “highly structured.”

However, an independent advisor on a tight budget can still outline and clarify the various roles within the firm by creating an operations manual. “You need to have some sort of process to take people through,” Littlechild says, “starting with what the firm is and what it is trying to accomplish, and then laying out the basics of how the candidate needs to do his or her job. You don’t want to push someone into the deep end and tell them to swim.”

Bogan’s firm has developed an advi-sor training and integration program for its clients, which outlines both the employer’s and the new employee’s responsibilities concerning career development. Quantuvis’ program lays out what level of support the firm will offer the employee and what standards are expected of the employee over the first 12 months. It is a great selling feature, according to Bogan, who knows of three advisors who chose to work at firms because those firms used the program: “The advisors said it made the firms look intelligent, informed, thoughtful and professional.”



> Demonstrate A Clear Career Path

While not every role may lead to a promotion — especially in lone-advisor practices — Bogan notes, a position can always lead to increased responsibility. “We create career ladders,” she says, “levels within positions.”

For instance, you could divide the administrative assistant position into Levels 1, 2 and 3, with increasing responsibilities and compensation for each level.

As with a detailed job description, mapping out a career path is another way of creating what Bogan refers to as a “common language” between advisors and new hires. “It’s something you can have a conversation about,” she says. “People want to know how they can get ahead and make more money.”

Rogers Group’s articling program — which was formalized 10 years ago to ensure consistency among advisor teams — has a defined set of criteria that individuals must meet before progressing to subsequent levels: associate and then business-owning advisor. The progression can take five to 10 years. “We have guidelines and thresholds and hurdles that we want to see someone achieve before he or she can move from one category to the next,” Simpson says. “And, ultimately, it’s up to our board of directors to determine whether that person can become a formal advisor within our firm.”

The program has proven to be a magnet for new talent, he adds: “A lot of people approach us with resumés.”

But Rogers Group rarely hires articling advisors from outside. The system is fed by individuals who have paid their dues in lower-ranking financial planning and marketing-assistant positions, an entry point for outside talent.

Simpson admits that the length of time required to progress through the firm’s ranks can be daunting. But, he says, suitable recruits don’t mind the slow climb, thanks to the ever-present learning environment the firm cultivates. That’s what has kept Tsang at Rogers Group for almost 10 years. Even though she is not yet considered a full-fledged advisor, she says: “The experience I’ve gained here is well worth the wait.” IE