Ryan Shoemaker entered the financial services industry at the peak of the financial crisis. Fresh out of university and 21 years old, he began hunting for a job as a financial advisor at a time when investors were disgruntled and few firms were expanding. In such a challenging environment, the prospects for a young and inexperienced advisor appeared bleak.
But, eager to launch his career, Shoemaker got a job as an advisor with Investors Group Inc. in Toronto in December 2008. A year later, his career is thriving. Managing a base of clients that is steadily growing through referrals, Shoemaker has already met his objectives for the year, and he’s eager to see what else he can achieve.
“Overall, I’ve attained my goals — both personally and in business — for this year,” says Shoemaker, now 22. “But it’s the type of industry where there is no ceiling. I’m always striving to reach the next level.”
But, like any young advisor starting out in the business, Shoemaker faces many challenges.
> The First Few Years
An advisor’s first couple of years in the industry can be extremely difficult. Young advisors face the daunting tasks of earning credibility, attracting new business and learning how to work effectively with clients, all while adjusting to the long hours and hectic pace of the job. The challenges and demands drive away a large proportion of new advisors during those early years. Some dealers report that as few as 35% of rookie recruits remain with the firm after their first three years on the job.
“The first 24 to 36 months are the hardest time in this business,” says Daniel Keller, a 28-year-old advisor with Creative Planning Financial Group in Toronto. “At 36 months, you’ll either start making pretty good money or it’s just not going to happen — you’ll see that this is not for you.”
How do new advisors not only survive those first few years, but thrive? There are plenty of strategies that can help to build a long and successful career as an advisor.
> Finding The Right Firm
When getting started in the industry, it’s important to find a firm that suits your approach to doing business. Financial advisory firms can vary significantly, in terms of their corporate cultures, compensation structures, support services and training programs. A firm that offers the ideal working environment for one advisor could be completely unsuitable for another, says Heather Mills, public relations specialist with the Financial Planners Standards Council.
“You have to think about where you would fit in,” she explains.
Young advisors in particular are likely to need more comprehensive training and guidance in their early years. Taylor Train, chief operating officer with Advocis, says many dealer firms have scaled back their training and development programs in recent years. He urges young advisors to ask prospective employers whether they provide the training that meets the budding advisors’ needs — whether it is technical training on financial issues or support in building client relationships.
The best approach to researching firms, the experts say, is to speak to advisors in the industry about their experiences with their firms.
Shoemaker spent two months researching firms before accepting a job. The most important considerations for him were training and ongoing development, and he chose Investors Group because he was impressed by its offerings in these areas.
His training involved eight days of in-class sessions with specialists from across the country, in which Shoemaker learned about all aspects of financial planning, including cash management, insurance, taxes, retirement planning and estate planning. Another 10 days of training were devoted to self-study, during which time Shoemaker read extensively on various aspects of running a business, including compliance, budgeting and accountability. Investors Group’s training program also includes field development, in which rookies engage in client meetings with the assistance of an experienced advi-sor and learn how to apply the financial planning knowledge they’ve acquired.
Shoemaker attributes much of his success in his career so far to the thorough training he has received. He encourages new advi-sors to seek out training programs that include both in-class and field development formats.
> Finding A Mentor
While most training programs equip students with knowledge in investing and financial planning, many young advisors enter the industry without the practical skills they need to work effectively with clients.
@page_break@”There is no [formal] process through which people are learning the essential soft skills that are going to allow them to work with people and to build relationships,” says Train. While technical knowledge is crucial, he says, skills such as listening, communicating and building relationships contribute much of the value to financial advice. “All of those wonderful things that make a business tick are not being transferred to the new generation of advisors.”
But young advisors can work at developing these skills by working with a mentor. Shoemaker says shadowing a senior advisor at Investors Group was one of the most valuable parts of his training.
“I really wanted to see how someone who had experience would deal with their clients,” he says. “He took me through the entire planning process.”
Some firms offer mentoring or succession-planning programs that pair up new advisors with industry veterans. Other ways of meeting mentors include getting involved in professional associations such as Advocis or networking at industry conferences.
Blair Guilfoyle, a 29-year-old advisor with Toronto-based Guilfoyle Financial Planning Inc., the firm founded by his father, finds it effective to approach advisors who are speaking at conferences. He offers to buy them coffee or lunch in return for the opportunity to ask them about their experiences in the industry.
“Generally, most of the senior advi-sors have been receptive to that,” he says. “There are a number of them out there whom I try to meet with on a regular basis, just to pick their brains and find out what worked well for them early on in their careers.” (See “The more you know…” on page B10.)
> Building A Book Of Business
Early in your career, building a book demands extensive networking and meeting as many people as possible, says Mark Halpern, a certified financial planner with two decades of experience and owner of illnessPROTECTION.com Inc., in Markham, Ont.
“Those first 10 years or so, you just have to see the people,” he says. “See as many people as you can.”
An effective starting point for recruiting clients is to make use of networks you have already established, says Mills. That could mean talking to former classmates or people you know from sports leagues, charity groups or other organizations in which you are involved.
Some young advisors feel most comfortable targeting clients within their age range. For instance, Guilfoyle spent his first three years in the industry focused on serving younger, high-income professionals.
“It was a bit of a natural fit,” he says. “In many cases, I was recommending and helping them implement strategies that I was personally using myself.”
But, he warns, prospects in the younger market are limited. A very small percentage of Canadians with significant investible assets are in their 20s and 30s, he says.
Still, working with clients in your own age group — even those who have yet to accumulate significant financial assets — can provide a good starting point. Gaining the confidence to work with a broader spectrum of clients can come with time. After Guilfoyle gained experience working with younger clients, he has become more comfortable reaching out to other groups, such as business owners.
When trying to appeal to a specific target market, Mills says, it’s important to educate yourself on financial products or trends relevant to that market. Someone targeting younger clientele, for instance, should consider learning about socially responsible investing, which is popular among younger clients.
Holding informational seminars or events could also help advisors attract clients within their target demographic. For example, if you are targeting younger clients, consider holding a seminar on financing a first home or saving for a child’s education.
> Join A Team Practice
Alim Dhanji, a 31-year-old CFP with Assante Financial Management Ltd. in Vancouver, spent his first five years in the industry working as an assistant to another advisor. This let Dhanji gain on-the-job experience while slowly building his own book of clients.
“Rather than just trying to learn on the fly,” he says, “I worked with a successful financial planner who showed me really how to develop strong relationships with clients.”
For example, sitting in on client meetings with a seasoned advisor helped Dhanji learn how to carry himself in a professional manner and how to deal calmly with stressful situations. Once Dhanji had five years’ experience under his belt, he began to build his own book of business. By that time, he says, he felt well prepared for the challenge.
Working in an established practice can also eliminate the compensation-related stresses of the early years on the job. Dhanji earned a salary as an assistant, which let him concentrate on comprehensive financial planning rather than making commission-based sales.
“I didn’t really have to go out and sell products to cover my overhead,” he says. “I was earning a salary, and then I made the transition to being a planner.”
Keller has taken a similar approach to his career. Two years ago, he found a job working with senior advisor Ken Stern at Creative Planning, helping Stern manage his clients while Keller gradually builds his own client base.
“Working for someone like Ken has been the best opportunity that has ever presented itself to me,” Keller says. “I have the knowledge of a seasoned advisor and the stability of a paycheque as I’m growing my book of business.”
Joining a team practice can also lead to opportunities for young advisors to buy a book of business eventually, as aging advi-sors begin thinking about their retirement.
“There’s a huge opportunity for succession planning in this business,” says Halpern, who encourages rookies to approach senior advisors in seeking a position in which the rookies would provide complementary services to clients, such as meeting with their children. “It develops a relationship and you learn from that advisor,” Halpern says. “And, ultimately, it would be nice to have a book of business handed off to you.”
> Earning Credibility
Conveying credibility is a key challenge faced by young advisors, especially when working with older clients. Regardless of your training or education, a young face typically suggests a lack of experience, which can cause clients to question your abilities.
“If you’re a younger advisor, they’ll look at you and say: ‘What market cycles have you seen?'” Mills says. “Instinctively, people tend to trust the grey hair — someone who has been in the industry for a while.”
Keller finds that an effective way to deal with the issue is to address it directly with clients: “If I feel that a potential client is hesitant based upon my age, I always bring it up. I think it’s important to address it; not to try to get around it.”
Keller assures his clients of his credibility by pointing out that he works for a reputable firm, and that he works closely with an experienced senior advisor. Clients typically respond very positively to such a conversation. “People understand,” he says, “because everybody’s been in your position at one point in time, no matter what field they’ve been in.”
Many advisors argue that a wide gap in age need not be an issue. In fact, Shoemaker finds that some clients prefer to work with an advisor who is younger, because they want someone who will be around to provide advice in the long run.
“A lot of people who are 30 to 50 — in the wealth-accumulation phase of their lives — are looking for someone who’s going to be with them until they retire or until they’re doing their estate planning,” Shoemaker says. “Someone in their late 50s or early 60s isn’t going to be there when [clients] retire.”
When working with clients, Shoemaker also finds that his level of confidence is far more important than his age. “People can smell confidence from a mile away,” he says. “You just have to focus on being confident in what you’re saying, confident in the plan that you’re providing.”
Halpern agrees that other factors are more significant than an advisor’s age. “It doesn’t matter how much grey hair you have or whether you wear bifocals,” he says. “The value that you’re going to have with anybody is in the perception that you are a trusted advisor.”
> Client Communication
While the new generation of advisors may be accustomed to communicating through text messages and emails, they must ensure they are using professional and appropriate forms of communication when dealing with clients. This is an area commonly mismanaged by young advisors, says Evelyn Jacks, president of The Knowledge Bureau in Winnipeg, a firm that offers professional-development programs for financial advisors.
“You need to understand what should be communicated on the phone and in an email, vs what should be conveyed in writing,” she says. “There is a place for each medium.”
Jacks encourages young advisors to manage their communications with clients extremely carefully: always proofread letters and emails to ensure accuracy, and avoid sending hastily written emails from a mobile device.
“People expect respectful and accurate communications,” she says.
> Continuing Education
Educational programs and designations can also help young advisors build credibility. The FPSC has witnessed a growing number of young individuals pursuing their certified financial planner designation early in their careers.
“There is immense value in earning a certification — especially for someone younger, because you’re investing in yourself at an early stage in your career,” says Mills. “It shows clients and employers that you’re dedicated to competence and ethics and professionalism.”
Dhanji earned his CFP designation early in his career, and says it has enhanced his image as a young advisor. He always makes clients aware that he has the designation, and explains what it represents, in terms of professionalism, ethical standards and continuing education.
“It gives you a lot of credibility,” he says.
> Time Management
While recruiting clients, undergoing training, finding a suitable mentor and engaging in ongoing education, time management can be a challenge of its own for young advisors. Jacks says many are caught offguard by the hefty workload and the vast amount of learning in the first few years of the job.
“It’s a steep learning curve, and you have to be prepared for that,” she says, “and prepared for the effects of the demands of your business and your clients on your personal life.”
Jacks recommends blocking off specific parts of your day for administrative work, continuing education or other important activities that could get squeezed out during the daily grind. Make time for your personal life, too: “Work with a strict schedule. And that schedule should include not just work but time for yourself and your family.”
Shoemaker agrees. He works long hours, but he always reserves his off days for himself. “I don’t touch my BlackBerry on Sundays or Mondays,” he says. “That’s my time. And I know that the rest of the time, I have to be working from when I wake up until I go to sleep.”
When Shoemaker does have spare time, he enjoys sailing, kayaking, running and swimming. And he practises muay Thai with a martial arts trainer.
In an industry that’s largely entrepreneurial by nature, Shoemaker believes a willingness to work hard is a key factor of success for any young advisor.
“You have to be driven,” he says, “and you have to be motivated to go out there and work for yourself to get those opportunities.” IE