Seventeen years later, 47 looks almost delicate. The median age of financial advisors in the industry is now over 50, accordingly Investment ExecutiveCertificates 2021. Industry associations estimate the average age in certain segments at 59 years.
Investor advocates are also concerned. Last year, warned the Investor Advisory Panel of the Ontario Securities Commission an “impending consultant shortage” as consultants retire and fewer people express interest in becoming consultants. As we saw in the February issue, several consulting firms are growing more on hired talent than on offspring.
The Investor Advisory Panel also noted the “relative lack of diversity among financial advisors,” which has “potentially significant and adverse social and economic impacts on Canada’s most vulnerable and racist communities.”
While you alone can’t lead a national recruiting campaign, stop the Great Resignation, or change deep-seated societal injustices, you can do something: mentor the next generation of consultants.
Mentoring can be done internally with a member of your team, or externally with someone from another company (or industry if you want to keep things family-friendly). And while the benefits to the mentee are well-documented, the mentors and companies that foster these relationships can also benefit.
Mentoring can lead to a drop in sales, said Mary Ann Mendes, chief executive at BMO Capital Markets and co-chair of Women in Capital Markets (WCM). Return to Bay Street Working group running a program to help women return to financial services after migration or a long absence. “You lose intellectual capital if you don’t keep a person.”
For example, Associate Advisors often have high potential but can reach career barriers, said Lara Zink, President and CEO of WCM. “The [investment advisors] value their senior staff so much because they know the customers, they know the business, they know the product,” said Zink. “So there is no incentive for IAs to promote their senior associates.”
But Mendes said an employee feeling stuck in their career might look at other options: “What’s in it for the mentor is the retention of your best people.”
Innovation is another benefit. Consultants with a mentor who invests in their development may feel more confident introducing ideas that result in better efficiencies, Mendes said: “It makes you more productive and generates even more revenue.”
Mentoring can also create a more personal return on investment.
“Being a mentor can help you develop strong communication and leadership skills, boost your confidence, learn about new and different perspectives, and expand your professional network,” said Divya Steinwall, co-lead of the mentoring program for the Canada Chapter of Women in ETFs and Director at BlackRock.
Zink acknowledges that for a busy professional, mentoring can be daunting. For this reason, the Return to Bay Street program only asks their mentors to devote 30 to 60 minutes per month for 12 months, although many mentors choose to spend more time with their mentees because the relationship is so rewarding. (There are two mentors for each mentee: one in the same company and one external.)
There is still a lot to do to prop up the industry. In 2005, our reporting said the industry needed 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 a consultant is less clear than in other professions such as law. (The Ontario Colleges website, for example, still directs prospective students to the Financial Planning Standards Council, renamed FP Canada in 2019.)
Nonetheless, mentoring is a step you can take to position the industry for the future.
Hopefully in 17 years we won’t have to sound the alarm.
Looking for some good mentors
The following is a non-exhaustive list of industry organizations with formal mentoring programs:
Email email@example.com if you would like to be added to this list.
*Mentors do not have to be women.
Melissa Shin is the editorial director of Advisor’s Edge. Read her bio here and email her at firstname.lastname@example.org.