Like investment guru Warren Buffett, veteran financial planner Rod Tyler says he likes to "tap dance to work" and, at 68, has no immediate plans to retire.
Still, the founder of Regina-based The Tyler Group Financial Services has thought long and hard about how to ensure seamless service for his clients when he leaves the independent financial advisory company he founded 30 years ago. After two years of discussions, last year he negotiated a formal partnership to bring in Al Kimber, a long-time friend and industry associate almost 20 years his junior, to the firm.
"Al and I dated for 15 years," quips Mr. Tyler. With a succession plan now in place for the company, he adds, "clients know that if I were gone, Al would be there."
Knowing when – and to whom – to pass the baton is an emerging issue for baby boom-era financial planners. With the last of this cohort turning 50 this year, industry leaders urge new efforts to recruit a younger generation.
"There are some out there in the broader industry who think these things will take care of themselves but I don't believe that," says Greg Pollock, president and chief executive officer of Advocis, a financial adviser industry association, citing renewal as a "significant issue."
All industries have an aging work force, but particular challenges await those aspiring to become financial advisers. Recent graduates in their 20s may prefer a salaried job in financial services rather than one based often, but not always, on commission sales of life insurance and other products to potential clients in their 40s, 50s and 60s.
"You are talking to closed doors and you are trying to open them as much as you can, but you are combatting many things, such as your age and location," says Oakville, Ont., resident Adam Laird, recalling his initial struggle to gain an industry toe-hold seven years ago as a largely commission-based adviser.
He eventually earned a six-figure salary with a boutique investment office before returning to Wilfrid Laurier University to earn his MBA this year. Ultimately, he hopes to work with a high net-worth boutique financial adviser or start his own firm.
Not everyone is suited for the industry, says Alex Zavisha, who earned a postgraduate certificate in financial planning at Humber College in 2011 and aims to earn his designation as a certified financial planner.
"Many people don't like the sales part and the traditional industry is sales oriented," says Mr. Zavisha. After three years with a major financial services company, he learned he preferred financial planning to trading securities. About to set up his own financial planning firm, Mr. Zavisha advises industry newcomers to "talk to experienced financial advisers and hear their stories to understand what they are getting into."
The industry suits those with an entrepreneurial bent, says Tony Bosch, executive vice-president of broker development for Hub Financial Inc., one of the largest Canadian wholesale-style providers of products and support for independent insurance and financial advisers.
"The potential has never been better for that right person," he adds, citing growing interest in financial literacy, rising concerns about household debt, the looming transfer of wealth from one generation to the next and, not least, the aging profile of financial advisers.
"We have to make more of an effort to bring new people into the business," says Mr. Bosch, whose firm expanded training and support a year ago. For example, someone with a licence to sell life insurance receives one week of training, 10 follow-up sessions and formal coaching from experienced business development specialists over a six-month period.
At Sun Life Financial Inc., commission-based career sales force advisers join the company with at least a licence to sell insurance products, receiving classroom and online training and mentoring from experienced advisers before going out on their own.
"We need to continue to promote the growth of our industry," says Rob Popazzi, assistant vice-president of sales force growth. "It is important for the company to look at the composition of the next generation … and say, 'Are we creating the right programs to help the younger generation join our great industry?' "
Three years ago, the company became lead sponsor of a financial planning case competition for college students, giving Sun Life exposure to potential top recruits.
At Sun Life branch offices, newcomers are paired formally and informally with experienced financial advisers.
University arts major graduate Aviva Huberman joined Sun Life's flagship office in downtown Toronto last fall, where she was paired with a mentor and given access to an informal network of established financial advisers at the branch. One of them is Mark Coutts, a certified financial planner and a 21-year veteran of the industry.
"Mark has a wealth of knowledge and many designations, and [I was] learning from the expert," says Ms. Huberman, who says of the experience "I wouldn't want it any other way."
Mentoring junior associates is a way to share best practices in a sector with increasingly complex product options, Mr. Coutts says. "When I trained 21 years ago, there were five mutual funds to offer clients; now, literally there are thousands [of them]."
Two years ago, the Royal Bank of Canada revised training for incoming advisers, says Jason Round, senior manager of financial planning strategy for RBC Financial Planning.
Beyond basic accreditation and knowledge of financial products, he says, new hires now have more tools for "difficult" conversations with clients, such as if they are falling short of their retirement goals.
The bank also pairs experienced financial planners near the end of their careers with those starting out. "We will tie those two together on a day-to-day basis so the intern has a chance to look over the shoulder of the mentor and vice versa," Mr. Round says.
Like other major financial institutions, RBC participates in on-campus recruitment fairs to describe job opportunities. "There is a preconceived notion that most, if not all, of the roles out there are commission-oriented," Mr. Round says. "It isn't necessarily so."
Renewing the ranks of financial planners is seen as an industry-wide challenge.
"The role of the financial adviser, who they are and what they do on a day-in, day-out basis, is not well understood," says Advocis's Mr. Pollock. "Even prospective employees or individuals who want to work in this industry don't really know the opportunities that exist."
Facts on the greying financial planner
The financial planning industry is growing greyer, according to a number of studies.
- The average age of personal financial planners is 45 years, with only 5 per cent under the age of 30, according to the Canadian Securities Institute, which offers a program of study for the designation.
- Of 17,000 certified financial planners in Canada, 49 per cent are more than 50 years old, according to the Financial Planning Standards Council, a not-for-profit standards and certification body. By comparison, one in five CFPs is under the age of 40.
- A 2014 profile of the small- and medium-sized financial advice industry found that 44 per cent of those with insurance, mutual fund and securities licences are 55 years or older, according to a PricewaterhouseCoopers study conducted for Advocis, an industry association. According to the study, 42 per cent of survey respondents have been in business for more than 20 years.