The aging financial advisory workforce in Canada and the need to shift to a younger demographic has been a concern in the investment industry for about a decade.
A 2019 survey of 2,000 of members of Advocis, the Financial Advisors Association of Canada, found that 51 per cent of advisors were 55 years of age and older. More than half of those surveyed had been working in the industry for more than 20 years.
Is that a bad thing? Older advisors say they bring skills that fit well with the future of the sector, benefiting clients and younger team members alike.
Jane Alm, senior investment advisor with the Angus Watt Advisory Group at National Bank Financial Ltd. (NBF) in Edmonton, says when she started in financial services in the late 1970s, the sector was “all transactional.” The shift in recent years toward a greater concentration on wealth management and financial planning is a natural fit for older advisors who are more comfortable with the relationship model of the industry, she adds.
“Clients know I’m speaking from experience, and it’s not just what somebody told me to say. I provide concrete examples of what I’ve lived through and what the results of doing certain things are,” Ms. Alm says.
The recent rise of technology platforms such as robo-advisors and discount brokerages isn’t having much of an impact on older advisors or driving them out of the business, she says. “Even if there’s someone at the end of the QuestTrade line, they’re not going to have the same relationship with the client that I will. I’m half-psychologist some days. That’s not their role.”
Cameron Kirkby, branch manager and investment advisor at CIBC Wood Gundy in Abbotsford, B.C., and a 34-year veteran of the industry, says that he has shifted his business to a more all-encompassing financial planning model to serve clients and their families better during the past 15 years. It has resonated with older and younger people alike.
“The longer you’re in the business, the better communication skills you develop,” he says. “There’s some comfort to older clients that you’re older, you know what you’re doing and not wet behind the ears. But … younger clients [also] appreciate what you bring to the table – the experience, the ability to comfort them through difficult times, having been through many yourself.”
Greg Pollock, president and chief executive officer of Advocis, says there’s a need for a mix of age groups within any financial advisory practice. He cites the intergenerational transfer of wealth, during which $1-billion will change hands between 2016 and 2026, as a big reason why.
“The question is, who should be assisting those younger Canadians when they receive those funds? Should it be experienced advisors or younger advisors? There’s an argument for both,” Mr. Pollock says. “One of the ways we address that as an industry is older advisors pairing up with younger advisors.”
Lenore Davis, founding partner at Dixon, Davis and Co., a fee-only financial planning firm in Victoria, and a 30-year veteran of the industry, agrees with that perspective, adding that a diverse client base requires a diverse advisory team.
“It’s a lifetime relationship. I’m in my late 60s. Someone who’s 55 years old is not going to want to build a relationship with someone for three years. They’re looking at the next 20 years, and that isn’t me,” she says. “That’s why you have to have a mix of demographics. But do they need to punt the old farts out the door? No.”
There’s another crucial advantage to having a team of advisors of different age groups, and that’s the mentoring that older advisors can provide their younger colleagues.
Mr. Kirkby says he is constantly working with the younger members of his team, including his two daughters.
“The younger ones are learning the business. The more senior ones can say, ‘This is how the business has evolved and this is where the business is going,’” he says.
Ms. Alm of NBF says she has been providing more mentorship to younger team members entering the practice who haven’t yet experienced major stock market declines and volatility. “It’s not just mentoring advisors, it’s everyone who’s client-facing. If your support staff sounds like they’re panicking, that sends a very wrong message.”
The onset of the COVID-19 pandemic was a clear example of the wisdom and level of service that older advisors can provide, and of the industry adapting, as it always has, to crisis, Mr. Kirkby says.
“When I talk to my peers, ... they were thankful to be able to take their clients through it. … It made investment advisors realize we really do have a role in this other than just managing money for clients,” he says.
Mr. Kirkby and Ms. Davis say being a mature advisor is letting them have the most fun they’ve had in their careers.
“All the hard work we did in our 30s and 40s is now paying off. … Now, I can sit back, have fun and enjoy my clients. I’m not results-driven. I’m experience-driven,” Ms. Davis says.