It’s no surprise that the average age of advisors across all channels of the financial services business has increased, as more and more firms either shy away from hiring rookies altogether or hire older rookies entering a second career.

The average age of all advisors surveyed in Investment Executive’s 2010 Report Card Series increased by a full year, to 47.7 from 46.7 in 2009 — an average age that had remained stagnant for several years.

Advisors with banks and credit unions were the youngest of the bunch; but with an average age of 43.3, this figure still increased by more than a year, from 42.1 in 2009. Advisors with dealer firms were the oldest on average, at 49.8 — again, up by a year from 48.8 in 2009.

Industry executives say the rise in average age is nothing but a reflection of the demographics in the general population. And many add they couldn’t be happier about the trend, as they believe that having a few wrinkles can be advantageous in working in the financial services industry.

“I don’t think an older and wiser sales force is a bad thing,” says Richard Mills, executive vice president, managing director and national sales manager of Toronto-based BMO Nesbitt Burns Inc.’ s private-client division. “It’s an advantage having advisors who lived through events such as the 1987 market crash and have seen various market cycles. It brings perspective for their clients.”

However, some industry observers are worried that a shortage of young people entering the business could leave the public greatly underserviced in the future. This is a problem that financial services firms will need to address, says Sam Albanese, insurance industry director at Seneca College in Toronto: “Over the next 20 years, more than $1 trillion of wealth is going to flow from one generation to the next, and that younger generation isn’t going to want to speak to their parents’ advisor; they will want to relate to someone their own age.”

Younger advisors also play an important role in that they help older advisors serve the needs of their lower-priority clients, Albanese adds: “As advisors age, they are going to want to take more time off and, as a result, spend less time with their B and C clients. That’s where younger advisors come in.”

Advisors also have noticed the age gap — and many say it’s a problem. Says an advisor in Ontario with Toronto-based TD Waterhouse Private Investment Advice: “I think they need to develop models that are flexible to attract junior advisors. There is a huge opportunity, and someone is missing the boat.”
@page_break@Chief among the reasons advisors are getting older, says Albanese, is the fact that once people break into the industry, they don’t want to leave.

Another reason why the average age has ticked upward is because firms are focusing on hiring rookies in their mid-30s as opposed to those in their mid-20s, says Mills: “The age at which you start saving and need an advisor is likely in your 30s. Advisors in their mid-30s are further along in their life experience and career development, which helps them relate more to those clients.”

These older rookies are more likely to be people who have decided to enter financial services as a second career and can leverage their previous work experience to build deeper relationships with clients, says Roberta Wilton, president and CEO of Toronto-based CSI Global Education Inc. : “Firms are looking for advisors with experience, whether that’s in sales, client relationships or just having good people skills. [Clients are] getting older, and they aren’t going to sit there with a 25-year-old rookie.”

As a result, says Albanese, some firms have even veered away from hiring rookies altogether because of the related costs and time it takes to run a training program.

And advisors who operate their own independent branches, separate from a parent firm, find themselves in a serious catch-22 when it comes to recruiting new staff, says Albanese: “The owners of offices, themselves, are in their 40s to 60s. They are suffering from a lack of new blood, but they don’t have the time or money to train fresh talent.”

Meanwhile, institutions such as banks and credit unions — which are dedicated to recruitment and full-fledged training programs — have the youngest advisory teams. Of all the advisors surveyed in the Report Card series, those with Edmonton-based Servus Credit Union were the youngest, with an average age of 38; this was followed by advisors at Vancouver-based Vancouver City Savings Credit Union and Toronto-based Bank of Montreal, who were 40 years old, on average.

Vancity, in addition to its training program, has been successful in attracting young advisors because of the credit union’s socially responsible stance, says Michael Atkinson, director of sustainable wealth management with Vancity: “A lot of younger employees are looking for more than a paycheque from an employer; they want a firm that connects with their values.”

Other firms, such as Waterloo, Ont.-based Sun Life Financial (Canada) Inc., have even gone as far as creating a Facebook page to click with, and attract, new talent.

“The purpose of social media is promoting and bringing awareness,” says Angela Fennelow, director, recruiting and selection, career sales force, with Sun Life. “For people who hadn’t previously considered a career as a Sun Life advi-sor, the Facebook page has added to their awareness.”

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