Firms opening their doors to newcomers: Includes chart

“They come into the business without a client list and they build in the traditional way,” says Agnew, describing the three-year training program in which recruits learn how to build a book of business. “After that period, they’re well trained, well skilled and well versed, so Years 4 and beyond are our payback period.”

The President’s Club even appears to be turning the heads of more established DS advisors. “I see rookies coming through here with more training than I’ve ever had,” says a DS advisor in Western Canada.

But no amount of training can guarantee success. “For someone growing a book of business, this is a very difficult firm to stay with. I’ve seen 20 people leave in four years,” says a DS advisor in Ontario.

Some DS brokers blame this on the lack of follow-up after the new advisors complete their training, while others blame the high compliance requirements and the grid payout that creates the need for a large book to generate a sustainable income. Whatever the reason, “We have too many dropouts,” says an Ontario advisor.

It’s a similar story at Toronto-based ScotiaMcLeod Inc. The firm is looking to hire 100 rookie advisors this year, says Hamish Angus, head of ScotiaMcLeod. But like DS, advisors at ScotiaMcLeod say recruiting rookies and keeping them around are two very different things.

“So many little things could be done. It’s a shame training classes are ‘come and go.’ People come in, stay two or three years, and fall out. The firm hasn’t figured out how to make investment advisors succeed,” says a ScotiaMcLeod advisor on the West Coast.

But that won’t stop the brokerage from trying. ScotiaMcLeod is holding four classes for rookie advisors this year, while representatives are headhunting other professionals, such as accountants, hoping to entice a large number to the firm. (These recruits must also attend the classes.)

CIBC Woody Gundy is hoping its mentorship program will enable it to hang on to its recruits. The program pairs rookies with established advisors, who then share their experience and expertise.

“If you look at the brokerage industry, the biggest impediment to success is the initial stage of developing a client base,” says Tom Monahan, head of Toronto-based Wood Gundy.

After 18 to 24 months of training, the senior Wood Gundy investment advisor provides the intern with $10 million-$15 million in assets to manage on his or her own.

Mentoring recruits

“If we do our job correctly and bring in a big group of younger advisors, we can move some of those client relationships over and put them into a better service model,” says Monahan. “A new advisor may bring new ideas to the table. That is why we’ve established the intern program.”

But some existing advisors aren’t sure the mentorship program should replace formal training. “There is no training for rookies. They have to learn from their associates,” says a Wood Gundy advisor in Ontario.

Edward Jones, whose Canadian operations are based in Mississauga, Ont., is also taking the mentoring approach. When the firm recruits, it isn’t looking for people already in the financial services industry. It hires university graduates to spend six months working at a branch. If the rookies qualify after that trial period, the firm will put these prospective brokers into its investment representative training program.

“In other firms, it’s sink or swim. Here, we have a huge mentoring group of advisors who make sure rookies keep their heads above water and continue to grow and replicate success,” says an Edward Jones advisor in Ontario.

“That is one way to get young, bright, energetic people into the firm,” says Gary Reamey, principal and head of Edward Jones’ Canadian division.

But, again, a comprehensive training program does not guarantee success. Out of the 40 university graduates who enter the investment representative training program, Reamey says only half end up as investment advisors. And he admits he would like to see that number increased to 70%.

@page_break@”A lot of firms say they don’t want to hire people right out of university because graduates don’t know what they want to do. But we have developed a program we think can help us find good people,” says Reamey, who himself started at Edward Jones after completing university.

But others believe the firm’s training program just isn’t enough. “We need more professional training, not just mentoring. It’s all hocus-pocus,” complains an Edward Jones advisor in Ontario.

National Bank Financial Ltd. is also opening its doors to university graduates. The Montreal-based firm offers summer jobs to fourth-year students who want to pursue careers in financial services. The rookies are trained and receive salaries for up to two years while they build their books.

“We are bringing rookies on board more often than we did five or 10 years ago,” says Gordon Gibson, senior vice president and managing director.

“I was shocked by how many young people are at National Bank Financial when I started,” says a National Bank Financial advisor on the East Coast who has been at the firm for two years and in the industry for more than 20. “The energy that these young people bring to the industry is astounding, and it definitely adds to the positive atmosphere here.”

Adds a rookie advisor in Ontario: “I have a lot of freedom, and the people here are very helpful to someone starting out. No stress, no competition in the office. Everyone helps everyone.”

But that training may not be available to older newcomers to National Bank Financial who have previous experience in the financial services industry. “Training is pretty well non-existent here,” notes an advisor in Ontario. “If there is any, I haven’t seen it. You’d think that someone who has only been with the firm for two years would have had the subject of training brought up — that there would be mandatory and optional training available.”

Training and mentorship programs aside, even the most rookie-friendly firms insist on seeing productivity. Although Edward Jones would not say what targets it expects from its rookie advisors, other companies require at least $300,000 in gross revenue by the fifth year. IE