The financial services industry is greying slowly but surely. Financial advi-sors’ median age jumped to 46.7 in this year’s Advisors’ Report Card — up one full year from the 45.7 median in 2005.

But the dearth of young advisors doesn’t seem to concern some firms. Many believe it is the nature of the business to hire older advi-sors — especially those with experience, which saves employers the cost and time of training.

“Yes, advisors are 50, but this is a career that can go on for a number of years. In fact, a few years’ experience in other realms can transition you well and help you provide clients with financial and life planning because you can relate to what they do,” says Ken Parker, president of Calgary-based mutual fund dealer Generation Financial Corp.

“For a lot of advisors, this is a great industry, so they never think of leaving,” adds Ross Sherwood, president and CEO of Vancouver-based Odlum Brown Ltd.

Although retirement may seem a far-off concern for some advisors, the rising average age of advisors indicates potential problems for firms. Older advisors have unique challenges and priorities, and when it’s time for an advisor to leave his or her book of business, client relationships need to be considered. The smooth succession of a business takes time and planning.

Advisors say their firms are getting better at succession planning. Scores for the support provided by firms for buying and selling a book of business jumped to 7.4 this year, from 6.5 in 2005.

The process of passing on a book differs among firms. Some firms redistribute a book without any input from the retiring advisor. Other firms work with advisors to develop a succession plan for the business. Still others leave it to the advisors to ensure that their clients will be taken care of.

But the firms that received the greatest accolades from their advisors are those that provided support for advisors to develop a succession plan.

Take Laurentian Financial Services in Toronto as an example. “We maintain a lower minimum production level than some of our competitors to allow our senior advisors to stay in the industry while we prepare successors for them,” says Steve Cole, regional vice president of sales and recruiting.

Such planning not only helps the retiring advisor, he says, but it also assists younger advisors at the firm to build up their business.

“It would be nice to have something concrete,” says a West Coast advisor at Regina-based Partners in Planning Financial Services Ltd. “A lot of planners are getting up in years and looking to sell, and I would be looking to buy.”

In an industry in which many firms prefer to hire advisors who are already established in the business, bringing in young advisors doesn’t seem to be a priority. But as some firms are discovering, it is critical to keeping business in the firm.

“We have an aging advisory population, like everyone else in the industry. If we don’t attract rookies, we’re not going to have people interested in buying those books,” says Laurentian’s Cole.

Grooming advisors to be successors requires training and resources. It’s an investment some firms, such as Woodbridge, Ont.-based Hub Financial Inc. , are willing to make.

“We have to train new blood to be the next generation in the business,” says John Lutrin, Hub’s chief marketing officer and executive vice president in Vancouver. “We’ve made noise in the industry about finding new blood to go forward, to ensure that older advisors have a succession plan in place and a younger advisor to hand their business over to. We will do everything we can to ensure there are young advisors available and that they are trained to take over books of business.”

Leander Dueck, senior vice president of individual distribution at Winnipeg’s Great-West Life Assurance Co. , says his firm looks for successors among subadvisors working in specialized areas within the organization. But the transition is not always easy.

Michael Wolfond, CEO of Part-ners in Planning, agrees with that strategy: “As a rep, you have to take a quantum leap. How far back should you go, if you’re a mature advisor, to bring in someone to mentor? How many years does it take to mentor an advisor, and how long does it take to turn over a good practice?”

@page_break@“You have to spend some time,” emphasizes Odlum Brown’s Sherwood. “You have to work out what’s fair to the buyer and the seller, which I don’t think happens that often. You have to think about who is the appropriate person to take over the book and how to tell the clients. It has to be done carefully and with a lot of sensitivity.”

Although finding a successor and transferring a book takes time, proper planning can pay off. “We encourage all our advisors to develop succession plans for their books of business, and to negotiate with the buyer what they believe is an appropriate purchase price,” says Nick Pszeniczny, senior vice president of London, Ont.-based Freedom 55 Financial.

And, Pszeniczny adds, an advisor who develops and carries through a succession plan and prepares his or her clients to work with the new advisor usually gets a high price for his or her business. IE