* Gen Y advisers needed to bring in young clients
* Many new financial advisers quit during first two years
* Industry needs tech-savvy new blood to replace
By Andrea Hopkins
TORONTO, Nov 9 Tammy Oribine was a financial
planner for just a couple of months when she realized it was not
the job for her. She did not like sales, did not feel confident
enough about the products and hated the face-to-face contact
that is a staple of the business.
"A lot of it has to do with personality -- I don't find I'm
the most personable person, and I'm bad at small talk," Oribine,
29, said with a laugh.
But there were other reasons the job did not appeal. The
salary was based in part on sales, and thus unstable. She was
afraid clients would not trust her because she was young.
So she took her Certified Financial Planner designation and
became an assistant to a top adviser in London, Ontario - a role
that would not require her to sell anything.
Oribine's desire for a steady paycheck is a hallmark of
Generation Y, the so-called " M illennial" generation born after
1980 and coveted by marketers and employers alike.
That is one of the issues that Canada's wealth management
industry faces as it grapples with the challenge of attracting
Gen Y's as both advisers and clients in an age when chronically
poor returns have taken the shine off investing and financial
"The reality is our industry is going to struggle if we
don't embrace this generation both from growing our client base
and servicing our businesses with new advisers," said Mike
Cunneen, senior vice-president at Freedom 55, a unit of
Great-West Lifeco, Canada's second-largest life insurer.
Greg Pollock, president and chief executive of Advocis, the
Financial Advisors Association of Canada, says the industry
needs tech-savvy new blood to replace the baby-boomers - born
mostly in the 1950's. Big banks, insurers and storefront wealth
managers also need to attract the next generation of clients.
"The average age of an adviser in our industry is 58, so
that's getting up there. It certainly creates some opportunities
for younger people," said Pollock.
A JOB THAT EATS ITS YOUNG
To keep more Gen Y newbies on track, Freedom 55 has put
together a program that gives young advisers hands-on
experience, mentoring and solid training to soften what is
typically a very rocky first year or two in the business.
Some 60 percent of new financial advisers don't make it
through the first two years on the job, Pollock said, though the
grim statistic is not exclusive to young advisers.
Freedom 55's Cunneen likes another number better: 43 percent
of clients pick their first adviser before the age of 35,
suggesting younger advisers are best placed to serve younger
clients, who speak their language culturally and technically.
That is exactly the strategy that is working for at least
one Gen Y adviser who works in the same office as Oribine.
Justine Zavitz started out as a financial adviser at her
mother's insurance firm at 24, fresh out of school and with a
deep understanding through her mother of the long hours and
networking that is needed for success.
Six years later, she organizes wealth management seminars at
local medical and dental schools, targeting future doctors
before they have even thought of saving.
"I find they can relate a lot easier to me. There is that
understanding that we're both just starting our careers, and
we're going to work together for the next 50 years while we
build up their assets together," Zavitz said.
"With the older clients, I use the same thing. I'm going to
be around for a long time, so whether you retire tomorrow or 25
years from now, you know I'm going to be here and I'm going to
be looking after your insurance."
But it was not always a smooth transition. Zavitz recalled
many older clients who did not trust her age, and who would call
her mother to double-check her advice. But her patience and good
training - she has a bachelor of commerce as well as a
designation as a certified financial planner - paid off when her
mother would offer the same financial advice she had.
"And slowly but surely those clients are turning out to be
my favorite people to deal with. It was a matter of learning to
get that trust from them," she said.
But the biggest challenge may be in retaining financial
advisers from the millennial generation.
In two separate studies by PwC on Canadian banking and
millennials in the workforce, the consulting firm found big
differences in the way Generation Y perceived the financial
industry and in what they expected from employers.
"Gen Ys really do matter, but they have some quite different
requirements of employers," said Karen Forward, director in
PwC's Financial Services People and Change practice.
"As far as financial advisers, one of the challenges they
have is because they also have a different work ethic than those
people advising in the Gen X or Boomer generations."
This younger generation of worker excels at technology and
brings energy to projects. But they've been colored by their
negative exposure to the financial crisis and value their
personal life above their work life, Forward said.
Zavitz agreed, accepting the characteristics of her own
generation even while she does not share them.
"I think that's just the way Gen Ys were brought up," she
said. "They want regularity and a regular income stream and a
pat on the back when they do things right, and that's maybe not
what this industry holds for them."