* Head count at independent firms has sagged for years
* Big firms with big training budgets lure most prospects
* Average age of advisers has increased
By John McCrank
TORONTO, June 23 Attrition is thinning the
ranks of independent financial advisers in Canada, a seemingly
inexorable trend that's forcing many firms to find and retain
star performers to make up for a smaller head count.
On average, financial advisers are getting older and new
entrants to the profession are ending up almost exclusively at
big, global firms, said William Holland, CEO of CI Financial
(CIX.TO), the only one of Canada's top five fund companies that
is not a global player.
"Whatever the high water mark for independent financial
planners was, I don't think that that will ever get hit again,
but I think the ones that are left will be more successful,
with bigger books and more professionalism," said Holland,
whose firm owns Assante Wealth Management.
"Let's say we started out at 1,000 financial planners," he
said, "and let's say we have 800 and change now because
advisers have merged together and formed teams and stuff like
that. My guess is we could have slightly fewer advisers again a
few years out but have materially more assets under
While CI has the resources to cherry-pick top advisers,
many smaller firms do not, said Sam Albanese, program
coordinator of the Financial Services Practitioner program at
Toronto's Seneca College.
In the past 10 to 15 years, the number of people joining
those firms has shrunk, he said, while many are facing serious
Many say the impending retirement of the baby-boomer
generation means that financial advice is needed more than
ever, but it also means that most advisers are nearing the end
of their careers.
The average insurance agent in Canada is 58 years old and
the average wealth manager is 53, said Albanese.
Part of the reason he sold his insurance brokerage firm in
2004 was because he was getting older and he saw the need to
get more people into the industry.
"We saw an opportunity, basically, to try to reverse the
trend," he said of the four-year-old Seneca program.
The advisers that come out of the program "are already
licensed and they've already got a number of the courses, so we
give them a well-trained individual."
Still, most fledgling advisers seek the security that the
big firms have to offer. Even if they have the training, they
might not have the street smarts to start off on their own.
The Seneca students are also snapped up by aggressive
recruitment campaigns by big industry players before their
eight months of classes are even finished.
Firms that have been really ramping up their recruiting
efforts include Royal Bank of Canada (RY.TO), the country's
biggest bank; BMO Nesbitt Burns (BMO.TO); Investors Group, a
member of IGM Financial Inc's (IGM.TO) group of companies;
Desjardins; London Life; and Sun Life Financial (SLF.TO),
The allure of those companies for new entrants is that they
often foot the bill for further training, which some smaller
and medium-sized firms don't have the resources to support.
"It's big bucks," said Albanese. "It all depends on the
company you go to, but I have heard of anywhere between
C$60,000 to C$80,000 a year to train one person, so it's a
fairly expensive proposition."
At CI, Holland said he will focus getting and keeping more
experienced advisers and helping them grow their books.
He said banks will dominate the distribution side of the
business and increasingly, asset management -- the same way
they do mortgages, wholesale banking, retail banking, and other
services. That said, Holland likes where CI is positioned.
"I just wish we were 1997 again and you didn't have banks
as competitors. You had tons of financial planners and more
financial planners coming into the business, but it's a
(Reporting by John McCrank; Editing by Frank McGurty)