Trevor Theobald decided to stick with his career as a financial adviser and joined Chris Poole at his Toronto-based firm, CWP Financial Services.Kevin Van Paassen/The Globe and Mail
A chance encounter at a wedding last year was enough to convince Trevor Theobald that he had a real future as a financial adviser.
He had been in the industry for less than a year when he was introduced to Chris Poole, the operator of Toronto-based CWP Financial Services Inc. under the banner of Sun Life Financial. Later, after a three-and-a-half-hour meeting at Starbucks, Mr. Theobald's doubts about his career had been erased.
"There are a million and one sayings from famous entrepreneurs that say people quit just before they see success," the 32-year-old says. "I thought about getting out, too."
Mr. Theobald subsequently joined Mr. Poole's firm as an associate adviser, and the pair opened a second branch of CWP at the foot of Yonge Street in downtown Toronto last July. "To have that mentorship was an absolute game-changer," Mr. Theobald says.
But while the partnership helped reignite Mr. Theobald's career, his thoughts about giving up are not unique. Roughly 60 per cent of new financial advisers fail to make it through their first two years on the job, according to Greg Pollock, president and chief executive officer of Advocis, an organization that represents Canadian financial advisers and planners.
The reasons are varied, from unrealistic expectations and increased competition to consumer distrust of the industry and the increasing number of do-it-yourself options available to investors.
"One of them is the fact that it's a hard job and it doesn't appeal to all," says Anthony Boright, president of Toronto-based InvestorCOM Inc., which provides technology to firms in the financial sector.
Many young advisers come from Canada's big banks, so they have no clients on their books. They start by enrolling friends and family, but when that option has been depleted, they're on their own. "In some respects it's a high-pressure sales environment," Mr. Boright says.
Before joining Mr. Poole's firm, Mr. Theobald had avoided pursuing friends and family, determining that if he was going to be successful he would have to do it on his own. "There's nothing wrong with going after your network, but once it's tapped out, if you don't have the resources or the wherewithal, it gets cold and dark quickly," he says.
As a former salesman for a custom home builder, he knew how to sell, but he didn't know how to reach out to people. So he put on financial seminars at public libraries and other places, hoping to pick up new clients.
It was largely a fruitless chase, partly because that kind of shotgun approach, as he calls it, was not the best way to go. "You have to find a niche where there's a large opportunity that you can specialize in," he says.
Mr. Poole, on the other hand, had that part figured out. Having started his own construction company at age 15, as well as a loose-leaf tea business that he sold to Teavana seven months in, the now-31-year-old was well versed in the business world. With that knowledge as his ammunition, he entered the financial advisory business intending to work with three specific kinds of clients: corporate executives, medical professionals and business owners.
So while his business background gave him an instant network of clients that he could target, it also offered an understanding of what business people need from their advisers.
"It doesn't surprise me that younger advisers have a higher percentage of failure," he says. "Sometimes it can be because they're not thinking about their role through the eyes of [the client]."
With 38 per cent of financial advisers in Canada planning to retire in the next 10 years, according to a 2014 survey by software firm Maximizer Services Inc., the opportunities available to young advisers have possibly never been greater.
One challenge to the industry is that young people entering the field don't necessarily want the same things as their predecessors.
"I think that millennials don't want to work in your traditional investment firm any more," says Dave Nugent, portfolio manager and chief compliance officer for WealthSimple, a Toronto-based online portfolio management company.
"You're seeing it not just in the wealth management space, but you're seeing it in investment banking, you're seeing it all over Bay Street and Wall Street," says Mr. Nugent, 30.
Financial management firms must begin creating the kind of workplace culture that millennials crave if they want to replace older advisers moving into retirement, he says.
WealthSimple, for instance, has created a salary structure that is not based purely on commission, which relieves some of the sales pressure. "We've seen younger advisers prefer a model that is a little bit more about the client relationships and less about bringing-in-the-next-asset kind of thing," Mr. Nugent says.
It's an approach that is paying dividends for CWP. While Mr. Poole concentrates on building the business, he is able to leave his existing clients in Mr. Theobald's hands.
"He knows how to handle the softer details of financial planning," Mr. Poole says, "because it's not just products and sales, it's relationships."
Paul Attfield