the watch of time

An article in the May edition of The Insurance & Investment Journal reminds me of one of the interesting evolutions in the financial advisory business, which I saw starting to impact the business before I left in late 2013.

Increasingly, younger people have been entering the fray with social media savvy, and to some extent incorporating this into their marketing. One young colleague in his twenties particularly exemplified this attitude. He was continuously using Facebook and Twitter to contact clients and market to prospects. This practice developing approach wasn’t a whisper in the old days.

Reflective of this trend of, particularly, newer and younger consultants, our company had instituted applicable compliance procedures. These edicts covered not only contact parameters, but also connecting with management to oversee postings.

The author of the Journal article notes that a major challenge of the financial services industry, focusing on the insurance side, lies in a segue problem: attracting millennials to the business during a time where it is dominated by an aging workforce whose mentoring approach is reflective of the previous century. Previously, “insurers brought their advisers into the fold with mentoring from older and wiser in house agents”.

Insurers, and advocacy groups such as Advocis, are refreshing and reshaping programs to help millennials join ‘the fold’, recognizing modern needs and realities. For instance, the days of cold calling, knocking on doors, and pressure closing are considered by millennials as ‘things of the past’, which don’t work nowadays.

Recruiting material, as from Sun Life, helps newbies understand the role of the advisor, “and the ability to become autonomous by building their businesses”.

Part of the ongoing challenge stems from technology and people skills: millennials want to access immediate, handy technology, while communicating by texting to rather than talking with someone.

While sales and product training continue to be ongoing for development, many millennials are stirred by parent advisors wanting to train their children.

However, there is also increasing effort to provide advisors with limited experience through groups such as the Horizons Club, wherein the goal is “to provide extra attention, sales tools, conferences and meetings for young advisors to give them the latest information they need to move forward in sales”.  Meanwhile, financial advisors’ association Advocis is playing a role helping entrants deal with ‘meaty’ business issues such as getting established, writing marketing and sales plans, and understanding tax issues.

The latter involves mentorship, as “There are 40 different activities advisors can work through with a mentor to help them become inducted into the business”. Also, mentoring is evolving, networking with new advisors in both informal (a local pub) or formal (the office) settings.

There is an important reciprocal opportunity for the senior, mentoring advisor: developing and establishing potential successors. While this can alleviate concerns from the transitioning out advisor, there is a rather significant third party which needs to be satisfied: the clients who are to be allocated. A given client needs to be convinced that “this wet-behind-the-ears advisor can take care of their business, does understand their needs”. Inevitably, some will not be comfortable with the prospect. Discussing the succession process with younger advisors may require offering to help out with financing, or a salary, in the early stages.

These endeavours should help millennial advisors appreciate that efforts are being made by the industry to welcome them, as they adapt their skill sets to what continue to be the priorities of client service in a successful practice.