Forget thriving – simply surviving as a financial advisor today takes solid work. Advisors are spending longer hours setting up new clients’ plans and portfolios – while knowing they won’t see a red cent until fees start rolling in – and studying the latest industry rules and regulations. They also need to play counsellor when stock market volatility strikes.
As interest rates wobble and passive robo-advisory strategies gain traction, we asked advisors and financial industry experts to talk about the biggest challenges they face.
William Britton, certified financial planner and principal, Tidal Financial Management Inc., Kingston, Ont.
William Britton, certified financial planner and principal, Tidal Financial Management Inc., Kingston, Ont.
“The biggest challenge is probably the same as it’s been for a long time: the credibility of our profession. The hurdle is always that there’s just such a wide variety of quality – and lack thereof.
"It’s really important for us to step up our game and give consumers a safer jumping off point. Typically people who are looking for our help are at their most vulnerable. They need to feel they can trust someone, share their information and get some help.
"Unfortunately, because of a couple of bad apples – or maybe because we haven’t done a good enough job as an industry highlighting the positives and the really strong members in our business – getting people to trust an advisor or sit down to talk to someone in the first place is really challenging.”
Jackie McCann-Scott, financial advisor, Invested Mama Inc., Conception Bay South, Nfld.
Jackie McCann-Scott, financial advisor, Invested Mama Inc., Conception Bay South, Nfld.
“The first word that comes to mind is ‘capacity,’ our ability to provide service. More and more, people are asking, ‘What am I getting for the money I’m paying you?’ You need to constantly demonstrate your value.
"That means staying on top of new products and services, incorporating technology into your business in a way that improves the client experience, and doing things that surprise and delight your clients above and beyond the pure planning.
“With the professional bar being raised across the country – which I think is fantastic – you have to keep your own skill set and designation current. There are so many demands, it’s about stopping and saying, ‘Okay, what can I incorporate next into my practice that will have the biggest impact?’ You have to be strategic.”
Debbie Hartzman, certified financial planner, Professional Investments, Kingston
Debbie Hartzman, certified financial planner, Professional Investments, Kingston
“The biggest challenge is getting clients to understand all the new disclosure rules. They’re more confusing than enlightening. That’s what I was dealing with yesterday. I had a client who was freaking because the markets were falling. Awhile back he sent me an e-mail asking, ‘I want to know what I’ve been paying since I started working with you six years ago.’
“I was in Israel travelling, and it really ruined the day for me. My first response was, ‘This guy doesn’t trust me.’ I’ve provided income for him in a tax efficient way for the last six years. That’s a lot of value behind the scenes.
“With the media focusing strictly on fees, forget the value we offer. Clients are tuned into, ‘What am I paying? What am I paying?’ They’re not equating it to any service – and they’re not listening to advice. They’re only focused on their fees. I think much to their detriment.”
Daniel Martens, insurance and financial advisor, Hub Capital Inc., Stratford, PEI
Daniel Martens, insurance and financial advisor, Hub Capital Inc., Stratford, PEI
"Continuing education credits should be mandatory in the Eastern Canadian provinces. They’re not mandatory in Prince Edward Island, New Brunswick, Nova Scotia or Newfoundland, but they’re mandatory everywhere else. That’s roughly between 20 and 30 credits per year that you’re supposed to get in continuing education, such as compliance, ethics and taxation rules.
“I stay up to date and many advisors I know do, too. But then you have some people out there who don’t. We need educated advisors to educate our clients. If you have an advisor who hasn’t leaned anything new about tax rules in 15 years, they’re going to be giving not-so-great advice.”
“That’s something we’d like to see implemented, to make sure advisors are held to a high standard and to weed out the few people who shouldn’t be in the business any more.”
Robyn Thompson, certified financial planner and president, Castlemark Wealth Management Inc., Toronto
Robyn Thompson, certified financial planner and president, Castlemark Wealth Management Inc., Toronto
“One of the biggest challenges advisors are facing is the incorporation of artificial intelligence into their practices and using it to augment their practices and give their clients better service.
“AI allows for efficiencies and smarter algorithms. Things that take us a lot of time to do can now be done through computer generation.
“So I embrace AI, but clients will always want someone to give them judgment, and AI is not going to do that. It gives data. So combine the two and use that data to give better recommendations to your clients.”
Jillian Carr, associate advisor, Riverview Insurance Solutions, St. Albert, Alta.
Jillian Carr, associate advisor, Riverview Insurance Solutions, St. Albert, Alta.
“Look at robo-advisors. I’m so relationship-focused and I worry sometimes that because the robo-advisor channel seems so easy, people say, ‘Oh, you just put your money in and you leave it.’ For a client who isn’t educated about money and investing, how does that change their financial platform? What does their wealth management look like if they just go with someone they can’t even have a conversation with? If the market is volatile – which we’re in a very volatile market right now – who do you talk to when you’re on the ledge thinking, ‘Oh, my gosh! My money is down seven, eight or nine per cent. Who do I call?’
"We live in this world where technology always seems to be the best way to go. But I look at technology and the financial services industry and wonder, how is this going to impact clients? And how it is impacting my business? I have paper notes and a paper calendar here as backup because I don’t trust technology 100 per cent just yet.”