Advisor shares his own path and the necessity of balance between analytical and interpersonal skills
Scott Starratt realized, early in his career, that the CFA wasn’t for him. The son of a banker, Starratt was keen to pursue a career in finance. He completed his BCom at the University of Alberta while working as a bank teller before transitioning into the nascent days of the mutual fund sales business. He took his Canadian Securities Course, obtained his Canadian Investment Manager designation, and took level one of what has long been seen as the gold standard for the securities industry: the CFA.
Passing level one was easy enough, Starratt says it was basically a review of his BCom material. Level two, however, he found challenging enough to prompt some reflection. He already had a reasonably successful book of business, and he knew that he was not going to be the kind of advisor who picked stocks to beat the market. His strengths were in planning, service, and communication. So he switched tack, pursuing his CFP instead. Now Starratt is the investment advisor and portfolio manager at Starratt Wealth Management of Canaccord Genuity, having built a successful practice on the basis of planning and service, he explained that as the industry has shifted, it may be time for its leaders to reflect on what skills they want to prioritize.
“When you're in retail advice, it's the psychological side of this business. And it's the selling side. I know that sounds bad to say, but you are selling in a way, you're selling your services, you're selling your ideas, you're selling a reason why the client should invest in a particular security. So I think those softer skills are more and more important,” Starratt says. “I always joke that I would rather hire a B student with strong interpersonal skills than an A student who spent their life studying in their dorm room. We can all go to a robo-advisor that will do security selection, for right or wrong, good or bad, but to walk someone through the passing of their partner, or how to leave a legacy to their kids, that’s where the real value is.”
Starratt still very much believes that designations like the CFA can hold tremendous value, and that analytical and financial skills remain table stakes for this industry. He notes, though, that those foundational pieces of knowledge can be achieved through a number of avenues that suit different people. He stresses the more fundamental point that a background in business or finance doesn’t always make someone a great advisor. One of the most successful young advisors in his own ‘rookie class’ had a BFA in music. She had obtained other education to back up her financial knowledge, but her study of the arts had made her a more complete character and a better advisor.
A good advisor, Starratt says, has to be able to understand a complex financial concept or product and explain it well. The understanding rests on that classic financial analytical sensibility that the industry has valued for so long. The communication side is what Starratt sees as ‘selling,’ the ability to tell a story that ordinary people without financial backgrounds understand. Perhaps more importantly, telling those people a story that fits into the unique context of their own lives.
Bringing people with those more empathetic skills and talents into the industry, Starratt says, begins with telling them about it. He notes that many young people aren’t aware of this career and how positive it can be for advisors and their clients. The combination of freedom, earning potential, and positive impact is a unique value proposition that many people without financial backgrounds don’t know about. Starratt believes that this outreach should begin at the high school level, but not just in telling students about financial advice on career day. He argues that financial literacy courses, which are becoming increasingly common, should allow students with demonstrated interest and aptitude to learn more about careers in the financial services industry. Since financial planning and advice sits at the intersection of interpersonal and analytical skills, early exposure to financial literacy could help show a new generation the value of this career and build talent pipelines for the industry.
That pipeline may be increasingly crucial for this industry, as the largest cohort of advisors begins to retire. Many firms and practices have built strategies to manage the succession crisis, but large-scale cohorts of new advisors may not be coming. Starratt notes that a number of factors could be to blame: impatience on the part of retiring advisors and young associates, a lack of forward planning, or a lack of fit. He notes that the best advisors, though, have emphasized their support for young talent.
“The best advisors, I have always found, are good mentors. Having a good mentor can, of course, help, you know, in your career and direct you in the best way, or at least give you some food for thought so you can decide on your path,” Starratt says. “But, I think bringing people to the table, bringing people into the industry really has to start with a passion for it, and the ability to communicate those ideas to your clients.”
Scott Starratt is a Portfolio Manager at Canaccord Genuity Wealth Management. His views, including any recommendations, expressed in this article are his own only, and are not necessarily those of Canaccord Genuity Corp (Member: CIPF/CIRO). Investing in any of the asset-class(es) mentioned here may not be suitable for all investors, as there are different types of risks involved with this investment strategy. Even if suitable to your level of risk tolerance, they may not be appropriate for your portfolio, depending on what other investments you hold. Commissions, trailing commissions, management fees, and expenses all may be associated with fund investments. Fund investing is not guaranteed, values change frequently, and past performance may not be repeated. Diversification and asset allocation do not ensure a profit or guarantee against loss.
