Five Canadian advisors reveal what carried them through the years their books could not pay them
A monthly commission payout of about $17 did not cover a cell phone bill, let alone downtown parking.
Wealth Professional put one question to five advisors: why do new advisors leave in their first three years, and what gets the survivors through. The $17 month belonged to Adam Bighill, associate portfolio manager at Wellington-Altus Private Wealth in Winnipeg.
“The hardest moment my first three years was honestly receiving a commission payout for the month of probably $17.00,” Bighill said in an email interview with Wealth Professional. “This obviously came nowhere close to even paying my cell phone bill, let alone my parking downtown.”
Bighill entered the industry in 2019 while playing professional football for the Winnipeg Blue Bombers of the Canadian Football League (CFL).
“My paycheck from professional football allowed me to subsidize my learning and ability to build my business in the early years. I was working and building for nearly free, while meeting the rigorous demands of pro football, knowing that one day I could make it pay off.”
“My paycheck from professional football allowed me to subsidize my learning and ability to build my business in the early years.
Adam Bighill, Wellington-Altus Private Wealth
No Canadian research tracks how many advisors leave within three years of licensing.
In the United States, Cerulli Associates put the rookie advisor failure rate at more than 72 percent in its US Advisor Metrics 2023 report, measuring trainees who left before becoming fully fledged advisors. That figure is American and does not describe the Canadian market.
Investor Economics, part of ISS Market Intelligence, puts the average Canadian advisor age at almost 53, up from about 50 in 2015, with advisors over 55 making up almost 40 percent of full-service brokerage advisors and managing about half of all assets and revenue. LIMRA, in material for its Canada annual conference in May, described the country’s full-time advisor population as aging and contracting.
Every survivor had a head start
Each advisor who described getting through the early years named an advantage new entrants do not typically have.
Thomas Brière, senior wealth advisor and portfolio manager, said the stretch before his book could support him came down to persistence. “That said, I was fortunate to have an excellent mentor and to join an established business, which made this stretch easier in my case than it is for many,” Brière told Wealth Professional by email.
“I was fortunate to have an excellent mentor and to join an established business, which made this stretch easier in my case than it is for many.
Thomas Brière, senior wealth advisor and portfolio manager
Gabriel Zitoli, a financial advisor at The McClelland Financial Group of Assante Capital Management Ltd., never built a book at all.
“I didn’t have to build my own book, and I don’t own one today. That structure makes the early years far more financially viable, because you start with a base income, although it also limits upside potential.”
“I didn’t have to build my own book, and I don’t own one today. That structure makes the early years far more financially viable, because you start with a base income.
Gabriel Zitoli, The McClelland Financial Group of Assante Capital Management Ltd.
Bighill credits joining Charlie Spiring’s team at Wellington-Altus. “When I got my license in 2018, I took a few interviews across the industry and everybody said that ‘when I retire, then give them a call,’” he said. “When I met with Charlie and Wellington Altus, he said why not start right now?”
Heather Holjevac, a certified financial planner (CFP) at Holjevac Financial Group, started inside a large institution. “Working within a large financial institution gave me structure, exposure to different areas of financial services and the opportunity to learn from experienced professionals,” Holjevac said in an email to Wealth Professional.
Why new advisors leave
The economics changed with the revenue model, according to Brent Allen, executive vice president and head of sales and distribution at IG Wealth Management.
“As the industry has moved toward fee-based advice and recurring revenue, a new advisor building from scratch needs clients and a foundational level of assets before the practice produces enough recurring income to support the business,” Allen said in an email to Wealth Professional.
Holjevac said it takes at least three to five years to gain credibility and momentum, and that the third year is where many advisors decide the effort outweighs the reward, at the same time their firm scales back its financial support.
“I think we underestimate how difficult it is to build a business from the ground up. Commission-based compensation, the pressure to find new clients and the time it takes to establish trust can create financial strain before an advisor has had the opportunity to establish themselves. Being a good advisor and building a successful business are two very different skill sets.”
Brière said new advisors expect to earn from their book too soon. “I think a lot of people want everything right away. They expect to walk in, sign clients left and right and live off their book quickly. Business development happens over a long period: you plant seeds and harvest them years later.”
Zitoli said the gap between pay and effort exists in both structures. “There’s a building period where your pay doesn’t match your effort, whether you’re building your own book or being assigned clients through a firm,” he said, adding that many entrants want analyst or portfolio management roles instead.
Brière named two further causes, market-linked income and firm fit. Fee-based advisors earn more when markets rise and less when they fall, he said, and some people “may simply not have found the right firm.”
What was missing
Brière named undefined goals and, when he started more than ten years ago, the absence of a tech stack. “What was missing early on was clearly defined goals, whether from my mentor, my team or the firm.”
Zitoli said advisors at different firms do not share what they know. “What’s missing is collaboration with advisors outside your own firm. Sharing information is often seen as giving up a competitive edge, when there’s a lot we could learn from each other.”
Holjevac said mentorship has narrowed to products and sales, and that the office environment went with COVID-19. “Today, I think we need more practical mentorship that goes beyond products and sales to include client acquisition, business development, relationship building and the realities of running a business,” she said. “Additionally, just being in an office environment, which facilitates collaboration is missing post Covid.”
“A firm has to do more than recruit someone and wish them well. Training, a clear framework, mentorship, and ongoing coaching all matter. New advisors need help developing both their planning skills and the business disciplines required to build a sustainable practice,” Allen said.
“A firm has to do more than recruit someone and wish them well. Training, a clear framework, mentorship, and ongoing coaching all matter.
Brent Allen, IG Wealth Management
IG’s response is to widen the entry points, Allen said, through internships inside advisor teams, salaried planning roles with an established client base, an entrepreneurial path with income support during the start-up period, and team-based roles within existing practices. He reported year one retention above 80 percent for newly appointed entrepreneurial advisors, higher when team members and employee roles are included.
“Few firms are hiring new advisors, and we are proud that IG is a place that can still support the right person with an amazingly rewarding career opportunity,” Allen said.
Holjevac said the industry needs different compensation and business models, including fee-for-service planning.
“We can’t keep recruiting young people into an industry that expects them to build a business using yesterday’s business model without giving them the tools, mentorship and financial runway to succeed.
Heather Holjevac, Holjevac Financial Group
