To help appeal to younger clients and women, some insurance firms are recruiting a more diverse workforce.PeopleVideos/iStockPhoto / Getty Images
Every budding insurance advisor knows the early years are a tough go.
“Insurance is literally the last thing people want [to buy],” says Herman Chan, president and co-founder of Crimson Financial, a planning and wealth management firm in Toronto.
If an associate survives the initial lean years of rejection, they can be on track to build a durable and thriving business based on client and industry network referrals, as well as healthy commissions and bonuses.
It’s no wonder many seasoned insurance brokers never want to leave.
“It’s kind of crazy that someone in their late 50s would be considered prime age, but in the insurance industry, even at 65, people don’t stop because it’s so lucrative,” Mr. Chan says.
“Once you’ve been around for a while, you don’t just sail off into the sunset.”
The insurance industry is skewing older and there are service gaps for younger clients: the changed nature of work and relationships is leaving many Canadians uninsured or underinsured.
Benefits are typically offered through employers, but the rise of contract or part-time work has created coverage gaps that highlight the need for additional risk protection outside the workplace.
To bolster their salesforces with younger professionals, brokerages are resorting to several strategies. These include poaching talent from other firms by touting the benefits of their corporate culture, offering higher bonus rates, or dangling the possibility of eventually buying a block of business from an older advisor within the organization, Mr. Chan says.
Large brokerages are also becoming more proactive by identifying top talent within their own firms and bumping their compensation, he adds.
Adam Mamdani, senior vice-president, distribution and channel management at Sun Life, says some senior advisors may be delaying retirement because of the difficulty of letting go of the client relationships they’ve built over decades.
There’s also a lack of succession planning. “Have they recruited an associate advisor?” he says. “Have they trained and developed someone?”
Mr. Mamdani says he expects to see a large majority of advisors leave the industry through retirement and succession planning over the next 10 years, adding that this will likely create a significant opportunity in Canada for the next generation of insurance advisors.
In response, Sun Life plans to add 650 advisors in Canada this year, in addition to the 2,600 it already has.
“We believe the industry needs to be human-led. AI is going to enhance the way we do business, but there are not enough people out there talking to Canadians,” he says.
He attributes the shortfall in younger advisors in part to the high costs of recruiting, training and developing associates.
Having younger advisors who can resonate with Gen Z or millennial clients is essential because people want choice and flexibility, he says.
“Insurance and wealth are very personal. Clients need to feel they can trust the advisor, which is why we have recruiting campaigns and initiatives focused on diversity,” he says.
Almost 40 per cent of Sun Life advisors are women, and he says that’s an important area to grow.
“We need more women who can speak to the female population, because when you look at financial planning, it’s a family decision,” he says.
Female role models also help attract more women to the industry, he adds.
To relieve the burden on seasoned advisors to train and onboard new hires, Sun Life offers a paid six-month training program designed for people who are new to the financial industry and require licensing, education and hands-on experience with clients before moving to an advisory role.
Half of the firm’s new advisors are referrals from existing advisors, Mr. Mamdani says. “They could be someone who has a passion to help an existing advisor build their business and perhaps become a future shareholder of that business.”
One trend among younger people entering the industry, Mr. Chan says, is a focus on comprehensive financial planning instead of only selling insurance.
“They realize that if they get additional designations such as the qualified associate financial planner (QAFP) and the certified financial planner (CFP), and work for an independent financial planning firm, it can be an amazing career helping people manage risk and invest their money without selling them a product right away,” he says.