Given the high percentage of uninsured Canadians and the difficulty of recruiting and retaining new advisors, industry leaders believe young people should hear about personal finance and life insurance in their school years. The new generation would then be more aware of the need for insurance, as well as the option of having a career as an advisor, said participants in an insurance CEO roundtable discussion at the Congrès de l’assurance de personnes 2022 (Life Insurance Convention) on Nov. 15 in Montreal.
Among the three invited panelists, Denis Ricard, president and CEO of iA Financial Group, stressed the importance of not regulating the distribution industry to the point of discouraging advisors from meeting with less affluent clients (see his comments in the December 2022 Insurance Journal). Ricard said that these clients may turn to online platforms if they do not have an advisor. It would be illusory to think that these clients will buy their life insurance online on their own, he said.
Michael Aziz, co-president and chief distribution officer at Canada Protection Plan (CPP), said he believes that educating young people about personal finance early in their schooling could be one of the solutions. "There should be more financial education in elementary and high school. They talk about everything except (personal) finances. My 11-year-old daughter doesn't know what stocks are, what bonds are, what insurance is... If we did more of this in schools, maybe as kids get older, they'd be more interested and seek out insurance on their own, like they do for an accountant or a lawyer," Aziz said.
Or maybe their parents would one day want their children to become insurance salespeople, like some want to become doctors, he added. "How many of you started out in your careers saying you wanted to be an insurance salesperson?" he asked the audience, comprised primarily of advisors.
A field that helps people
Michael Aziz recounted how he began his career in the field at Imperial Life, a company that merged with Desjardins in 2001. He saw an ad in The Toronto Star and pursued the opportunity without knowing what he was getting into. "I found myself in a field where you help people. That's what we do!" Aziz said he feels that the reputation of advisors is sometimes that of trying to sell at all costs.
Denis Ricard said he has seen a big shift in perceptions in this regard. "The depth of advisors has increased so much! When I started my career, I saw them as salespeople. Now I see them as advisors," said Ricard who joined iA Financial Group in 1985 as an actuarial analyst.
Ricard shared an anecdote to demonstrate the benefits that a financial advisor can bring to younger people. He recommended an advisor to his own children, who had become professionals, yet were worried about their financial future. "Today, they are confident and secure about their future because the advisor listened to them, worked with them to prepare a budget and helped them work through their needs," he said.
Lack of financial planning
Robert Dumas, president and CEO of Sun Life Quebec, also relies on education to raise awareness. "The earlier financial literacy is taught in school, the more the profession will be recognized like any other. It's a long-term issue," Dumas said. He said he doesn't believe in a short-term solution to the advisor shortage. "Like the restaurant staffing shortage, we'll have to learn to live with it," he added.
Dumas said he believes in a holistic approach. According to his observations, 30 per cent of Canadians are uninsured. But he said it's more important to talk about financial plans first, since 50 per cent of Canadians don't have one. "The foundation is the financial plan. After that, it might be insurance products or investment products. You have to stop talking about insurance at the beginning and ask, 'Do you have a financial plan? Do you know where you're going? That's going to be the key. Because if I come in and talk about insurance first, I sound like a salesman."
Rejuvenating the sales force
Michael Aziz pointed out the importance of rejuvenating the sales force. "The industry needs younger advisors," he said. "The 30-year-old client doesn't necessarily want to do business with a 60-year-old advisor. First, we need to recruit more young people. They have a different mindset and different ways of communicating, whether it's through text messages, Facebook, TikTok or Instagram," he said.
Aziz said mentoring also needs to be facilitated, reminding us that it's hard for new advisors to establish themselves in the career. "We need experienced advisors who have been active for 20-25 years to be able to share their block of business with younger advisors. If the younger advisor has clients to call when he starts, he will be more successful.”
Dumas added that for those under 40, the search for an advisor begins with the Internet. "We need to help young advisors brand themselves on the Internet. We're doing it in a sustained way, because it will be a door-opener," he said.
He added that he believes that advisors with a strong brand presence online could create a snowball effect. If this results in demand surpassing supply, advisor compensation will inevitably increase, he said. "These advisors will attract others. I'm optimistic," he said regarding the recruitment challenge.
