It’s fair to say that Mary Thorpe has seen plenty of change since writing her advisory exams back in 1980. It’s been an interesting and challenging ride for Thorpe and although a lot has changed, the fundamental human aspects of the business remain the same 38 years on.
“I always had an interest in finance growing up, and when after school I was given the opportunity to work for Dean Witter, I said sure ‘why not’,” Thorpe says. “From there, I kept taking the courses and was able to spend some time on the trading desk. My career grew as a fluke, really.”
Thorpe has operated through many periods of tumult, but marks out 1999 – 2001 as the most challenging years she has experienced. “It was just at the point of change with technology, business was becoming more automated, and the markets were coming down from all-time highs,” Thorpe says. “Technology has changed a lot. I didn’t have emails back in the day and that has really changed things. Nowadays, you get responses much quicker. It makes things more accessible for the client but more demanding on the advisor.”
The increased impact of technology has been a constant theme over the past two decades and in recent times Thorpe has seen younger Canadians flock to robo-advisors, a trend of which she is skeptical.
“The biggest challenge with robo-advisors is that they don’t actually offer any advice,” Thorpe says. “The worst thing under 30s can do is lose money because, once that happens, like in 2000, people lose appetite for the market and lose that opportunity to invest. People who lost money in 2000 are scared, and because of that fear they have lost a lot of money by not investing over the past few years.”
Thorpe has been registered on the IIROC side for the majority of her career and is comfortable with disclosure requirements and tightening regulations, although she does concede that some of the new initiatives, like the need to send out Fund Facts, place extra strain on the advisor.
Thorpe is also against the ban on embedded commissions. “When people are first starting out investing, they can’t afford fee based models so they are driven to the banks, which means a lack of advice,” Thorpe says. “An advisor can’t take on a $10,000 client with no embedded fees and do a financial plan and help them build their portfolios, they’d go broke. However, younger advisors coming in knowing that to be the reality; it’s going to become more difficult for clients, they will be the losers.”
Thorpe has recently hired a young man straight out of school who she is teaching the industry. She believes that young advisors need to work with a mentor and “pay their dues” before starting to invest clients’ money.
“Young advisors need to learn how to deal with clients, how the whole back office works, and how the process works from the time they open the account,” Thorpe says. “So many young advisors are given a seat and a list of investments and told to sell them, but it shouldn’t be a sale it should be a profession. There should be a period of learning before you invest because it is people’s livelihoods at stake.”
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