A merger or acquisition is a delicate dance for the corporate leadership and financial advisors working for the firms involved. For advisors, there’s the introduction of new partners — and swinging to a whole new rhythm.
Three firms in this year’s Dealers’ Report Card have either gone through these motions during the past few years or are going through them now, and each has had its own unique experience. Most recently, Bank of Nova Scotia completed its acquisition of DundeeWealth Inc. in early February. (Both firms are based in Toronto.) And by the end of June, Mississauga, Ont.-based Investment Planning Counsel will complete its purchase of Regina-based Partners in Planning Financial Services Ltd. As for Richmond Hill, Ont.-based Global Maxfin Investments Inc. , it is still in the process of merging its operations with those of Calgary-based Professional Investment Services (Canada) Inc. , which it acquired in late 2009.
During a merger process, advisors need the comfort of knowing their firm is financially sound — and that they can continue to run their businesses as usual.
Says a DundeeWealth advi-sor in British Columbia: “We have been assured from the top that they will allow us to keep our independence and remuneration.”
Earlier this year, three executives — David Good-man, Dun-dee-Wealth’s president and CEO; Richard McIntyre, the firm’s ex-ec-utive vice president and head of retail; and Chris Hodgson, group head of Scotiabank’s global wealth-management division — met with about 700 DundeeWealth advisors.
“This is really the time to go out and talk about stability,” says McIntyre. “Obviously, when you’re bought, people feel a little bit uncomfortable about the situation.”
For advisors at PIP, the amalgamation-in-process with IPC has also not produced any major changes. Says IPC president Chris Reynolds: “There’s been no real disruption to anyone’s business, which was our objective.”
An IPC advisor in Alberta with PIP approves of the way the acquisition has been handled thus far: “They’ve delivered on everything: transition of share ownership from old to new, maintaining our grid payouts and keeping the back-office system until they perform their due diligence.”
Of those IPC advisors with PIP surveyed, 78% say they are “positive” about the acquisition. The rest were neutral; none were negative. In fact, many were glad to have IPC’s financial stability — and some have even heard rumours of IPC adopting PIP’s back-office platform, which is provided by Univeris Corp., although Reynolds says the jury is still out on that.
For advisors, the back office makes a difference. This past October, Global Maxfin fully converted PIS advisors to Winfund Software Corp.’s platform from the Univeris platform. It was another milestone on the long, rocky road toward integration.
Compliance was the main factor. PIS’s former Australia-based parent, which had acquired the firm in 2006, had run into regulatory issues, and it was left up to Global Maxfin to sort them out. Says Global Maxfin president Bruce Day: “In some ways, we just had to push [compliance] on them quickly. And that created a lot of backlash.”
That wound has partially healed. Says a Global Maxfin advisor in Alberta with PIS: “It’s better now because, boy oh boy, did we have growing pains. It’s no longer my chief area of concern.”
Global Maxfin advisors with PIS were also pleased with their firm’s new corporate culture. Some pointed to management. Says a Global Maxfin advisor in Alberta with PIS: “[We have] accessibility and candour from head office.”
Adds a colleague in the same province: “We get responses very quickly when there’s an issue.” IE