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Toronto-based Echelon Wealth Partners Inc. and Vancouver firm PI Financial Corp. are merging in an effort to add scale and grow their wealth management business, the firms said on Tuesday.

The firms applied for regulatory approval for common ownership effective April 1, and they plan to amalgamate their operations by early next year. Terms of the deal were not disclosed.

Echelon CEO and director David Cusson will be the merged firm’s CEO, while PI chairman and CEO Jean-Paul Bachellerie will serve as president and chief operating officer. PI and Echelon will run independently until the amalgamation.

The merged firm would have 500 employees — including 210 investment advisors and more than 80 working in capital markets — and more than $12 billion in assets, the release said.

Its combined capital markets franchise would be the second-largest in the country outside of the banks, it said, citing FP Informart.

“The combined firm will have substantial employee ownership, and a clear path for increasing it,” the release said. The remaining ownership will be shared between RCM Capital Management and Miles Nadal of Peerage Capital.

RCM, a Vancouver-based asset manager, acquired PI in 2020 in a joint venture with Miami-based private equity firm H.I.G. Capital.

That year, PI was embroiled in allegations of fraud over Gary Ng’s acquisition of the firm in 2018. The Investment Industry Regulatory Organization of Canada last year fined Ng $5 million and issued a permanent ban from the industry.