RBC Wealth Management Canada expects to sign all or nearly all of the 41 Gluskin Sheff financial advisors and support staff who were offered positions following the announcement that Onex Corp. will wind down the Gluskin Sheff business it purchased in 2019.
“It’s a really high-calibre group of people — really professional and dedicated to their clients,” said David Agnew, CEO of RBC Wealth Management Canada. “I’m really happy with the team that we’ll be working with in the future.”
Agnew said the majority of advisors have committed to joining RBC, and he is having more conversations this week. “I think we will get to a pretty good number, and I think the number is close to 100% of all advisors making the transition.”
Gluskin Sheff + Associates Inc. advisors, which Agnew said numbered “12 or 13,” have been given the choice to join RBC Phillips, Hager & North Investment Counsel Inc., which is also an investment counselling firm, or RBC Dominion Securities.
The advisors will not continue under the Gluskin Sheff brand as Onex retains ownership of the name, Agnew said. (Onex declined to be interviewed for this story.)
“Everybody from Gluskin Sheff will have a home [somewhere], there’s no question,” said Brett Evans, partner with Capital Markets Advisors LLC and a recruitment specialist, citing the advisors’ reputations and large books of business. “They’ll have no problem convincing their clients to go to RBC unless they’re diametrically opposed to a bank.”
Agnew’s message for clients and advisors concerned about joining a big bank is to focus on the strength behind a large organization.
“Gluskin Sheff is a much smaller company, but they’re coming into two entities that really have a boutique feel to them,” he said, referring to DS and PH&N. “We are larger, and we have many areas to help advisor teams and clients with a [premium] client experience. … Our goal is to make [the transition] as seamless as possible for clients.”
The street agrees. Scott Chan, managing director of equity research – financials with Canaccord Genuity Corp., wrote in a note that he expects “a large portion of Gluskin Sheff’s advisor teams to move over” as they’ll gain access to RBC’s “broad” investment offering, investment management resources, wealth planning expertise and family office services.
If all the advisors sign on, they will represent $8.2 billion in assets under management. Agnew added that members of Gluskin Sheff’s insurance team, which joined that firm in October 2022 from Sterling Park Financial Group, were among the staff offered roles with RBC Wealth Management Canada.
In January 2022, Gluskin Sheff appointed Dave Kelly, former senior vice-president and head of TD Wealth Private Wealth Management, as its head. When asked if RBC had offered a position to Kelly, Agnew said he and Kelly speak regularly as “partners on this transaction, and we’re focusing on the transition for the clients and the advisors.”
“Dave has not declared his intentions yet; it’s really going to be up to Dave and the Onex side,” Agnew said. “He’s a professional and I’ve enjoyed spending a lot of time with him over the past couple of weeks, and I would enjoy spending time with him in the future.”
Gluskin Sheff was founded in 1984 and went public in 2006. Onex acquired Gluskin Sheff four years ago for $445 million. At the time, Onex’s CEO Gerry Schwartz said the deal would provide greater investment options to clients of both firms by “combining Gluskin Sheff’s public securities investing platforms with Onex’s private equity and private debt platforms.”
Agnew also sees value in Onex’s private equity and debt offerings, as well as its liquid alts lineup. For the moment, RBC will have exclusive distribution of those products under the DS and PH&N channels.
“We were a little bit behind — probably about a year and a half [ago] we started putting more of a focus on the alternative markets,” Agnew said, adding that Onex’s products complement and don’t compete with RBC’s existing alts lineup.
Of the $8.2 billion in assets under management, Chan expects Onex will “maintain a large portion of private credit ($1.6 billion) and private equity ($123 million) assets, but not the assets in public credit/equity strategies.”
The winding down of Gluskin Sheff represents the loss of another independent wealth management firm as the industry continues to consolidate. According to the Investment Industry Association of Canada, there were 166 investment industry firms in Canada as of June 30, 2022, down from 196 at the end of 2012.
“Since the [Gluskin Sheff] purchase, Onex has experienced a hard time growing its asset base,” Chan wrote.
“Being in retail wealth management can be difficult generally because of the increasing compliance burdens and technology demands and the potential for client litigation,” Evans said.