Businessman hand showing financial report on table

In a challenging period for capital markets that led to recent job cuts, wealth management is proving to be a bright spot for Canaccord Genuity Group Inc.

Canaccord reported a net loss attributable to common shareholders of $13.4 million in its most recent quarter, compared to a $12.6-million loss a year earlier.

But while the firm’s capital markets divisions reported a loss of $7.6 million for the quarter, excluding significant items, Canaccord Genuity Wealth Management saw net income of $36 million, an increase of 45.6% from the previous year.

“Following a brief period of modest recovery, market conditions in our first fiscal quarter continued to be challenging for capital raising and M&A activities,” said Canaccord president and CEO Dan Daviau in the Q1 earnings release. “Our wealth management businesses have continued to perform well, providing resiliency in our results.”

Amid those challenging conditions, Canaccord recently cut approximately 3.7% of its global workforce, or 6.5% of its North American workforce, Daviau said Friday morning on a quarterly conference call.

“The majority of employee departures occurred in our capital markets business, in addition to smaller numbers in IT and operational roles,” Daviau said.

The cuts came after the end of the most recent quarter on June 30, and Daviau said they would be reflected in a restructuring charge of approximately $10 million in the next quarter’s earnings report.

But while the deal-making environment has been difficult, Daviau said the wealth management businesses have held up through last year’s challenging market. The firm’s global wealth business contributed revenue of $191 million in the quarter, a 17.8% increase from the previous year, accounting for more than half of total company revenue in the quarter.

Client assets under administration in the firm’s global wealth management business increased by 7.2% year-over-year to $97.3 billion — up 9.8% in Canada, 4.8% in the U.K. and 15.2% in Australia.

In Canada, Canaccord said the increase to $37.2 billion came from net inflows to existing advisors, recruitment activity and new assets from the May 29 acquisition of Mercer’s Canadian private wealth business.

Daviau said the firm’s advisor recruitment pipeline remains “robust” even though the number of advisors hasn’t changed a lot.

Canaccord had 147 advisory teams in Canada as of June 30, two more than the previous quarter and one more than a year ago.

“We’ve cycled out retiring advisors [and] poor-performing advisors with much stronger advisors,” Daviau said. “Our average book per advisor in Canada continues to grow.”

Canaccord is emerging from a failed bid from a management-led group to take the firm private. In June, the group led by Daviau and chairman David Kassie let their proposed $1.1-billion offer expire after a regulatory issue at one of the firm’s subsidiaries meant the deal wouldn’t be approved before an August funding deadline.