After a year and a half of operating in integration mode, Montreal-based National Bank Financial Ltd. (NBF) is ready to switch gears and start recruiting some new blood for its financial advisor ranks.
NBF’s wealth-management division has completed the integration of Wellington West Holdings Inc., having hived off the latter’s 39-advisor Wellington West Financial Services Inc. (WWFS) mutual fund dealership to Manulife Financial Corp.
Charlie Spiring, vice chairman of NBF in Winnipeg, says recruiting will be the NBF’s “No. 1 priority” for 2013. “We have a business plan that has strong organic growth sprinkled with recruiting industry-leading advisors,” he says. “We continue to add brokers. I think we had eight or nine join us last month. We have added significantly in London, Ont., Victoria and Nanaimo, B.C. It’s one-by-one guerrilla warfare. NBF has the best payout in the bank-owned space, and has been aggressive to pay for book-growing advisors.”
The bank-owned firm’s product shelf, combined with its broker flexibility, reminds Spiring of being at an independent firm, which, of course, takes him back to his Wellington West days. The bank’s brokers are helping to tell the NBF story, he adds, and he wants to introduce a compensation system soon to reflect their efforts.
NBF bought Winnipeg-based Wellington West in May 2011 for $333 million, a move that resulted in 170 new advisors licensed through the Investment Industry Regulatory Organization of Canada (IIROC) flying the NBF flag.
Although NBF looked at keeping WWFS’s 39 advisors and $900 million in assets under administration (AUA), NBF didn’t want to deviate from its IIROC model.
NBF also will complete the integration of HSBC Securities (Canada) Inc. and its 82 advisors into NBF’s wealth-management division in the first week of December. NBF bought HSBC’s retail brokerage in September 2011 for $206 million.
NBF now has about $74 billion in AUA, with slightly more than $8 billion coming from Wellington West and slightly less than $8 billion coming from HSBC Securities.
Not to be forgotten in the flurry of activity is that NBF has accomplished its long-standing goal of expanding its non-Quebec AUA to match that of its Quebec-based operations, says Dennis Stewner, NBF’s senior vice president and national manager in Winnipeg: “Previously, we would have had 250 advisors in the rest of Canada; now, we have almost 500. The goal was a 50/50 split.”
Now that all of NBF’s advisors are on a single platform, they will be able to focus on growth and providing better service to clients, Stewner says: “The benefit of having all of [the integrations] behind us now is we have almost 1,000 advisors pushing in the same direction. We have a great new scale that we can take advantage of as we look to enhance our platform.”
The melding of three firms into one has granted NBF the luxury of picking the best attributes from each and putting them together. For example, Stewner says, Wellington West brought an integrated fee-based platform, while HSBC Securities had featured some robust portfolio-management tools.
Dan Hallett, vice president and director of asset management with Oakville, Ont.-based HighView Financial Group, says he’d be surprised if NBF was truly finished the full integration of Wellington West, as that process is very involved operationally.
However, Hallett doesn’t think NBF has any tricks up its sleeve for its future development strategy: “One of the motivations for [the Wellington West and HSBC] deals was to obtain a presence west of Quebec. So, I expect NBF will continue pushing in that direction.”
Even though the acquisition market continues to shrink, Hallett believes there are still some good targets that could be had for the right price: “Wealth management remains an attractive industry, and opportunities for existing players to scale up and cut costs can increase profitability and, for players such as NBF, allow them to buy into market segments that they’ve not previously been able to penetrate. I don’t know that [NBF] has firmly established itself across the country, but it’s certainly making good progress on reaching outside of Quebec.”
Spiring might disagree on Hallett’s second point, but he wouldn’t on the last. Spiring would be open to another integration opportunity, he says, if a “friendly” situation arose.
“I would like to see the NBF product platform recognized as No. 1 in the industry,” Spiring says. “The climate is challenging for advisors and will continue that way until the macroeconomic situation clears up. This is the type of market in which the leaders will separate from the pack and take more market share, both for firms and individual brokers. NBF is now fourth among all firms after never being above sixth spot before. Perhaps it is our time to continue up the ladder of success.”
NBF will be very happy to continue to grow its business both in and outside Quebec, Spiring says; but if he was a betting man, he would put his money on Ontario and British Columbia leading NBF’s growth “in the near future.”IE
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