Vancouver-based Qtrade Financial Group has been busy implementing a major rebranding strategy and announcing a number of new product launches this autumn following the merger of Vancouver-based subsidiary Qtrade Fund Management Inc. with Kitchener, Ont.-based Meritas Financial Inc. earlier this year, which led to the creation of OceanRock Investments Inc.

“Traditionally, in a lot of situations in which two fund companies merge, you see a lot of collapsing of funds and a lot of redundancies,” says Manmeet Bhatia, Qtrade’s chief investment officer. “But we actually expanded our lineup because we believe in the core concept of choice between socially responsible investing and traditional types of investments. So, we went out and launched several new portfolios to give this option to individual investors.”

Qtrade starting looking for another fund company to partner with after learning that several of its credit-union clients were looking for additional SRI investment products — offerings that Qtrade did not have at the time.

“We started to look around in the market to see who is doing a great job out there in terms of SRI,” says Scott Gibner, Qtrade’s CEO. “And we didn’t have to do much research to realize that Meritas had built up a very strong brand and was very well respected in the SRI space.”

In November 2009, Gibner sat down with Gary Hewton, former CEO of Meritas, to discuss the possibility of merging — and soon realized that Meritas hadn’t had significant success in delivering its SRI products into the credit-union distribution channel. The two men took only a month to decide that working together was going to be beneficial for both firms.

Qtrade began offering retail clients and non-bank firms an online brokerage platform in 1999. In 2004, it expanded to include a full-service brokerage, investment products and a Mutual Fund Dealers Association of Canada arm. In addition, Qtrade became the core wealth-management back-office platform for many of its institutional financial services partners across Canada.

Today, Qtrade’s services also include insurance services, traditional and SRI investment products and institutional services, and providing custody and brokerage services to portfolio managers who are managing client assets on a discretionary basis.

The merger with Meritas was completed this past March; and in early May, Qtrade announced that its QFM subsidiary (manager of the QFM and Meritas funds) would be renamed OceanRock Investments.@page_break@“Manmeet and I wanted to come up with a name that would reflect our West Coast roots and thought that OceanRock was a perfect fit,” says Gibner. “Mountains represent strength and the ocean can respond to changes and movements quite well — those were all the things that we want to be associated with, especially with the added SRI component.”

Over the summer months, Qtrade focused on merging the two firms’ back offices as well as integrating their employees and product lineups. Hewton joined the Qtrade team as president of OceanRock Investments; he says becoming part of the Qtrade family was a great opportunity for Meritas’ approach to SRI to reach a much wider audience.

“Qtrade has embraced our SRI solutions,” adds Hewton, “and, in the past two quarters following our merger, the Meritas assets have grown significantly, along with an expanded product lineup and a much larger sales force.”

With the merger of the back offices complete, management has now spent the past few weeks focusing on promoting the new OceanRock brand, as well as the recent launch of five new portfolios: Meritas Income & Growth Portfolio, Meritas Growth Portfolio, OceanRock Income and Growth Portfolio, OceanRock Growth Portfolio and OceanRock Balanced Portfolio.

With the combination of both traditional and SRI funds within a given portfolio, clients are now able to choose among holding 100% traditional mutual funds, 100% SRI funds or a combination of the two — an offering menu that is one of a kind in Canada, says Gibner: “When we merged Meritas with our OceanRock family, it was a pretty significant win for us. We are now the only firm in Canada that can offer investors the ability to hold traditional mutual funds with SRI mutual funds, all within a managed portfolio — and that is pretty unique in itself.”

The new portfolios bring the total number of OceanRock funds, including the Meritas funds within OceanRock, to 17; these include eight fund-of-funds portfolios, with three of the previous OceanRock funds recently rebranded. At the same time, in order to align the OceanRock funds and the Meritas funds, certain management fees and sales charges have been changed, Bhatia says, with some clients experiencing fee reductions because of that.

Previously, Qtrade had offered multiple series under the QFM brand. With the new offerings, Bhatia wanted to focus on simplicity. In order to do so, Series B, C and D units of the OceanRock funds have been redesignated as Series A and F units.

In terms of additional product launches or immediate merger plans, Gibner does not have anything on the table at the moment. But, he says, he will continue to look at ways of enhancing and expanding Qtrade’s product line.

“While we are quite proud of the recent launch of our traditional and SRI solutions,” Gibner says, “we are always looking at the needs of our advisor base and the trends in the marketplace to ensure we are always providing quality, relevant solutions to meet the investment needs of our clients.”
IE