Andrew Auerbach, BMO Nesbitt Burns, Investment Executive November 2018, page 12
Andrew Auerbach, BMO Nesbitt Burns

Andrew Auerbach, head of Toronto-based BMO Nesbitt Burns Inc., is looking to build out the brokerage’s services by developing partnerships with parent Bank of Montreal’s (BMO) private and commercial banking divisions.

To do that, though, he will need the backing of Nesbitt’s 950 investment advisors. Thus, Auerbach’s first priority as head of the brokerage, a role he took on this past February, has been to get out to the branches and speak with the firm’s advisors and employees alike.

“My big focus for this first year,” says Auerbach, “[is] building a deep relationship with our advisors, with our teams and, [within our] headquarters, understanding our priorities [and] the strategies that were well underway already.”

Although taking such action may be typical for new management, getting out and gauging Nesbitt advisors’ satisfaction is particularly important for Auerbach after what could best be described as a tumultuous couple of years for the firm.

Investment Executive’s 2017 Brokerage Report Card revealed a steep drop in advisor morale at Nesbitt: the firm’s performance ratings declined by half a point or more in 21 categories that year compared with 2016. Subsequently, Charyl Galpin, then head of Nesbitt, left in August of 2017 to take on another executive position at BMO.

Fortunes at Nesbitt have begun to turn: the brokerage’s advisors rated the firm higher by half a point or more in 16 categories in this year’s Report Card. (The research for this Report Card takes place from early January to mid-February – and some advisors noted at that time that Auerbach’s appointment was a move in the right direction.)

Auerbach is out to build on this momentum by fostering greater engagement with Nesbitt’s roster of advisors. He points out that when management meets with advisors, executives must demonstrate that they understand advisors’ priorities and explain why certain things are being done within the company, as opposed to simply outlining what has been done recently.

“[Nesbitt advisors are] entrepreneurs, so they definitely don’t want to be told what to do. They don’t want to be forced to do things,” Auerbach says, “but they do want to be exceptional for their clients.”

Getting buy-in from advisors and potential recruits into the business is important for the parent bank’s growth plans. Although Auerbach will not provide specific numbers, he says BMO has “very aggressive growth ambition” for its brokerage arm.

That plan for growth will focus on helping Nesbitt’s current roster of advisors grow their businesses and recruiting new advisors who fit the firm’s business model. Thus, advisors must have an entrepreneurial business focused on the high net-worth (HNW) market and operate on a fee-based or discretionary business model.

Part of the growth plan revolves around bringing Nesbitt and other divisions within BMO closer together – literally. The brokerage is creating shared branches in which private bankers work alongside Nesbitt’s advisors.

Having private bankers work within Nesbitt’s branches makes sense, says Auerbach, because of the expertise they have in working with HNW clients to provide specialized services beyond investment management – such as estate planning.

“There’s no question that being able to offer solutions that extend into banking on-site – within our branches – is very powerful,” Auerbach says.

Currently, there are, collectively, 15 private bankers located in Nesbitt’s offices, and Auerbach says his goal is to have a banker at every one of the brokerage’s 47 offices across Canada.

Nesbitt also is developing closer ties to BMO’s commercial banking business. Indeed, BMO has branches across the country in which private bankers, senior bankers from the commercial banking business and Nesbitt advisors work together. In fact, there already are, collectively, 19 senior bankers working in Nesbitt branches.

Although Nesbitt advisors – and those at other bank-owned brokerages – often worry that their firms are being taken over by their parent banks, Auerbach doesn’t believe that having Nesbitt advisors work with private and senior bankers at BMO is cause for concern.

“[This strategy] is not about the bank imposing its will on BMO Nesbitt Burns; it’s actually quite the opposite,” Auerbach says. “It’s about how BMO Nesbitt Burns is accessing the best of what the bank has available and that, to me, is an important distinction.”

Instead, having Nesbitt advisors work with BMO’s private and senior bankers is all about ensuring Nesbitt’s advisors have the tools and services their clients expect, says Auerbach, adding that ensuring advisors are part of that transformation is equally important.

This won’t be the first time Auerbach has helped to bring about change in one of BMO’s divisions. In his 18 years at the bank, Auerbach has helped grow businesses and transformed branch networks within the private bank and retail bank divisions.

Auerbach began his career in financial services working part-time at Canada Trust Co. while he attended York University, from which he earned a bachelor’s degree in psychology. By the time he graduated, he was hooked on financial services and began working full-time in that firm’s mutual fund business. By the time Auerbach left Canada Trust in 2000, he was regional director of the trust company’s private investment counsel division.

Subsequently, Auerbach did a brief stint at Toronto-based Assante Wealth Management (Canada) Ltd. before joining BMO in 2000 to work within its private banking division’s investment research group. Two years later, Auerbach was running the private bank’s investment-counselling business; he then took on the role of that division’s chief operating officer in 2007. In 2009, Auerbach was named head of BMO Private Bank in Canada and Asia.

Auerbach enjoyed being part of a business that served the HNW market and one that was very much focused on gaining scale while working in BMO’s private banking division.

Auerbach then jumped to BMO’s commercial banking business. In 2012, he was named that division’s senior vice president for the Greater Toronto Area before becoming executive vice president and head of distribution for BMO’s Canadian personal and business banking in 2015. Auerbach oversaw the transformation of the physical design and integration of technology into BMO’s branch network while in that role.

These experiences have cemented the idea in Auerbach’s mind that Nesbitt advisors can work together seamlessly with other divisions within the parent bank. More specifically, clients of the commercial and private bank often are business owners who need very specialized help in the transition of their business to the next generation.

“I feel that because I’ve [worked] in different parts of the company,” Auerbach says, “[that] really has opened my eyes to how complementary these [services] are.”