Canada's newest independent brokerage firm, Wellington-Altus Private Wealth Inc., is betting that it can compete head-on with the industry's bank-owned behemoths by putting clients first and partnering with entrepreneurial financial advisors who share the company's values.
The firm's launch comes at a time when the Big Six banks dominate the brokerage space and the number of independents is shrinking through consolidation and business failures.
Charlie Spiring, chairman of the Winnipeg-based Wellington-Altus, believes that "the industry needs more independents who think differently, act differently and put clients at the top of the triangle."
Spiring contends that unlike the banks, independents are not tied to selling bundled investments, proprietary products or meeting sales quotas. This allows the independents to focus on meeting the needs of clients, he says, while "avoiding real or perceived conflicts of interest. There's no question that there's tied selling at banks."
Wellington-Altus, which opened its doors on April 17, brings together a closely knit group of past and current investment industry colleagues. The firm was co-founded by Spiring (who built Wellington West Holdings Inc. into a $10-billion firm before selling it to National Bank Financial Ltd. (NBF) in 2011) and Todd Degelman, former national sales manager at Wellington West.
Both Spiring and Degelman, now vice chairman and national sales manager of Wellington-Altus, left NBF earlier this year to start their new firm - with the full support of the parent bank, National Bank of Canada.
Also part of the Wellington-Altus family reunion is Shaun Hauser, a co-founder of Wellington-Altus and its president and chief operating officer. Hauser, who also left NBF as vice president, advisor strategy and support, and was senior vice president, operations and sales at Wellington West before that.
To add depth and breadth to the new firm, Spiring partnered with Toronto-based Altus Securities Inc., co-founded by another set of former colleagues, Ben Kizemchuk and Paul Jelec, who were part of brokerage firm Midland Doherty Financial Corp. (That firm, after a number of mergers, was acquired by Merrill Lynch Canada Inc., which subsequently sold its retail brokerage business to Canadian Imperial Bank of Commerce.)
Spiring says Altus adds a solid team with an extensive research background to the Wellington-Altus platform and also provides a Toronto beachhead for that Winnipeg-based firm. Altus also gives Wellington-Altus a presence in Nova Scotia through Altus' Halifax-based branch, bringing the total number of cities in which Wellington-Altus operates to five, including Winnipeg, Saskatoon and Vancouver.
"There has never been a better time to create an independent investment firm. When there is an alternative, there is greater competition, which will lead to the public being served better," says Jelec, CEO and chief financial officer of Altus until the merger with Spiring's new firm, and now a director of Wellington-Altus.
As the new firm builds out, it will aggressively target entrepreneurial advisors looking for change. "We believe successful investment advisors are inherently entrepreneurial," says Hauser. "The pedigree of advisors we are looking for are those that are already at the top of the food chain" who do not "care about preserving the [commission payout] grid at the top."
Jelec notes that all the banks have been "reducing the payout grid remuneration package to advisors annually." This trend, combined with brokerage industry consolidation, has created fertile conditions for Wellington-Altus to attract successful advisors.
Hauser adds that many such advisors have enjoyed the climb to the top, but "the fun factor" involved in building a business is no longer there. These advisors want to be back in the business of providing advice and reconnecting with clients, he says.
That is why many "like-minded" advisors who are confident that they can grow their books are "hitching their wagons to someone successful," says Spiring.
And the big difference in joining Wellington-Altus is that all employees, including back-office and support staff, will have an ownership stake in the firm. "A team that works together, wins together," Spiring says.
Wellington-Altus offers a full suite of products and services to high net-worth individuals, families, business owners and organizations, including: traditional, commission-based brokerage services; integrated financial planning; fee-based advice services; separately managed accounts; unified managed accounts; and privately managed portfolios.
The firm also plans to embrace innovative technologies, including robo-platforms if necessary, to increase efficiency and productivity and provide advisors with more time to deal with clients. "One of the advantages of starting out with a clean slate is that you can implement best-in-class technology as your needs evolve," says Spiring.
The firm has $2.5 billion in assets under administration (AUA). Of these assets, Spiring and Degelman together account for $1 billion, the acquisition of Altus brings in $600 million and the remainder comes from "a handful of NBF advisors who will be joining the firm" with the parent bank's full support, says Spiring.
The partners at Wellington-Altus praise the entrepreneurial nature of NBF, which they view as a partner in the new firm's success. NBF will benefit by providing both back-office services to Wellington-Altus through NBF's National Bank Correspondent Network and subadvisory support through NBF's unified managed account platform.
"NBF is betting on us getting much bigger quickly," says Spiring, who anticipates that Wellington-Altus will grow to having $5 billion in AUA by the end of the year.
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