Toronto-based CI Financial Corp. is preparing to jump-start a number of technology projects, including the launch of a robo-advisor, following its recent acquisition of BBS Securities Inc.

"As we look at our business, we clearly understand that technology is an important element of how we take our business forward," says Steve Donald, executive vice president of CI. "And as we look at BBS and the innovative technology that they've been able to put together, we think this [deal] is going to be able to advance a number of our technology initiatives pretty significantly."

The BBS team, composed of 60 people, regard the acquisition positively as an opportunity to expand their Toronto-based technology company, according to Bardya Ziaian, BBS's CEO, president, chairman and chief compliance officer.

"[CI has] much higher expertise than we do in financials, and our tech expertise could complement their growth and help them out," Ziaian says. "So, we just thought this was a perfect situation for both parties."

BBS is a Canadian broker-dealer that provides back-office services through its technology platform to portfolio managers, introducing brokers and institutional investors. For example, BBS offers custodial services to clients that include robo-advisors such as Vancouver-based WealthBar Financial Services Inc.

The deal, announced in September, will see CI acquire BBS and its subsidiaries, Pario Technology Corp. and Virtual Brokers. Pario is the developer and manager of BBS's proprietary technology platform. Virtual Brokers is an online brokerage and BBS's primary brand - a brand that will continue.

The transaction is expected to close in the fourth quarter, subject to regulatory approval. Terms of the deal were not disclosed.

CI anticipates the acquisition to help the firm build out its technology platforms for financial advisors and clients across its various business channels. Notably, the acquisition "accelerates the progress" of Toronto-based Assante Wealth Management (Canada) Ltd.'s plans to launch a robo-advisor. Assante, a retail wealth-management firm, is a wholly owned subsidiary of CI.

"Certainly, all of [BBS's] back-office capabilities, together with what we had previously been building, is going to help us move that initiative forward," says Donald, who also is president of Assante.

CI is working on developing an enhanced digital investment platform that will be available to Assante advisors and their clients. The proposed platform will offer clients access to ETFs as CI makes the platform compatible with products from another of its subsidiaries, Toronto-based First Asset Investment Management Inc., will be included in the offering.


Through the acquisition of BBS, CI is striving to broaden its advice channels to include a self-directed online brokerage, a robo-advice platform (through Assante) and an advisor business. In doing so, CI is following a trend within the investment industry of striving to meet investors' desire to "mix and match" their investment accounts, according to Mike Foy, senior director, wealth-management practice, with J.D. Power & Associates in New York.

According to J.D. Power's 2017 Canadian Self-Directed Investor Satisfaction Study, half of Canadian self-directed investors are likely to have or plan to open a secondary, full-service account within the next 12 months.

"I do think that is the direction that firms are going," Foy says. "That is, being able to offer a range of service models that not only allow [the firms] to target different segments of the investor population, but to provide more options and flexibility to even their existing clients,"

However, bringing various distribution channels under one roof is only the first step. Foy says that clients who open multiple accounts with one provider will expect more from the institution, which will manage those assets together, regardless of which division may hold them. That is a task large corporations in both Canada and the U.S. continue to work toward.

"There hasn't been, historically, a lot of collaborative work around the client experience across different channels," says Foy. "That's a challenge that still exists."


Another offering CI may explore as a result of this acquisition is back-office services. Specifically, CI will be looking to see how it can use BBS's platform to provide back-office services to investment counsellors - an area in which CI sees "a lot of growth potential," Donald says.

Besides building out CI's services, the acquisition also may lead to some technology upgrades for CI's advisor force and its current clientele. For example, the trading, clearing and reporting capabilities of BBS will make advisors' businesses more efficient. As well, the company's technology will help CI to improve its client "onboarding" process.

The acquisition of BBS not only is likely to help to accelerate the rollout of these projects, but will lead to a better platform overall, according to Foy.

More specifically, large companies - such as banks, broker-dealers and asset-management companies such as CI - generally are not as good at developing client-facing technology as smaller, technology-focused companies are.

Says Foy: "[Smaller tech companies'] just are better at creating an intuitive, digital-user experience."

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