Winnipeg-based Great-West Lifeco Inc. (GWL) has entered into an agreement to acquire Kitchener, Ont.-based Financial Horizons Group, one of Canada's largest managing general agencies (MGAs), the companies announced on Friday.

The deal adds a large, independent distribution channel, which includes 6,660 advisors across the country, to GWL's already diverse distribution activities.

"As part of our Canada transformation, we are committed to investing in new capabilities for our business," says Stefan Kristjanson, GWL's president and chief operating officer, Canada, in a statement. "This strategic acquisition gives our organization a strong presence in the growing, independent MGA sector of the Canadian market."

Financial Horizons, founded in 1990 by John Hamilton, president and CEO, operates 30 offices nationwide. Hamilton will continue to lead the business in his current capacity and the existing management team will remain in place, the companies said. The MGA will also maintain an independent board of directors without any representation from GWL.

"Financial Horizons will remain independent as a true MGA. There is no move or intention to merge any of the companies," said Hamilton during a conference call.

The product selection available to Financial Horizons advisors will remain the same, Hamilton noted. Advisors will not have access to GWL products and there will be no change to Financial Horizons' current relationship with GWL's sister firm, Toronto-based Canada Life Assurance Co.

"We will also not get preferential treatment from Canada Life any more than we do today, which we don't, and we will not give them any preference," Hamilton said.

The one area in which Financial Horizons and GWL will combine resources is compliance. Said Hamilton: "The only thing we will share will be compliance, and that's a good thing."

Indeed, one of the reasons GWL was considered a great fit for Financial Horizons is because GWL understands the regulatory changes happening in the industry, Hamilton said. The details as to how exactly the firms will share their compliance resources have not been finalized. 

San Francisco-based private equity firm Genstar Capital has been the majority owner of Financial Horizons for the past six years. Genstar owns 72% of the firm and Hamilton is the company's second largest shareholder.

GWL plans to continue to support Financial Horizons' aggressive consolidation strategy, which has resulted in the acquisition of 30 MGAs over the past six years, Kristjanson says.

The acquisition is subject to regulatory approval and customary closing conditions, and is expected to be completed on June 30.

GWL said the transaction is expected to be earnings accretive; however, it's not expected to be material to overall Canadian earnings.

The announcement follows a string of recent changes at GWL, including the launch of the Advisory Network, its newly established individual distribution organization. In addition, the company revealed last week that it would eliminate two key distribution channels — its Gold Key network of advisors and the Wealth and Estate Planning Group at Freedom 55 Financial — and launch a new "prestigious" distribution network called Wealth and Insurance Solutions Enterprise.

Read: GWL makes big changes to advisor distribution network

With files from Fiona Collie

Photo copyright: ltphoto/123RF