The founder and chief executive at the Canadian wealth management firm talks about its business model, the lessons to be learned from the US RIA sector, the impact of modern technology, and more.

The development of Canada’s wealth management industry lags that of its southern neighbor by up to 15 years given the traditional dominance of big banks, but Wellington-Altus has plans to change that, and quickly. 

The firm, headquartered in Winnipeg, Manitoba, has its sights set on C$50 billion ($37.50 billion) in assets under administration (AuA) over the medium term. It is structured as a broker/dealer and has more than 830 staff, and more than 100 advisor teams. It is present in offices across Canada.

“The banking system that held a lot of the advisors [in Canada] has atrophied. The advisors and clients are the victims of this. That is a great opportunity for us, and we have no legacy issues on our system,” Wellington-Altus’ founder and CEO, Shaun Hauser, told this publication.

The firm has been busy. In December 2023, it obtained C$40 million in a second-round growth equity investment from Salt Lake City-based The Cynosure Group, a private equity firm. Cynosure previously invested in the firm in 2021. In early January this year, Wellington-Altus appointed Steph Condra as chief experience officer.

Wellington-Altus is privately held, and employee owned – and that’s a big part of its business philosophy, Hauser said. “We want our wealth advisors to be stakeholders with us.”

Hauser thinks his business is more aligned with the US registered investment advisor model. RIAs, with their greater focus on fiduciary responsibility, have gained ground in the past 15 years. In fact, the sector has flourished so much that it is drawing in private equity finance for a series of consolidation moves. (FWR knows that there is still heated debate in the US on what independent advice means and whether legislation is where it needs to be.)

Given such foreign examples in English-speaking nations, Canada can follow suit, and do so quickly by making smart use of technology, Hauser said. “The time is right for us as a business.”

At present, 80 per cent of the Wellington-Altus client base falls into the mass-affluent category, with the balance more on the high net worth side.

“We are comfortable with that [client mix] because it means we’re able to offer a high-quality client experience to a larger market,” Hauser continued. The privately held nature of the firm means it’s not under quarterly reporting pressure, chasing sales targets, or obsessing over net promotor scores. Almost 94 per cent of its revenue is from recurring fees. 

To emphasize that point, Hauser said the firm doesn’t, for example, have a national sales manager. Much of what Wellington-Altus does, in fact, is give clients peace of mind.

Wellington-Altus has created its own “data lake,” harnessing the likes of Amazon Web Services (AWS) and other resources to build a digitally-effective business for advisors, he said. 

Artificial intelligence
The inevitable AI question arises – what does Hauser think of this technology that appears to be a dominant tech talking point, including for financial services such as wealth management?

“As it matures AI will provide teams with speed in getting resolutions and answers [to questions],” he said. AI is akin to where the internet was in the late 1990s. 

“There’s no reason to think that AI would not be on the same path,” Hauser added.