The firm’s recruitment drive has boosted average revenue per new advisor by 43 per cent year-to-date through July from the comparable year-earlier period, the report said.
Royal Bank of Canada's US wealth management unit has been attracting teams managing larger amounts of assets from bigger rivals, boosting revenues, according to Reuters.
In August, the US unit of the Canadian bank hired a team of four advisors from Morgan Stanley who managed $675 million in client assets, building on additions from other competitors including AllianceBernstein, Wells Fargo, Bank of America's Merrill Lynch and UBS, the report said.
When asked about the matter by this news service, Royal Bank of Canada did not add further details.
The firm’s recruitment drive has boosted average revenue per new advisor by 43 per cent year-to-date through July from the comparable year-earlier period, the newswire said, citing the firm's internal figures.
“The US is a great opportunity for the enterprise, given it is 10 to 11 times bigger than the Canadian market," Michael Armstrong, the chief executive of RBC's US wealth management unit, was quoted by the news agency as saying in an interview. "The key premise behind recruiting for us is that it's really important that we try to reach scale in our business.”
The report noted how RBC has expanded into US wealth management since its acquisition of Minneapolis-based brokerage and investment bank Dain Rauscher Wessels almost 20 years ago. In 2015, RBC bought California-based City National, a step that brought it a large slice of the Hollywood and entertainment industry wealth population.
(Editor's note: It is interesting to know how far such revenue increases, aka production, are sustainable if a firm such as RBC is recruiting from rivals in this way. One assumes perhaps naively that firms losing teams might react by improving their own remuneration packages or work to stem the outflow in other ways. Also, this sheds light on to what extent growth in wealth management is a sort of Darwinian fight for resources and a more benign "positive-sum" narrative. Stock markets recovered a lot of ground from March - although had fallen heavily today. The next few months, with the uncertainties around the November elections, the impact of potential policy changes, and the usual squalls of October, could make for a bumpy ride in the final quarter of 2020.)