Strategy

Canadian Wealth Management Biz Saw Flurry Of Activity In 2010

Wendy Connett, Editor, New York, 23 December 2010

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The wealth management industry in Canada saw a flurry of activity in 2010 from domestic and overseas players looking to grab a bigger piece of the high net worth pie.

The wealth management industry in Canada saw a flurry of activity in 2010 from domestic and overseas players looking to grab a bigger piece of the high net worth pie.

The wealth management arms of Canadian banks sought growth by launching and expanding divisions as well as through acquisitions. Big US players also bolstered their presence in Canada or made plans to do so. 

UHNW Market

Two Canadian banks reached for the higher end of the market.

BMO Harris Private Banking established a private wealth group to target families with at least C$10 million in investable assets or C$25 million in net worth.

In October Scotiabank entered into an agreement to acquire The WaterStreet Group, a multi family office advisory firm. The acquisition marked the bank’s entry into the ultra high net worth arena.

Expansion

Toronto-based Scotiabank carved out a Global Wealth Management division. GWM created a fourth division at the bank. Scotiabank, Canada’s third largest bank, followed in the footsteps of Royal Bank of Canada, which carved out a separate wealth management division a few years ago.

In September RBC Wealth Management appointed a new deputy chairman of its international ultra high net worth unit as part of a new restructuring strategy which will include adding a fourth operational region - emerging markets.

Acquisitions

Earlier this week RBC completed its purchase of BlueBay Asset Management, the UK-listed specialist investment house, in a deal worth £963 million (around $1.5 billion), adding around $40 billion assets to the Canadian firm and around 200 staff.

In November Scotiabank agreed to make an offer for all of the common shares of DundeeWealth (82 per cent) that is doesn’t already own of the investment manager in a C$2.3 billion deal.

Canada’s Private Wealth 1859 acquired the private wealth management customer service division of Montrusco Bolton Investments. The wealth manager was launched as a subsidiary of National Bank Financial Group last year to target high net worth investors.

Overseas Players

UBS Wealth Management Canada’s chief, Grant Rasmussen, said in August that the bank plans to make an acquisition and double its advisor headcount in order to capture a larger slice of the high net worth pie. Acquisition targets are firms with at least C$1 billion ($959 million) in assets.

BNY Mellon, meanwhile, made its first ever wealth management acquisition in Canada with the purchase of Toronto-based I3 Advisors.

 “Canada’s high net-worth market represents a very attractive opportunity for BNY Mellon as we accelerate our global expansion and seize new opportunities in dynamic markets,” Larry Hughes, chief executive of BNY Mellon Wealth Management, said in July when the acquisition was announced.

Citi Private Bank plans to expand its Canadian footprint by opening an office in Calgary in 2011 to further tap entrepreneurial wealth there.

Domestic Players Grow Globally

Global expansion through acquisitions was also a priority for some of Canada’s wealth management firms.

Bank of Montreal set its sights on China and is eyeing acquisitions of wealth management firms there. It also opened an incorporated China-based subsidiary, Bank of Montreal (China) in October.

Parent BMO Financial Group, meanwhile, expanded in the US with its acquisition of Marshall & Ilsley, which it announced this week. The deal, which includes M&I’s wealth management business, is expected to close in July.

As part of plans to boost its Asian strategy, Royal Bank of Canada closed its acquisition of the wealth management unit of Fortis Wealth Management Hong Kong in November. The deal brings 50 client-facing professionals to the Canadian business.

In Latin America Scotiabank agreed to acquire Nuevo Banco Comercial Uruguay's fourth-largest private bank in terms of loans and deposits as well as Pronto!, the country's third-largest consumer finance company. The acquisition is its entry into Uruguay and marks an expansion in Latin America.

Scotiabank also strengthened its offshore wealth management business by acquiring BNP Paribas’ wealth management businesses in Panama and the Cayman Islands.

 

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