The entrepreneurial spirit is alive and well in the independent brokerage world with the newest entrant about to embark on a growth strategy that will be partially achieved by trying to recruit disaffected brokers from bank-owned dealers.
“We are putting the band together,” said Winnipeg’s Charlie Spiring, the founder and chairman of Wellington-Altus Private Wealth Inc. “We got restless and decided to go and build another independent firm.”
In 2011, 18 years after creating Wellington West Financial, Spiring sold it to National Bank Financial for more than $330 million. Earlier this year, Spiring left the bank to set up his own operation. With the bank’s blessing, he then hired two former Wellington West employees and senior producers, Saskatoon-based Todd Degelman and Vancouver-based Frank Mauro.
“I have a lot left in the tank and there are a lot of unhappy investment advisers looking for the culture and home that we created last time,” said Spiring, who is required to stoop when he goes through most doorways. “But now that I am older, I want to ensure that we do things a little quicker and be a little more successful. And besides I am a terrible golfer.”
Toronto-based Altus Securities Inc. recently joined the mix. Adding Altus, which a few years back acquired an operation in Halifax, is another example of how business is done.
Spiring and Altus co-founder Paul Jelec (his partners are Ben Kizemchuk, Elaine Knotek-Holmes and Gregg Blaha), were former staffers at Midland Doherty, a firm that merged with Walwyn Inc. and was ultimately acquired by Merrill Lynch in 1999 for $1.3 billion.
Jelec argues that bank-owned dealers sow the seeds of discontent with their advisers on a regular basis, through reductions in payouts, by pushing the sale of bank-created products and through a culling of the smaller producers. He said the time is right to “build a new, competitive independent Canadian investment firm. There is room to challenge the banks.”
But it will be a challenge, he notes, since banks hold more than 80 per cent of the market. “Without proper competition, the Canadian investing public doesn’t have the options that it should,” he said.
The new independent isn’t starting with a just piece of paper and some ideas: It has five offices, is home to about 50 employees and its brokers oversee the management of $2.5 billion of client assets. “Last time it took us nine years to reach that level,” said Spiring. The company has received commitments from brokers, expected to join in the summer, with $1.5 billion under management.
The brokers that are being acquired will vend in their business and receive stock the new entity. That model has been adopted by a number of firms, most notably Richardson GMP, which has about $30 billion under management.
“It will be along those lines but the big difference is that we are highly profitable,” said Spiring. While expansion across the country will be determined by brokers who decide to accept the message and join, he said, priority will be in the greater area of Vancouver and Toronto.