Independent wealth advisory Wellington-Altus is buying TriVest Wealth Counsel Ltd., a Calgary-based investment management firm, with plans to establish a beachhead for consolidation of the market segment in which it operates.
Winnipeg-based Wellington-Altus, which has $8.5 billion in assets under administration, has already established itself as a consolidator in a larger segment of the wealth management market overseen by the Investment Industry Regulatory Organization of Canada. This has included picking up teams and their books of business from some of the country’s largest banks. The smaller segment TriVest belongs to — investment counsel portfolio managers, or ICPMs — are provincially regulated by securities commissions.
Investment counsellor and portfolio managers with firms such as TriVest are also typically the business owners, and they have a fiduciary duty to clients.
“The needs of both of the types of advisor are starting to become the same,” said Shaun Hauser, president of Wellington-Altus.
Both need support services as they face growing demands to be transparent and offer more financial planning and wealth management, he said.
“We can offer a repository of services that both sides … can plug into and deliver clients the same needed wealth advice,” Hauser said. “That’s where we see it going.”
Martin Pelletier, TriVest’s co-founder, will become managing director of the new business line, Wellington-Altus Private Counsel, when the deal closes.
He said his sector is facing pressures including more costly and time-consuming regulation. At the same time, the explosive growth of low-cost ETFs is creating demand to expand far beyond stock picking and into in-depth financial counselling.
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The problem for many independent investment counsellors and portfolio managers is that the time spent on back-office demands “leaves little time available to undertake the introduction of such additional services,” Pelletier said.
He and his partner have been looking to team up with another organization because of those pressures, he said. Among the appealing things about the Wellington-Altus arrangement, he said, is that the model will allow any investment counsel portfolio managers who come on board to continue to own their “practice,” while accessing additional resources to handle back office and support services.
Pelletier, who also writes a regular column for the Financial Post, said he sees parallels to the model in the United States, where the registered investment adviser (RIA) segment has been undergoing significant growth, driven in part by mergers among largely self-employed wealth managers. While that market is much larger, he said Wellington-Altus has established a “first-mover advantage” on potential consolidation of independent investment counsel portfolio managers in Canada.
Founded in 2017, Wellington-Altus has not shied away from poaching from big, established players on Canada’s financial services landscape. Last month, the firm extended its consolidation run by picking up Cresco Wealth Management, a 16-member team with $800 million in assets under management that had been part of Scotia Wealth Management in Calgary. And in September, Wellington-Altus hired Rob Djurfeldt, former head of ScotiaMcLeod, as executive vice-president and senior investment adviser.