Canaccord Genuity’s Canadian wealth management business reported net income of $3.2 million in a record quarter for the segment as it reduced its advisors by six advisory teams.
In Canada, Canaccord had 135 advisory teams at the end of the quarter ended June 30, down six teams from March 31, the company said, as it continues an advisor recruitment strategy to grow AUM. The company says an advisory team represents one or more advisors.
“Some of it was market,” chief executive Dan Daviau said on a conference call with analysts on Thursday, in response to a question about the downsizing of teams. “It was never our intention to materially increase the number of advisors. It was our intention to materially increase our assets under administration. So, some of that activity, you’ll note, is making room for the bigger books of business and some of the other important partners that we’re trying to attract.”
Daviau said the company has “reasonably good visibility” in its advisor recruitment. “We think we have pretty good visibility in our ability to attract more teams. It’s a long sales cycle,” Daviau said. “The pipeline seems reasonably robust, as we speak today.”
Read: Canaccord recruiting more than 9 advisory teams, $2.5B in AUA
Discretionary assets under management for the Canadian business rose 108.8% from the same period a year earlier.
Canaccord’s North American wealth management segment, which operates in Canada, generated $36.9 million in revenue and net income before taxes of $3.2 million in the quarter. Assets under administration in Canada were $12.7 billion as of June 30, falling 4.3% from $13.2 billion at the end of the previous quarter and up 29.1% from $9.8 billion from a year earlier.
Daviau said the Canadian wealth segment improved profitability “driven primarily by our efforts over the last year to increase the scale in this business.” He added: “This was a record quarter for the business since 2011.”
The Vancouver-based investment banking and financial services firm has wealth management offices in Canada, Australia, the U.K., Guernsey, Jersey and the Isle of Man.
In July, Canaccord announced that its U.K. and Europe wealth management unit was acquiring Hargreave Hale Limited, an independent U.K.-based investment and wealth management group, for $88.1 million. Daviau said Canaccord will be positioned as one of the top 10 wealth management firms in the U.K. by assets.
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Canaccord says average Canadian advisor team book nearly $100M