National Bank Financial will soon allow advisors to give related clients single-family pricing, regardless of where each household member lives.
The bank is rolling out a new fee-based platform called My Wealth, which consolidates the platforms of National Bank, Wellington West and HSBC’s Canadian retail brokerage unit, says Jonathan Durocher, NBF’s vice-president for support and client offering. National Bank acquired Wellington West in July 2011 and HSBC’s Canadian retail brokerage account in January 2012.
“One of the big features is [advisors] will be able to add kids and parents of their clients into global family pricing,” Durocher tells Advisor.ca.
He adds National Bank is still implementing My Wealth, and expects it to go live this summer. The new platform will also have a lower minimum threshold for both discretionary and non-discretionary fee-based accounts.
Durocher declined to provide numbers, but said the firm is lowering thresholds to give client’s children better access to fee-based accounts, and particularly to discretionary programs typically reserved for wealthy clients.
Householding accounts based on family relationship, instead of address, isn’t new. Firms such as Raymond James Ltd. and Richardson GMP already allow it. A Raymond James broker says his firm allows advisors to include non-relatives like business partners in the same household account.
NBF may be later to the game, but advisors we spoke to welcome the new policy.
“We want our clients’ children because when the parents pass away and they inherit their parents’ money, you’ll lose the assets if you are not the children’s broker,” says an NBF adviser who declined to be named.
The consolidation of the fee-based platforms will also allow all advisors to access features unique to each platform.
Wellington West, for instance, has a program called Portage, a fee-based brokerage account that doesn’t cap trades executed under the account.
“We have the luxury to take all the best ideas of all the platforms we had before,” says Durocher. “Some of the features of the Portage program found their way into the My Wealth program.”
As of second quarter of 2014, the bank’s wealth management business recorded $332 million in revenues. Of that, $160 million or 50% was from fee-based accounts, says National Bank’s latest financial statements. Average assets at the wealth unit stood at $10.5 billion, up 16% from $9 billion in the same quarter last year.
Profits at National Bank’s wealth unit stood at $77 million during Q2 2014, up 40% from $55 million in the same quarter last year. That’s still relatively small compared to the banking segment’s $162 million net income, and the financial markets’ $128 million.
However, the wealth unit’s 40% profit growth trumped the 6% profit growth from banking and 9% loss in the financial markets segment on a year-over-year basis, according to bank’s latest quarterly result. The unit also posted the highest revenue growth of the three business segments during Q2 2014.