Desjardins didn’t like how three of its Ontario branches were doing, so it sold them.
“We’ve been trying to grow those branches over the years,” says Luc Papineau, vice president and general manager of Desjardins Securities, “and we feel that a partnership with a firm like 3Macs will be much better than trying to grow them alone.”
Neither firm would disclose the AUMs of the affected branches or how many clients they serve.
But they’re “very productive offices” and 3Macs is excited to take them on, says Randy Ambrosie, 3Macs CEO.
The branches, which will operate under the 3Macs name, are in downtown Toronto, North York and Peterborough. Desjardins will keep its only other Ontario office, in Sudbury.
The change from Desjardins to 3Macs will happen at the end of August, says Ambrosie.
The Desjardins branches’ staff and clients are included in the sale, and Ambrosie says the firm isn’t planning layoffs. Eventually, experienced 3Macs advisors will join the new offices, and Desjardins staff will migrate to other 3Macs branches, he adds.
With the purchase of State Farm insurance, Desjardins has been expanding outside of Quebec, notes Papineau.
“One thing that was stagnant was the full-service brokerage side,” he says. “We’ve tried different strategies in the past which were not as successful as we would have hoped. Creating the partnership with 3Macs [is] the right way to grow the business.”
Desjardins is entitled to a minority stake in 3Macs as part of the deal. Both sides say it won’t affect the 166-year-old company’s independence.
“The control is still in the hands of the advisors and employees of 3Macs, but for us it’s an opportunity to share in 3Macs’ growth,” says Papineau.
The deal’s structure and price are not being publicly released, but Ambrosie adds, “It allows us to preserve our independence.”
While the Desjardins name will no longer be on the branches’ front doors, the firm will provide capital market access through its bond inventory and new stock issues, which Ambrosie calls “a great improvement.”
Desjardins Securities expects to supply 3Macs with more products and services down the line, he and Papineau add.
Desjardins Securities has more than $30 billion in assets under management and 250 financial advisors. 3Macs has offices in five Canadian cities, including Toronto and Montreal, and prior to the deal it had about 70 advisors and portfolio managers. The Canadian financial industry manages more than $1 trillion.