13,500 clients affected by RGMP-Dundee deal

By Melissa Shin | January 14, 2014 | Last updated on November 8, 2023
3 min read

For 60 advisors, it’s happening again.

They’re moving, thanks to Richardson GMP’s decision to shed lower-asset advisors it acquired from Macquarie last year.

Read: 60 RGMP advisors move to Dundee Goodman Private Wealth

One industry observer notes this is “an industry precedent akin to a sports team putting underperforming players on the waivers.”

Richardson GMP president and CEO Andrew Marsh says the primary reason for selling these advisors to Dundee Goodman Private Wealth was book size. “We’ve always shot for an average business size of $100 million or more,” he tells Advisor.ca. “This group represents people who didn’t fit that criteria.” Their books run the gamut from transactional to managed accounts.

“It’s not a comment on the quality of their businesses or the quality of them as professionals, it’s a comment more on the financial structure of the business model,” he adds. “They’re great people.”

And there were strategic reasons. “Victoria wasn’t a market we were in,” Marsh says, “and it made sense given Dundee’s interest in expanding across the country…while also using our same financial criteria.”

John Cucchiella, senior VP and head of retail at Dundee Goodman, says his firm will gain about 30,000 accounts and 13,500 clients. Since $2 billion in assets are moving, that means each account is worth an average of $67,000, and each of the 60 advisors brings an average $34 million in assets.

Read: Advisors prefer independent firms: survey

For some of those 60, this may be the third time the name on their door changes in a few years. Some RGMP advisors moved to Macquarie during its 2012-2013 hiring spree, and then got bought back in September 2013. Now, they’re going to Dundee. And it hasn’t been too many years since firms acquired by Macquarie took the Blackmont name off the door.

To help smooth the transition, “we have some indication from IIROC that we’re going to get a bulk transfer for all these [clients] so we don’t have to re-paper everything,” says Cucchiella. “That’s going to ease a lot of the concerns advisors have.” Dundee will also provide introduction letter templates for advisors.

Cucchiella recognizes clients may be frustrated. “Clients are going to feel this. They’re going to raise questions to advisors; ‘Again?'” But he points out, “Clients are doing business with their advisors, and if we provide them the tools, they’re the best people to manage that relationship through.”

Marsh agrees. “Loyalty to the advisor is something that’s been proven as these advisors have switched firms over the years.”

Read: How to tell clients you switched firms

Robert Sellars, executive VP, CFO and COO at Dundee Goodman Private Wealth, says, “You may end up keeping 80% to 90% of the assets on a good acquisition. There may be some slippage, but that’s par for the course.”

Sellars adds he’s learned lessons from past acquisitions, and “we’ll be constantly with advisors during and post transition to bring them into the Dundee fold.” Dundee will also be reviewing the compensation structure for the new advisors, but “out of the gate, we’re not making any changes,” he says. “And when we did our due diligence, [we found] their comp is not that dissimilar from what we have at Dundee. So I don’t think there will be significant changes.”

The transaction closes in 60 days, and during that time, RGMP will continue to support those 60 advisors, including keeping their names on the website. Marsh says RGMP approached Dundee Goodman for the sale.

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Melissa Shin

Melissa is the editorial director of Advisor.ca and leads Newcom Media Inc.’s group of financial publications. She has been with the team since 2011 and been recognized by PMAC and CFA Society Toronto for her reporting. Reach her at mshin@newcom.ca. You may also call or text 416-847-8038 to provide a confidential tip.