IA Financial buys HollisWealth

IA Financial Group has reached a deal to purchase HollisWealth from Scotiabank, making it one of the largest non-bank wealth management advisory firms in Canada with $75 billion in AUA.

Insurer IA Financial and the Bank of Nova Scotia announced the deal on Monday, merging the fourth-largest independent advisor network in Canada with Industrial Alliance.

HollisWealth has $34 billion in AUA, 800 licensed advisors, 400,000 active client accounts and over 300 locations in Canada, the companies said. The firm was part of Scotiabank’s acquisition of DundeeWealth in 2011, as well as Dynamic Funds, though Dynamic will remain part of Scotiabank.

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The transaction is subject to regulatory approvals and is expected to close in calendar Q3 2017.

Consolidation in the wealth management sector has picked up as firms grapple with headwinds from technology and client-friendly regulatory changes. Increasingly, advisory firms are competing for high net worth clients. North American player Raymond James acquired 3Macs in May, absorbing an independent dealer and growing its AUA to $33 billion*. In January, Dundee Goodman advisors were acquired by Echelon.

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Yvon Charest, chief executive of IA, said in a statement Hollis will “give us a truly national network and additional scale, which will create new growth opportunities and allow for continued investment and innovation in client solutions.”

The company said expanding its wealth management platform and capabilities has been a strategic priority, having made 25 acquisitions in wealth management since 2000.

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James O’Sullivan, Scotiabank’s group head of Canadian banking, said Industrial Alliance would be “a great fit for our HollisWealth advisor model” and that the bank will maintain a relationship with IA as HollisWealth remains a distribution partner for Dynamic Funds.

IA is financing the deal with cash on hand and an issuance of shares underwritten by TD Securities. The transaction price, which was not disclosed, will vary depending on the level of AUA at closing as well as “adjustments and other transaction costs,” a release said.

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*An earlier version of this story incorrectly stated 3Mac’s AUA.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.