Industrial Alliance buys FundTrade

By Steven Lamb | June 27, 2006 | Last updated on June 27, 2006
2 min read

In a move aimed at bolstering its presence in English Canada, Quebec-based Industrial Alliance Insurance and Financial Services has struck a deal to purchase FundTrade Financial, an independent mutual fund dealer based in Oakville, Ontario. The transaction faces regulatory approval.

“With the acquisition of FundTrade, we immediately broaden and strengthen our distribution platform and become a pre-eminent force in the independent advisor channel catering to the industry’s top financial advisors and their clients,” said Industrial Alliance executive vice-president, Normand Pépin, in a press release.

Financial terms were not released, but IA said FundTrade will be amalgamated into FundEX Investments, in which Industrial Alliance holds a 91.75% stake. The combined operations will service more than 450 representatives with about $9 billion in assets.

“This transaction will bring increased scale, scope and stability to both mutual fund broker-dealer operations, while yielding significant synergies,” Pépin said. “We intend to make FundEX/FundTrade the new standard in back-office and compliance services and are committed to helping independent financial advisors to prosper.”

FundTrade currently administers more than $3.5 billion in assets on behalf of over 45,000 investors.

“The combination of FundEX and FundTrade creates a formidable organization that will be poised to deliver significant benefits to the industry’s best financial advisors and their clients,” said Michael Greer, president of FundEX.

“FundEX and FundTrade are similar both from the standpoint of fee structure and type and quality of advisor,” says Dan Hallet, president of Hallett and Associates. “It’s a good fit and it makes sense because you need scale on the distribution side and this is a significant acquisition to that end.”

In the fall of 2005, Industrial Alliance made a bid for fund manufacturer, Clarington Funds, which was put into play by CI. The ensuing bidding war ended December 12 when CI formally withdrew its bid, and IA closed its purchase offer January 10, 2006.

Since then, Clarington has been rebranded as “IA Clarington” and severed ties with Seamark, one of its external managers, as part of the integration into the IA corporate structure.

As at March 31, 2006, Industrial Alliance was managing about $6.0 billion in mutual fund assets through its Industrial Alliance Fund Management Inc. and Clarington Corporation subsidiaries.

The company also administers an additional $1.5 billion in securities through its Industrial Alliance Securities division and $11.1 billion in mutual funds through its Investia and FundEX subsidiaries. The company also has segregated fund assets of about $8.0 billion.

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Steven Lamb