Yet another firm has entered the wealth management space, but it’s not going after rich clients. Instead, its financial advisors have no account minimums.
Co-operators has rebranded to emphasize its new “holistic financial services and advice” offerings for “everyday Canadians” — through a mutual fund division launched over the past year — in addition to its traditional life, home and auto insurance products.
“We’ve got strength in protection and risk management, and a number of capabilities in the wealth space,” said Emmie Fukuchi, executive vice-president and chief digital and marketing officer with Guelph-based Co-operators Group Ltd. “We’ve really been building that capability, and the rebrand is about bringing all that to life.”
In January 2020, Co-operators Financial Investment Services Inc. (CFIS) registered with the Mutual Fund Dealers Association of Canada. Several of the broader co-operative’s life- and property and casualty-licensed agents then registered as mutual fund advisors, and CFIS’s mutual fund distribution services soft-launched in July 2020.
Today, the firm has about 600 mutual fund advisors across Canada, including a corporate team of five advisors that serves clients virtually. (In total, the firm has 2,500 licensed insurance representatives.) CFIS has hit about $100 million in sales and $300 million in assets under administration.
“The wealth management space is a crowded space, but we see the vast majority of players focusing in on the affluent or mass-affluent space. Based on the client mix we have here, we’re more focused on the everyday Canadian, and this is where we see a gap in the market,” Fukuchi said. “Because of our co-operative roots, we really exist to serve unmet needs.”
Kevin Daniel, executive vice-president and chief client officer with Co-operators Group Ltd., said that unlike banks, CFIS offers no proprietary products, though the firm could introduce them in the future.
Instead, CFIS’s product shelf has funds from AGF Management, CI Financial, Dynamic Funds, Fidelity Investments, Franklin Templeton, Invesco, Mackenzie Investments and NEI Investments, which is part of Aviso Wealth. (Through a subsidiary, Co-operators Group Ltd. owns 73% of CUMIS Group Ltd., which has an interest in Aviso Wealth. Prior to launching CFIS, the co-operative had about 60 mutual fund advisors registered under Aviso Wealth.)
Most CFIS advisors are paid by commission — 65 to 70 basis points — while the virtual advisor team is paid by salary. Daniel said the firm operates without account minimums (aside from the small minimums required to invest in certain mutual funds) because many advisors are simply extending their existing relationships: all CFIS advisors are life- and property-licensed.
“It takes time to build up an asset base within an advisor office to be economical, but it’s an investment in discussions with clients, and there are revenue sources from their home insurance, auto insurance [and] life insurance,” Daniel said.
Daniel said the firm is “always looking for advisors who have the skills we need,” but didn’t share any recruitment or asset goals. He said his pitch to advisors includes Co-operators’ community-oriented values and the firm’s desire to help clients regardless of their assets.
Co-operators was founded in 1945 and manages more than $60 billion in assets through its insurance, asset management and investment divisions.