Retiring Scotiabank CEO strengthened wealth management

This article was originally posted on Canadian Business.

Scotiabank president and CEO Rick Waugh retired last week after 10 years at the helm. He leaves the bank with 90% more staff, 80% more locations and a larger international presence.

The Winnipeg native started his banking career as a teller in his hometown 43 years ago. He spent time in the bank’s U.S., corporate lending, risk management and international divisions.

Read: First day on the job for new Scotiabank CEO

In Waugh’s decades-long tour through Scotiabank, there was one part of the business he skipped over completely—the wealth management division, which oversaw Scotia’s mutual funds and financial advisers. That’s likely because it was so tiny. By the time Waugh became CEO, Scotia had eked out just a 3% share of the wealth-management market in Canada, the smallest of the Big Five banks. It was a problem he vowed to address when he took over.

During the financial crisis the bank suddenly found itself with options to fast-track its plans to grow its wealth management practice. In 2007 Scotia came to the rescue of Canada’s DundeeWealth, which had gotten into trouble when the asset-backed commercial paper market collapsed. Scotia acquired an 18% stake in Canada’s fastest-growing fund company, then swallowed the rest in 2010 for $2.3 billion. In 2008 the bank also bought a 37% interest in CI Funds, though it will be up to new CEO Brian Porter to ultimately decide whether to sell the stake or try to buy the rest. That same year Scotia also bought E*Trade Canada for $444 million.

Read: Name change for DundeeWealth takes effect tomorrow

As a man on the cusp of retirement Waugh gives few hints he plans to kick back and relax. One area of focus will be his family’s foundation, established two years ago, to which he has contributed $21 million.

Meanwhile Waugh is setting up a private investment company with a focus on making direct investments in small and medium-sized companies. “We need more Canadian companies that go public,” he says, noting Canada’s markets have become far too concentrated in resource companies and banks. “We need to regeneralize.”

Which is sort of funny, Waugh admits. While he spent his entire career telling others to diversify their investments as a way to minimize risk, he kept most of his portfolio in Scotiabank shares. Taking his bank bonuses in Scotia equity, rather than cash, he’s built up a sizable personal stake in the company worth $34.5 million in shares and deferred share units, plus options worth another estimated $48 million. That will change as he diversifies for the next chapter in his life. It’s the prudent thing to do.

Read the full article here.

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