Cartier advisors express relief in wake of Dundee deal

(November 13, 2003) Advisors with Cartier Partners Financial Group are taking a cautiously optimistic approach following news the financial planning firm is being taken over by Dundee Wealth Management. There’s a palpable sense of relief that the long-awaited deal is finally done and Cartier reps seem pleased with Dundee’s shared focus on the independent advisor model.

The “for sale” sign went up at Cartier Partners in May when the firm’s majority investor, Quebec’s Caisse, pulled out. It took nearly six months to negotiate a deal, with Dundee emerging as the winning bidder on Tuesday, in a cash and stock takeover valued at $123 million.

“I am relieved that the announcement has been made as it has been a point of distraction and uncertainty to many reps,” says Murray Morton, a Cartier advisor based in Toronto. “Dundee and Dynamic are large and recognized names in the industry which appear to share similar values with Cartier regarding independent financial advisors.”

Another Cartier rep, who asked to remain anonymous, says he’s happy the company’s 3,500 advisors finally have an answer to the question they’ve been asking for the past six months. But he’s keeping his options open. “I’m sitting tight for the time being to see what my office does, but I also have an exit strategy ready to go at a moment’s notice if things don’t turn out the way I like,” he says.

Mary Thorpe, with Cartier in Burlington, Ontario, says she believes the deal will be positive. “I have confidence that the executives of Cartier believe Dundee is the right partner to ensure a commitment to advisors’ independence.”

“I think the deal is a good one,” says Lance Howard, a Cartier rep based in London, Ontario. “Dundee supports the independent advisor channel. Their model is similar to Cartier and [Dundee Wealth president] Ned Goodman is a shrewd businessman.”

Cartier president Dan Richards hosted a conference call yesterday for about 200 of the firm’s top advisors and branch managers.

Richards says he also got the impression that advisors are relieved the period of uncertainty has come to an end. And he says the mood of advisors participating in the call was generally positive. “People are pleased that in Dundee, we’ve got [a company] that shares some of the core aspects of the Cartier philosophy, which is focused on advisor independence.”

The most contentious issue appears to be the disappearance of the Cartier brand name, Richards says. “While there will be some short-term pain anytime there’s a change of name, ultimately being part of a bigger entity that’s a recognized brand is going to be to advisors’ advantage.”

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There’s also concern about the future of Cartier’s smaller producers. Although Dundee has said it has no immediate plans to make changes at Cartier, there’s little doubt that some advisors will have to raise their asset level to remain competitive.

“So if your business is primarily a money business, if there’s not a big insurance component, you’re going to have to have a minimum base of $10 million in assets and down the road, maybe $20 million,” Richards says.

“After a given period of time, if people aren’t able to get their asset level up, they need to think about whether they’ve got the scale to be competitive and whether they would be better off as part of another advisor practice,” Richards adds.

Another Cartier advisor who asked not to be identified believes Dundee will make life uncomfortable for Cartier reps who aren’t high producers, noting that Dundee advisors have average books of around $20 million.

However, independent fund-industry analyst Dan Hallett thinks Dundee will do what they can to help the smaller Cartier producers grow their business. But if those efforts are unsuccessful, “they may simply invite them to leave.”

“Even small dealers have done this so I can’t imagine that Dundee would be tolerant of unprofitable producers after reasonable efforts to help them,” says Hallett.

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Filed by Doug Watt, Advisor.ca, dwatt@advisor.ca

(11/13/03)

Doug Watt