CI bulks up financial planning operations

(April 29, 2004) CI Fund Management announced today that it has acquired IQON Financial Management and Synera Financial Services, adding nearly 600 advisors to its already formidable roster. Both firms were owned by Sun Life Financial.

IQON, based in Winnipeg, has 400 advisors across the country with more than $4 billion in assets. Synera, established by Sun Life in 2002 following the acquisition of Clarica, support 170 independent insurance advisors.

“We are pleased to join forces with IQON and Synera, two successful organizations that share our commitment to trusted face-to-face advice and superior service,” said CI president William Holland in a statement.

The cash deal, worth $38.5 million, is scheduled to close in June, pending regulatory approvals.

Holland says the two companies will be a strong complement to Assante and its 1,000 advisors, picked up by CI last year.

“With this transaction, we are building an alliance of three leading financial advisory organizations — Assante, IQON and Synera,” said Assante president Joe Canavan. “We are committed to the independent advisor model and to providing innovative solutions for Canadians seeking financial advice.”

IQON and Synera will continue to operate as independent companies, Canavan pledged. “These are well-run companies with high-calibre advisors and our goal is to preserve and build on their strengths and accomplishments.”

Sun Life says the decision to sell IQON and Synera “reflects the further development and evolution of our distribution strategy.”

When Sun Life purchased rival Clarica in 2002, Sun Life agents were given the choice of joining Sun Life’s “independent career agent” model — under which advisors could sell only Clarica, Sun Life and selected third-party products — or IQON, which has no proprietary products.

“This new arrangement will strengthen service and support to the IQON and Synera advisors while giving them continued access to a broad array of new and existing competitive products,” said Sun Life president Bob Astley.

CI and Sun Life already have a close relationship, with Sun Life owning a 34% stake in the Toronto-based fund firm.

Independent fund industry analyst Dan Hallett says today’s acquisitions were not much of a surprise, considering the association between CI and Sun Life.

“Nor is it a surprise that CI is buying again since I believe [William] Holland indicated that last fall’s acquisitions were fully integrated and he was ready for more,” Hallett added.

Rudy Luukko, investment funds editor at Morningstar Canada, says today’s acquisition indicates that CI is pleased with the way the Assante deal worked out and is looking for more of the same.

“CI gained a home-field advantage in marketing its funds to Assante when it acquired the firm in November, and the two acquisitions announced today represent a significant extension of that strategy.”

Related News Stories

Fundamental questions (an interview with William Holland from the Mid-February 2004 issue of Advisor’s Edge) CI Funds goes on buying spree, takes over Assante & Synergy

Ian Whiting of Ad Astra Financial Planning in Burnaby, B.C., works with IQON. He first heard about the CI deal a few weeks ago and says he has mixed feelings. “Bigger is not always better,” Whiting says. “Assante’s reputation among their advisors is iffy.”

Whiting also has concerns about Assante’s back-office and technology, and worries that IQON may eventually be swallowed up by the larger firm.

On the positive side, he says IQON advisors should have more clout with fund companies, insurance firms and banks to sell their products. “And with a larger asset base, compensation should become more attractive.”

IQON has scheduled a conference call with its advisors on Friday to discuss the CI deal.

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Filed by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com

(04/29/04)

Doug Watt