IA Financial Group aiming for dual-registered “one wealth” strategy

Quebec City–based iA Financial Group’s wealth management division, now led by Stephan Bourbonnais, isn’t wasting time in adapting to the new regulatory regime. 

Bourbonnais was named executive vice-president, wealth management, in late January — overseeing iA Clarington Investments, Investia Financial Services, iA Capital Markets and iA Private Wealth — and he said the company has already applied for its dual registration status under the New Self-Regulatory Organization of Canada (the New SRO).

The New SRO published a questionnaire in December that offered instructions for firms seeking to conduct business as a single legal entity under its watch. Applications from existing members could be submitted starting Jan. 1, the same day as the organization was officially established, and the New SRO said in an emailed statement that there has been “strong interest” from member firms.

“Several have expressed interest in applying and are at various stages in the process,” the statement said. With some firms having “internal planning and preparation to complete” before applying, the New SRO said it expects applications will be submitted steadily “over the next couple years.”

While iA Financial’s request is being approved, the wealth firm is working on a “one wealth, four-door” strategy that will give advisors and clients more flexibility. The company wants to be “a first mover” in reflecting the new environment and serving advisors, Bourbonnais said.

“For me, [the idea is] to bring [iA Financial’s] four wealth businesses together,” he explained, noting that he’s otherwise largely continuing the mandate of predecessor Sean O’Brien, who broadly aimed to bring talent into each division. (Bourbonnais will remain as CEO of iA Private Wealth for “at least a year” and for continuity, he said, with the search for that division’s president underway.)

“The timing and opportunity [with this appointment] is related a lot to the New SRO,” Bourbonnais said. “We’ve got size and scale, and that’s what we want to promote,” alongside clear branding and operational efficiency.

Louis H. DeConinck, president with Investia, agreed that it’s time to stop looking at iA Financial as multiple different businesses with separate assets. He referred to the company as “a powerhouse” that’s designed for independent advisors. “This is 150% good news,” he said. “We’re positioning ourselves well for future growth.”

The company confirmed in an email that iA Private Wealth has $47 billion in assets under administration while Investia has $56 billion, for a combined $103 billion, as of Jan. 31. Including its dealers, iA Financial Group has assets under management and administration of $196.2 billion.

For now, iA Private Wealth and Investia Financial advisors will remain under separate banners, but the company is actively speaking with them about where leadership would like to take the organization.

“It’s the how that’s yet to be determined; we need to work with the regulators on this,” Bourbonnais said.

The end goal, Bourbonnais explained, is “to make sure [through harmonization] that advisors joining us and clients joining us are able to graduate from one [division] to another seamlessly” through a smooth transition process, as well as when their advice needs, expectations and portfolio needs shift.

At the same time as respecting the business models of the firm’s “entrepreneurial advisors,” he wants to streamline aspects like some of the basic technology tools that advisors use, resulting in greater clarity around iA Financial’s wealth offering.

An ongoing item that will help is the “significant digital transformation project” underway, taking into account all divisions. “[It’s a space] where we need to lead more than ever,” to meet people’s advice needs, Bourbonnais said.

That digital plan, which Bourbonnais will continue to oversee as he remains the CEO of iA Private Wealth, supports the hybrid advisor with a “plug and play” ecosystem that’s being developed. It will allow advisors ample choice when it comes to business and planning tools, and there will be advanced predictive analytics and a platform for advisors with customizable business filters called AX360.

The company also is focused on growing its Canadian-based registered investment advisor for cross-border clients, iA Private Wealth (USA) Inc., and is exploring unified managed account (UMA) and investment counsel portfolio manager (ICPM) capabilities.

This dual-registration development is the latest of several shifts to occur since iA Financial bought HollisWealth from Bank of Nova Scotia in 2017. The company launched its iA Private Wealth brand in January 2021, unifying iA Securities and HollisWealth, leaving the mutual fund arms as separate. Shortly after, FundEX Investments Inc. merged with sister company Investia Financial on July 1 of that year.

On Tuesday, iA Financial Group reported earnings for its fourth quarter, ended Dec. 31. Diluted earnings per share were $2.17, up 12% year over year. Net income attributed to common shareholders was $229 million, up 10% year over year.

Total assets under management and administration at Dec. 31 were $200.4 billion, down 9% from $221 billion the previous year, amid challenging market conditions.

Within the individual wealth management business, sales totalled $6.8 billlion in 2022, down 22% from $8.8 billion the year before. Based on Investor Economics data, the company ranked first in Canada for segregated fund sales (net sales were $1.9 billion), and third in terms of assets, the management’s discussion and analysis said.