More changes on the way at Assante: Canavan

(May 20, 2004) This is no longer Marty Weinberg’s Assante Corp.

Since selling the Winnipeg-based financial services company he co-founded in 1995 to CI Fund Management last August for $846 million, Joe Canavan, his successor as president and CEO, has moved quickly to put his own stamp on the company.

This week’s announcement that Daniel Bubis, its long-time chief investment officer, was leaving the firm to form Tetrem Capital Partners and would continue to manage $1.5 billion of Assante client assets on a sub-advisory basis, is just one of many changes to occur on Canavan’s watch.

“Now we’re no longer in the investment management business,” Canavan says. “I’m really changing an awful lot. We’re undertaking a massive overhaul of how we think about the business and how it’s being run.”

Bubis will run Assante’s Canadian and American equity mandates from Tetrem’s home base of Winnipeg. The fixed income book was outsourced at the beginning of the year, with global bonds going to New York-based Trilogy Advisors, while the Canadian side was allocated to James Dutkiewicz at CI.

Bubis says Tetrem will focus solely on investment management and won’t be hiring advisers to handle retail client accounts. “We’re not recreating Assante — in fact, our high net worth distribution will be primarily done through Assante,” notes Bubis. “They’ve outsourced the investment management to us and we’ve outsourced distribution to them. The institutional distribution we’ll do ourselves.”

Three weeks ago, CI announced it had purchased IQON Financial Management Inc. and Synera Financial Services Inc. from Sun Life Financial Inc. for $38.5 million in cash. Canavan says there’s no truth to the rumour he plans to roll IQON into Assante. Both acquisitions will continue to operate as independent businesses and report to Assante, he says.

“We’re going to keep IQON completely separate — we talked to the advisors and they said, ‘we’re better off having our own shop and our own leadership,'” says Canavan. “We’re in the process of hiring a new CEO and I’m confident we’ll have him by the time the deals close (in mid-June).”

“We believe if we’re in the business of providing services and opportunities to advisors to achieve their objectives and they feel business as usual is the best situation for them, I’m not about to fight it,” adds Canavan.

Canavan says he “revamped the org chart” in March when 73 employees — mainly in administrative positions, but also in the finance, customer care and sales and service areas — were laid off. That came two months after a quintet of Weinberg’s former brain trust left the company.

Since then, Canavan has added a few new faces, including Stephen Clarke, formerly of AIC Ltd., as vice-president of finance, Clive Smith, former president and CEO of Royal and Sun Alliance, as vice-president of insurance and financial services, and John Stroud, former senior vice-president of investment banking for Merrill Lynch Canada, as chief investment strategist.

R elated Stories

Former Assante execs launch new firm IQON advisors anxious about Assante

And more changes are on the way, Canavan promises. First and foremost is a segmentation strategy to separate Assante’s business by sector.

Advisors dealing with the high net worth and ultra high net worth families will work under the Assante Private Counsel banner. They will have special support from the company, including legal, accounting and insurance specialists, to meet the complex estate, investment and retirement needs of their wealthy clients.

The next tier will be the Assante Wealth Management Group for advisors dealing with average Canadian families. There’s even a plan to have a product offering for the lower end of the market. “We just have to design it so we can maintain some profitability,” he says.

Canavan notes Assante is also in the process of replacing the multiple back office systems it collected while on its acquisition sprees in the mid to late-’90s. He says the top-to-bottom changes are designed to set the stage for the company to execute its growth plan through acquisitions, recruitment of quality advisors and organic growth.

Geoff Kirbyson is a financial services writer based in Winnipeg.

05/20/04