Synergy founder prepares for Assante challenge

(August 29, 2003) Joe Canavan held a breakfast meeting with an Assante advisor this week in Toronto and came away with three pages of suggestions. That’s perhaps an indication of the challenge Canavan faces as he prepares to take the helm at Assante, part of a complex deal announced last week that will see CI Funds acquire both Assante and Synergy, the fund firm Canavan founded in 1997.

Assante advisors have become increasingly vocal in their criticisms of how the Winnipeg-based company is run, complaining about the firm’s focus on head office development, its push on in-house products and its compensation grid, geared to reward top producers.

Canavan says he’s aware of those issues, but says the Assante advisors he’s spoken to are not griping. “They’re saying if you want to reshape this and make it an outstanding firm where people are proud to work, you have to look at these issues and that’s what I’m trying to get out and hear,” he said in an interview with Advisor.ca. “I’m trying to get an unbalanced, unbiased perspective and these guys are delivering for me.”

Canavan, who has signed a three-year contract with CI to run Assante, says he wants to turn the firm into a service business, focused on the individual advisor. “Our constituent is the advisor and I’m going to do everything in my power to support the advisor.”

In-house products are fine, Canavan believes, as long as they meet the standard. “One of the first things I’m going to do is to dissect all the products and make sure they are outstanding,” he says. “I don’t want to be representing something on the street to investors if it doesn’t fully represent the philosophy of the firm.

“I believe that you can have outstanding products that are proprietary and that there are others you can’t build on your own, but you still want to have them on the platform,” he says. “I want the best products on my shelf I can get. It’s not about having someone come in and pay the most for shelf space.”

Canavan will head to Winnipeg next week to meet with Assante’s management team. He also plans a road trip to meet with Assante advisors across the country. “My hope is that we have an open, honest dialogue and they can share with me what their vision would be, then I can go away and we can build a strategy,” he says.

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Reflecting on the deal he struck with CI, Canavan says he’s on the same wavelength with CI president Bill Holland. “Two years from now, I believe there’s going to three big banks, maybe four, three major insurance companies and three major financial advisory firms left. If there are only nine distribution outlets you’ve got to do something different. You need scale to be successful, there’s no question.”

As for his own firm, Canavan believes Synergy investors will be the big winners in the agreement, even though the firm will be swallowed up by CI and some of its smaller funds will likely be merged.

“We have an outstanding fund family and a great management team, including Dave Picton and Tom Marsico,” Canavan says. “But now we have also have access to Bill Miller, Kim Shannon and Eric Bushell, outstanding managers that otherwise weren’t available to us.”

Canavan says because CI has an efficiently run back office, he’ll likely be able to lower the MERs on Synergy products. “I think our investors are going to be very happy about that.”

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Some advisors have already started a discussion about the merits, challenges and probable future of Assante after this deal. Share your thoughts with your fellow advisors in the Talvest Town Hall on Advisor.ca.

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

(08/29/03)