Wellington West buys Brownstone

Wellington West Holdings has reached an agreement to purchase Brownstone Investment Planning Inc. a privately-held, Winnipeg-based financial planning firm.

“We were truly impressed at the calibre of people and expertise at Brownstone,” says Wade Lawrence, president with Wellington West Financial Services Inc. “Acquiring Brownstone will strengthen Wellington West’s overall financial planning offering, providing us further opportunity to expand our client relationships across the country.”

Aside from its base in Winnipeg, Brownstone has offices in Calgary and Toronto. The company consists of 38 staff, including 28 registered reps on 22 teams. It provides independent and comprehensive financial planning and investment services to groups, corporations and individuals.

“Their company is really almost a replica of our existing financial planning platform,” says Marc Albert, executive vice-president and chief operating officer with Wellington West Financial Services. “It’s really a match in terms of style of business and style of advisors and the breadth of expertise that they have. It would be hard to find a more compatible group of people.

“I would say the cultural fit will be extremely good.”

The next step will be to harmonize the back office procedures, including processing and compliance.

The acquisition is expected to close by Oct. 31, 2009, subject to regulatory approval, at which time Brownstone will operate as part of Wellington West Financial Services.

Wellington West already has approximately $8 billion in assets under administration and the acquisition of Brownstone will bring in an additional $359 million, with just under 6,000 clients.

The purchase does not add much to the regional scope of Wellington West, since it already has a presence in the three markets served by Brownstone, but Albert points out that the size of a firm’s asset base is critical in today’s market.

“The environment of the last year or 18 months has really strained the profitability of all the independent offices out there,” Albert says. “This has certainly created a very good opportunity, and we have our ear to the ground to make sure we don’t miss any of them.”

Due to the complexity of the industry, he says it would be impossible to approach another acquisition with a checklist of variables.

“There are too many opportunities, it would be too easy to discount them,” he says. “You don’t really know the quality of the target until you look at it seriously. In theory, you might have a wish list, but at the end of the day, you still have to do your due diligence. Even the ones on your wish list might not be doing well once they go through your due diligence process.”

(09/29/09)