At Steadyhand, we couldn’t be more delighted that Bill Holland is continuing to move CI Financial into the banking world. In the Financial Post last Friday, Bill reiterated that “we have to be in most of the business lines the banks [are in] to be competitive.” He wasn’t specific as to what CI will do, but they are a firm that moves fast, so stay tuned.
We’re delighted about CI’s move because it leaves more room for us to differentiate ourselves from the competition (see: Steadyhand – An Alternative to the Big Guys). If everyone in the industry looks like a bank and 95% of the industry’s assets are with these firms, a small, investment-driven firm like Steadyhand will have lots of open field ahead of it.
This consolidation trend in the wealth management business reminds me of one of our fund managers, Connor Clark & Lunn Investment Management (CCLIM). They restructured themselves a few years ago such that CCLIM became an affiliate of the parent company, CC&L Financial Group. The latter has acquired, or helped create, a number of investment management firms to complement CCLIM. All of these affiliates can focus on what they do best (investment management) and let the parent company do the dirty work in the areas of client accounting and administration, technology, compliance, and sales and marketing.
CC&L Financial Group has it right. They are striving to be big in areas where scale is beneficial (the support services mentioned above), but allow their affiliates to be sized appropriately for their specific market opportunities (in some cases, this means staying small). Where it makes sense, Financial Group has centralized functions. Where autonomy is important, they’ve kept their nose out.
I raise the CC&L structure in the context of discussing the banks, because the banks have size in all areas. It just isn’t an advantage in all areas.
Keep it going Bill. We’re pulling for you.