Incorporation key to industry’s progress, firm leaders argue

CIRO’s proposal that IIROC-registered advisors be allowed to incorporate, like their MFDA-registered counterparts, continues to gain momentum. New position papers have been published and updates have come through CIRO speaking engagements and lawyers’ comments that show just how much regulatory untangling will be required to get this proposal over the line. Despite a long road ahead with no clear timeline to completion, industry leaders continue to voice support for advisor incorporation, highlighting myriad benefits for the individual advisor, firms, and the industry. 

Shaun Hauser, Founder and CEO of Wellington-Altus Financial Inc., and Matt Cicci, Head of the Private Client Group at Canaccord Genuity Wealth Management, each outlined how they see incorporation eventually impacting advisors’ day to day operations and long-term career trajectories. They weighed in on key questions around client ownership under an incorporated framework and shared what they know of the timeline ahead. They each emphasized how they see incorporation fitting into the industry’s transition from a distribution business to a service business.

“As advisor practices have matured into true businesses over the last 10 years, clients are placing greater trust, and a greater share of wallet, into their advisors’ hands,” Cicci says. “This shift demands deeper expertise within each practice and underscores the need for real succession planning. Incorporation isn’t just a structural change – it’s a path to continuity, stability, and the enduring confidence of clients.”

While not describing incorporation as a panacea for the industry’s challenges, Cicci draws a line between incorporation and the ongoing succession issues this industry faces. Both he and Hauser agree that the ability to defer tax on investments held inside a corporation might not be an obvious or immediate enough advantage early in a career to bring more young people into the advisory business. Cicci, however, notes that a corporate structure could introduce the concept of equity ownership in a practice.

Junior members of the team and those designated for succession in the business can buy or be given minority stakes in an incorporated practice, Cicci explains. In doing so succession can be formalized, and the succeeding advisor can begin to work as an owner-operator. The promise of equity share early, he notes, can be a key offering for practices looking to attract top talent in this industry as well.

Both Cicci and Hauser offered views on how incorporated advisory practices might impact who owns client relationships. Cicci notes that the question remains a technical one and that as more details emerge about the nature of advisor incorporation there may be a clearer answer to that question. He alluded, however, to the idea that when advisors move, they tend to bring their clients with them.

Hauser was more explicit in his characterization of client ownership. “There's technicality and realities. In technicality, Wellington-Altus would own the relationship with the client. In reality, and in our mind, the client relationship is held by our advisors. We are a partner in giving them services to take care of their clients,” Hauser says. “I think larger institutions would take a more technical view of that, but I can only speak for us.”

Both Hauser and Cicci noted the ongoing lack of clarity and timelines around this proposal. They cited the need to consult with multiple stakeholders, including the CRA, various provincial securities regulators, the CSA, and even possibly change provincial legislation. Cicci noted that despite the ongoing lack of clarity, he expects that by the end of this calendar year we may see more of a road map for incorporation.

The leaders each emphasized the importance of incorporation in how they see the industry moving forward. At the same time, they emphasized allowing the regulators time to bring in all the considerations possible and ensure that the eventual process for advisor incorporation comes with the buy in of the industry and few remaining regulatory issues.

“We want this done for our advisors on an ASAP basis. Having said that I think at the end of the day, this is one of those things that you want to get right, not quick,” says Hauser. “And I think the folks that are making this come alive are probably realizing this is a heavier lift than once first suspected. And I think they're actively trying to pursue an avenue that allows this to happen, but these things always take longer than they think at the start, and that'll be my expectation.”