Firm's founder says prospect of grid cuts and fears about technology are propelling advisor movement
This is the era of the independent as the prospect of grid cuts at the big banks and fears over technology prompt the country’s top advisors to weigh up their futures.
It’s a bold statement but one Charlie Spiring is well positioned to make. The founder of Wellington West, which was eventually bought by National Bank in 2011 for $333 million, has also held positions on the Executive Committee of National Bank and on the board of the Investment Industry Association of Canada (IIAC).
Spiring is now the founder and chairman of Wellington-Altus, his second go-around in the independent space, which in three years has risen to $12 billion in assets.
He told WP the firm’s rapid progress is not as simple as going head to head with the banks. This time he’s utilizing their standing as trusted custodians and using the likes of National Bank, Royal Bank and Fidelity for its back office, while still circling their top talent on the wealth side. Friendly foes might be somewhere nearer the truth.
Spiring believes he has been able to lure some of Canada’s top advisors because, in part, Wellington-Altus had the advantage of starting with a clean slate and was then able to build on those bank relationships. In doing so, ironically, it’s become a better destination for the banks’ brightest minds.
“We had no legacy systems,” he said. “When an advisor joins Wellington, the technology is better than what the banks have. That’s inconceivable [to them] because the banks have brainwashed them, saying we have the best technology. Well, that's just wrong; the best technology in the industry resides at Wellington-Altus. And if you figure out technology to be your friend, then it’s game on.”
Tech is certainly one of its selling points but the industry veteran says this is just one of many. Management are all advisors and, after the sale of Wellington West, they have capital to work with. Then there is Spiring’s wide experience. During his nine years at the IIAC he travelled extensively in the U.S. absorbing information and understanding how independents were winning south of the border.
He reasoned that if he got the right people on board, and added in the best tech and the world’s number one money manager, he’d been on to something. The last part of that equation is Ark Invest’s Cathie Wood, with Wellington-Altus holding Ark’s only SMA in Canada.
Spiring said: “The future has never been brighter or better for independents, especially independents who have got their game together because there are others competing out there. Our game is focused, though, and with our leadership all being investment advisors, we can connect so well with the best in class out there. I'm so proud of that.”
Compliance is a bigger burden than it used to be, although he added that’s not a bad thing for the industry. What will separate the smart firms from banks, Spiring said, is “common-sense compliance” and the opportunity to save ambitious advisors time while giving them more freedom. And then there is the thorny issue of pay.
Spiring predicted that, with bank CEOs under increasing pressure to make earnings, the big thing coming over the next five or 10 years is grid cuts. With the gap between the banking side and wealth side almost 20 points - it's about 30 to 50 – advisors are in the crossfire.
He added: “The entrepreneurial top advisors will start making those decisions and go to independents. Our goal is just to win our share of that trade. Other independents are going to win some of that too because it's independents’ time. The banks will be better off and the advisors will be better off with a strong independent core, so we need the Raymond Jameses and the Canaccords and the Richardsons.”
The size of the opportunity should not be underestimated, Spiring said. He’s thinking “quasi-bank” status and believes that if Wellington-Altus get it right, advisors will be lining up to join because they’ll get a say in their business while their grid is protected.
He said: “These are strong-willed, successful, independent people and the banks are saying ‘shut up, don't listen and just execute what we tell you to do, oh, and sell some of our product because that's how the world should be’. But banks don't always have the best product.
“We don't care if it's TD or BMO or whoever - we just want access … I want to be a friend to them at the front door saying, ‘Hey, we can help you distribute some of your best products’. But at the same time, I'm going to steal your advisors who are unhappy, and sorry but that’s how the game is.”