Tag Archives: Industry commentary

Canada’s Investment Industry: A Year in Review (IIAC Blog)

Canada’s Investment Industry: A Year in Review (IIAC Blog)

My latest Letter from the President examines year-end 2017 securities industry statistics, the challenges faced by large and small investment dealers, and the outlook for the mainline businesses and firm groupings.

Overall, the industry turned in a mixed earnings performance last year. Fee-based business powered retail earnings. The self-clearing retail firms recorded the highest earnings in three years, while the institutional boutiques fared the worst. Falling share values contributed to weak investment banking results in the last months of 2017, and dragged down earnings at the integrated dealers, even though corporate advisory fees held up … Continue reading →

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Attracting Capital to the Wealth Management Business (IIAC Blog)

Attracting Capital to the Wealth Management Business (IIAC Blog)

My latest Letter from the President describes the opportunities and challenges for the retail investment industry. While we estimate about 30 retail boutiques lost money, on a net basis, in each of the last four years, it is important to stress that many small and mid-sized firms have been profitable.

Firms have made herculean efforts to control cost increases through staffing reductions, increased reliance on technology and out-sourcing, and adjustments to advisor compensation grids.

Firms have also focused efforts on improving advisor productivity through training and continuing education programs. They have boosted their competiveness by providing … Continue reading →

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The Changing Landscape of the Investment Industry (IIAC Blog)

The Changing Landscape of the Investment Industry (IIAC Blog)

Following two years of back-to-back earnings gains, overall operating profit for Canada’s investment industry declined 13% year-over-year in 2015. Both revenue and profit improved for the industry as a whole in the first quarter of 2016.

Aggregate numbers do not tell the whole story. A tsunami of change continues to batter Canada’s investment industry.

– Fixed costs escalate relentlessly to meet the technology and systems demands of front and back office.

– Regulatory reforms not necessarily efficient as cost/compliance dimension not scoped out beforehand through cost-benefit analysis.

– Larger firms like RJO Futures … Continue reading →

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The Five Trends Shaping the Wealth Management Business (IIAC Blog)

The Five Trends Shaping the Wealth Management Business (IIAC Blog)

On April 7, 2016, I attended the SIFMA’s 38th Annual Private Client Conference in New York City. Senior wealth management professionals, representing firms of all sizes, from throughout the country, focused on the challenges and opportunities of 2016 and beyond. Speakers provided compelling stories and statistics.

In my April Letter from the President I write about the five trends shaping the wealth management business in the U.S. (and elsewhere)—a topic addressed at the conference. The five trends are:

1. Investors are increasingly valuing interactive, comprehensive relationships with their financial advisors, and planning. 2. Investors are seeking … Continue reading →

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IIAC’s Ian Russell on BNN – Factors Battering Bottom Lines of Boutique Firms (IIAC Blog)

IIAC’s Ian Russell on BNN – Factors Battering Bottom Lines of Boutique Firms (IIAC Blog)

Low commodity prices and increasing regulatory costs are resulting in layoffs and shutdowns in the investment industry. The Investment Industry Association of Canada’s President and CEO, Ian Russell, appeared on BNN to discuss the perfect storm hitting firms, the rising regulatory costs, and why there may be a light at the end of the tunnel. He was also asked what he would like to see in the March 22 federal budget. Click the icon to watch the interview. 

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2015 Boutique Earnings Battered by Poor Markets and an Escalating Regulatory Burden (IIAC Blog)

2015 Boutique Earnings Battered by Poor Markets and an Escalating Regulatory Burden (IIAC Blog)

My latest Letter from the President summarizes the recently released annual results for investment dealer firm groupings over the past year. 2015 was one of the worst years in terms of cost increases, earnings performance, layoffs and firm attrition. Retail and institutional boutique firms were hard-hit by a perfect storm of adverse cyclical and structural business conditions, the need for new technology and relentless escalating regulatory compliance costs. The pressures on business lines unleashed structural change in the industry—from firm downsizing, to mergers and acquisitions, to firm closures.

The considerable impact of the compliance burden on … Continue reading →

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IIAC’s Ian Russell Discusses State of Independent Dealers on BNN (IIAC Blog)

IIAC’s Ian Russell Discusses State of Independent Dealers on BNN (IIAC Blog)

Ian Russell, IIAC President and CEO, appeared on BNN to discuss the state of independent firms. He described the “perfect storm” of factors contributing to current conditions and outlined the inherent competitive advantages boutique firms offer, before underscoring their critical contribution to Canada’s capital markets.

Russell also noted that the regulatory burden imposed on firms has contributed to the plight of the industry, and reiterated the IIAC’s responsibility and commitment to pushing back and encouraging regulators to exercise caution and perform a cost-benefit analysis before adding to the burden.

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Ian Russell on BNN – Saving the TSX Venture Exchange (IIAC Blog)

Ian Russell on BNN – Saving the TSX Venture Exchange (IIAC Blog)

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Pulling Out the Stops to Rescue the TSX Venture Exchange (IIAC Blog)

Pulling Out the Stops to Rescue the TSX Venture Exchange (IIAC Blog)

The singular event that has drawn considerable attention to the investment industry during the past year has been the steady withdrawal of boutique dealers from IIROC registration through mergers and amalgamations, the shuttering of operations or a shift to lighter registration, notably Exempt Dealer status.

The plight of the small dealer boutique firm has coincided with the collapse of the public venture market, the TSX Venture Exchange (TSXV).

In my latest Letter from the President, I discuss the issues facing small dealer boutique firms, the factors contributing to the decline in the TSXV, and the steps … Continue reading →

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The U.S. Financial Industry Regulatory Authority (FINRA) Focuses on Culture (IIAC Blog)

The U.S. Financial Industry Regulatory Authority (FINRA) Focuses on Culture (IIAC Blog)

On January 5, 2016, FINRA released its 2016 Regulatory and Examination Priorities Letter. It is instructive to learn that firm culture, ethics and conflicts of interest—and the significant role that all three play in the conduct of firm business—are top priorities for FINRA this year. CEO Richard Ketchum stated: “In 2016 FINRA will be looking for firms to focus on their culture and whether it is putting clients first … Our goal is not to dictate specific culture, but rather to understand how each firm’s culture affects compliance and risk management practices.”

Canadian regulators should take … Continue reading →

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