Insights & Market Outlook


No Conflicts

Over the last 18 months, we have had such a wonderful opportunity to build a wealth management firm we feel reflects the future of the industry.

An important element of this has always been anchored in a challenge we have continually put to ourselves – how do you build a firm putting the clients first in every possible way? The answer is a firm acting as a fiduciary, where the clients interests come first.

One aspect of this approach is eliminating conflicts that can get in the way.  I ran a very large wealth management firm at a bank for many years.  The banks in Canada are well run and have very capable people in them.  There are, however, conflicts that get in the way of a client first mindset.

Let’s start with the different stakeholders –  Canadian banks are large public companies that are accountable to their shareholders to maximize profits.   This means allocating capital to provide the maximum benefit.  There are usually 40 different businesses in banks spanning Capital Markets, Wealth Management, Retail and Commercial Banking. These businesses are diversified globally, mostly in Canada and the U.S.

As a wealth management client, it is simply not possible for every choice of a large bank to put the wealth management client first – it just doesn’t work that way – whether it’s where to invest in new technology or initiatives, funding acquisitions outside wealth management, or simply allocating capital to more profitable businesses, all these things can and do put other priorities first.

Another conflict rests in the complexity of the different businesses.  I do believe that most Advisors always try to put their clients first.   When you have 40 different businesses, of course you want to offer your clients services that exist from within the bank.  There are numerous compensation and referral approaches to encourage Advisors to recommend other products and services within the bank. Referrals can create conflicts in incentives that are offered for these services.

A final area where there are conflicts rests in the fee structure in Canada.  In the U.S., there are over 16,000 independent firms and these firms are the fastest growing component of the wealth management market.   In fact, there are more client assets within these firms than the entire wealth management industry in Canada combined.  As a result of the concentration in Canada, fees are generally much higher than other parts of the world.


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