Canaccord Financial Inc. is closing 16 of its wealth-management offices across the country and reducing the number of advisers at the remaining locations in a bid to restructure the money-losing business.
The company said Monday the move will cut the number of wealth-management offices by half in Canada, but would not say how many people would be losing their job.
"We can better cater to the needs of our clients through an elite team of investment advisers who have demonstrated their abilities to generate meaningful value for our clients, foster long-term client relationships and an enhanced client experience," John Rothwell, president of Canaccord Wealth Management (Canada), said in the announcement.
Canaccord will have 180 investment advisory teams across Canada after the cuts compared with 269 on June 30. The cuts came as Vancouver-based Canaccord announced a deal to acquire the wealth management business of U.K.based Eden Financial Ltd., a boutique private client investment management business.
Canaccord is paying $20.3 million in cash, including $12.2 million on closing and $8.12 million after 12 months, subject to revenue retention and rev-enue mix thresholds. Further incentives of up to $6.3 million are also payable if certain targets are reached.
The company said Eden Financial will help provide greater scale to Canaccord's wealth management business in London and bolster its offerings.
Globally, the division generated $57.2 million in revenue in its most recent quarter, but on an operating basis, after expense allocations, the division recorded a loss of $6.5 million before taxes.
Canaccord's wealthmanagement business in North America and Australia lost $7.3 million before taxes in what was the company's first quarter.
Assets under administration in Canada totalled $13.1 billion on June 30, down 11 per cent from $14.8 billion at the end of the previous quarter and down 16 per cent from $15.7 billion the previous year.
The company said Monday it would take $11.5 million in charges in its second quarter report in connection with the Canadian wealth-management closures.
Smaller firms like Canaccord have faced increased competition from the country's large banks, which have worked to grow their wealth-management business in recent years.
