Bank of Nova Scotia is in talks to sell HollisWealth, an independent adviser network, as the wealth-management industry faces slowing growth and greater regulatory pressure, sources say.Fred Lum/The Globe and Mail
Bank of Nova Scotia is in talks to sell HollisWealth, an independent adviser network, as the wealth-management industry faces slowing growth and greater regulatory pressure, sources say.
Quebec City-based Industrial Alliance Insurance and Financial Services Inc. is the front-runner to buy the business, those people said. It isn't clear how much Industrial Alliance is offering for the asset or if the process will result in a definitive sale.
HollisWealth provides advisory services including investments, insurance, mortgages, tax services, estate planning and private banking. The firm's network consists of about 800 advisers in more than 300 locations across Canada.
Scotiabank is mulling a sale of HollisWealth at a time when regulators are forcing wealth-management firms to disclose hidden fees and commissions – sweeping changes that are driving up compliance costs across the industry and squeezing margins.
Wealth management, meanwhile, has become an important focus for insurers as they grapple with modest growth and low interest rates that are hampering insurers' ability to generate low-risk returns on investments.
Scotiabank spokeswoman Diane Flanagan and Industrial Alliance spokesman Pierre Picard declined to comment.
Toronto-based Scotiabank is weighing a sale of HollisWealth some nine years after it made its initial investment in the firm's predecessor parent company DundeeWealth Inc. In 2007, Scotia bought about 18 per cent of wealth-management firm DundeeWealth for $348-million. Then in 2011, Scotia acquired the remaining shares for about $2.3-billion.
In late 2013, the firm was renamed HollisWealth after the street in Halifax where the bank's historic head office is located: Hollis Street. The rebranding was prompted by an expiring trademark agreement.
HollisWealth has since undergone other changes. Earlier this year, the then-head of HollisWealth, Tuula Jalasjaa, left the firm.
A sale of HollisWealth also would mark another step in the restructuring of Scotiabank's wealth-management business.
Late last year, Scotia Wealth Management rebranded itself and combined services including financial planning, investment management, private banking, insurance, business-transition planning and estate and trust services. At the time, executives said the goal was to create a one-stop shopping model for customers.
Tim Kiladze