Richardson Wealth Ltd. has seen a flurry of departures of senior advisers and their teams, jeopardizing more than $1.4-billion in client assets that could go to rival wealth managers.
Earlier this week, Montreal-based senior investment adviser Marc Dalpé and his team of 10 associates departed Richardson Wealth, taking a $900-million book of client assets to National Bank Financial. Mr. Dalpé spent more than 12 years at Richardson Wealth, where he was also a member of the company’s board of directors since 2017. As well, Mr. Dalpé was a board member of parent company RF Capital Group, from October, 2020, to September, 2022.
At the same time, Robert Smith, a Toronto-based investment adviser, along with his team of three associates, left Richardson Wealth to join competitor Canaccord Genuity Wealth Management. Mr. Smith spent more than a decade with Richardson Wealth and currently manages about $300-million in client assets.
And on Oct. 27, Raymond James Ltd. announced the appointment of Wynn Harvey, an investment adviser who spent almost 12 years with Richardson Wealth and manages more than $150-million.
Mr. Dalpé declined to comment on his departure, while Ms. Harvey and Mr. Smith did not respond to The Globe and Mail’s request for comment.
Richardson chief executive Kish Kapoor told The Globe in an e-mail Wednesday that he remains committed to the company’s growth strategy to add assets through adviser recruitment.
“Eight new advisory teams have already joined us this year and our recruiting pipeline is robust,” Mr. Kapoor said.
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“Our corporate development team continues to meet with new advisers, and we believe many will join us in the coming weeks and months. Like everyone in our industry, we get excited when advisers join us and we are disappointed when they leave. We wish them well.”
The departures come after the third anniversary of Richardson revamping its business operations as a stand-alone wealth management company as it broke apart from former parent GMP Capital Inc. Today, the company manages $34.7-billion in assets, with 159 adviser teams.
During the overhaul in 2020, executives set aside $36-million in retention bonuses to pay out to advisers and employees who stayed with the firm for at least three years after the restructuring. As well, the company said at the time it would award up to $10-million in additional shares over three years to advisers who increased their client assets under management.
Typically, retention bonuses are known to lock advisers to a firm for between seven and 10 years, but Richardson only asked advisers to commit to a three-year deal. Bonuses are set up as a forgivable loan; any adviser who wanted to leave before their contract was up would have been required to repay the outstanding loan amount.
Now, three years later, the original retention contracts have expired, leaving the door open for competitors to aggressively recruit Richardson advisers, who typically manage high-net-worth clients with at least $1-million in investment assets.
Some competitors may be using back-office technology to lure advisers to join. In early 2023, Richardson advisers expressed frustration when the company switched from an in-house back office to a new custody, clearing and trade settlement service agreement with Fidelity Clearing Canada ULC. During an analyst call in March, Mr. Kapoor said while that the transition was fairly smooth in most cases, it had also caused some advisers “significant friction” in their client accounts.
As well, retention efforts may be hindered by RF Capital’s struggling share price, which dropped to $6.45 on Wednesday from $19.30 on Oct. 20, 2020, around the time the GMP restructuring deal closed.
Clare O’Hara