Toronto-Dominion Bank, building on its deal for money manager Greystone Capital Management Inc. earlier this month, plans to hire 200 advisers in Canada this year to boost profit at its wealth-management division as much as 10 percent.
The additions are part of Toronto-Dominion’s push to expand in a division that includes online investing, advice and asset management to take advantage of what wealth-management head Leo Salom says are attractive demographics in North America.
“We’ve laid some very strong foundations, but we’re still growing,” Salom said in an interview from his Toronto office. “This year we will put on over 200 new advisers between our financial-planning arms and our private-wealth-management division, and the reality is next year we’ll probably do another similar number.”
Canada’s largest lender by assets has about 2,100 wealth planners and advisers for its domestic business. The expansion is designed to help the bank reach its goal of “double-digit growth rates” for the wealth-management division in both Canada and the U.S., which Salom anticipates will translate to 9 percent to 10 percent annual earnings growth for the business over the next four years. Toronto-Dominion, which posted profit of $10.5 billion for 2017, earned $1.2 billion of that from wealth management in Canada and the U.S.
“There’s still a tremendous amount of opportunity in that space in Canada and in the U.S.,” Salom said.
Toronto-Dominion has already been building its advice business from within, expanding in financial planning, full-service brokerage and private banking. The firm has also targeted its direct-investing business for growth, after finishing a $125 million revamp that added mobile trading functions and sets the stage for more automated investing tools such as robo advisory. The bank is also getting bigger in asset management.
Toronto-Dominion’s July 10 agreement to buy Regina, Saskatchewan-based Greystone for about $792 million will add $36 billion of assets under management and push the company past Royal Bank of Canada to become the country’s largest money manager. TD Asset Management will oversee about $393 billion of client assets after the transaction is completed, expected in the second half of this year.
The Greystone deal followed Bank of Nova Scotia’s agreement earlier this year to buy MD Financial Management from the Canadian Medical Association for $2.59 billion, a month after it spent $950 million to acquire Montreal-based Jarislowsky Fraser Ltd. Raymond James Financial Inc. bought Montreal-based MacDougall MacDougall & MacTier Inc. in 2016 as part of its expansion strategy in Canada.
Toronto-Dominion would consider further wealth deals if they were a good cultural fit, though such circumstances are hard to find in Canada, Salom, 52, said.
He said he sees the acquisition as a “bolt-on” to complement its existing asset-management business, while giving institutional clients and its wealthiest customers access to Greystone’s areas of expertise. Those include funds that invest in commercial real estate projects, commercial mortgages and infrastructure.
“Greystone was a unique piece for us,” Salom said. “It now gives us a nice big swath of alternative asset classes to be able to bring to bear to institutional clients and also high-net-worth clients as well.”