Richardson GMP Ltd. is out to silence critics who are "unnecessarily sounding the death knell on independent advisory firms," so it is launching a new business arm in the United States.
The wealth management firm has increasingly seen opportunities to do business in the U.S., and having obtained its licensing, plans to launch its subsidiary in the next 30 days.
"Most of our business in the U.S. will be predominantly Canadians living south of the border, with referral potential," said Andrew Marsh, chief executive officer of Richardson GMP. These clients could be cross-border executives, celebrities, sports stars, artists or other clients retiring to the states.
The move comes as competition has continued to heat up in the retail brokerage space – especially the interest surrounding the high-net-worth clients that Richardson GMP has targeted over the past few years. The company had close to $15-billion in assets under administration at the end of 2012 with 114 advisory teams across the country. Richardson GMP has also been actively recruiting new advisors.
In addition to the new U.S. division, Richardson GMP has forged a partnership with another New York-based independent firm, Dynasty Financial Partners, which has $16-billion in assets under management. This will give the company the ability to handle ultra-high net-worth clients.
"A retiree client who has just retired to Miami – their sophistication in terms of solutions is very similar to what they'd have here in Canada," Mr. Marsh said, indicating the U.S. Richardson GMP business could help that client. "However, if someone has a large, concentrated stock position or is worth $50-million or $100-million, Dynasty has much greater capability of serving those ultra-high worth families than our U.S. subsidiary."
While Mr. Marsh sees opportunity in Richardson GMP's standalone U.S. business, he thinks the partnership alone could lead to $500-million to $1-billion in additional assets under management in a span of three years, with $200-million rolling in in the next year alone.
The partnership will also direct some of Dynasty's clients back toward Richardson GMP. Mr. Marsh points to one advisor who works with celebrities and athletes such as hockey players – many of whom are Canadian. Richardson GMP will be Dynasty's wealth management solution for those clients.
(Jacqueline Nelson is a Globe and Mail Financial Services Reporter.)
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