Skip to main content

Manulife Financial headquarters in Toronto.Galit Rodan/The Globe and Mail

Just a little more than a year after it bought Wellington West Financial, National Bank Financial is flipping one part of the business that wasn't a good fit to Manulife Financial.

The small, independent financial planning group called Wellington West Financial Services Inc., will split from its parent company to add 39 new advisors to Manulife's team. While the full terms of the deal aren't known, the group will add roughly $900-million in assets under administration to Manulife's purse.

For its part, NBF spent $35.8-million in 2008 for a 12.5 per cent stake in Wellington West Financial. It then increased its share, before buying the remaining 83 per cent of the company for $333-million at the end of May last year. That all happened during a time where there was much talk about smaller brokerages being rubbed threadbare by challenging market conditions -- all eyes were open to the possibility that some bigger firms might want to tack these investment firms on. The buy was no trouble for NBF, which amassed a good chunk of capital through the recession.

NBF pursued the deal to help it expand further outside of its home province, Quebec. Because of these growth plans, the retail brokerage was thought to be the most attractive part of the business, although it was soon made clear that the capital markets group was also a big draw for NBF.

But along with those two, Wellington West also had an asset management business, as well as the financial planning division that it is now severing from the pack.

Martin Lavigne, president of National Bank Financial Wealth Management, described the deal as a "good opportunity" for the departing advisors. "In securing such a new work environment, we are contributing directly to their career development and providing support and a seamless transition for their clients," he said in a statement.

Canada's largest insurance company intends to stitch Wellington West Financial Services on to its subsidiary Manulife Securities, which will bring its employee head count up to 1,250 advisors, with $20-billion in AUM. The deal should close in the fourth quarter of this year. Rick Annaert, chief executive at Manulife Securities, praised the "natural cultural fit" connecting the two companies.

Report an error

Editorial code of conduct

Tickers mentioned in this story