Financial Horizons teams up with Justin Groupe financier to enter Quebec market

By Alain Thériault | June 27 2008 02:37PM

Financial Horizons Group has acquired a partial ownership stake in Justin Groupe financier, a managing general agency in Montreal. This move gives the Kitchener-based group a bridgehead to take on the Quebec market.

Financial Horizons Group will now become partners with Justin Groupe financier, owned by its president, Martin-Luc Derome, who told The Insurance Journal that it signed this agreement to counter the competition and the incessantly growing volume requirements by insurers, which are squeezing the independent distribution network in Canada.

The partnership agreement is part of an expansion strategy John Hamilton outlined a year ago in an interview with The Insurance Journal. The president of Financial Horizons Group was then eying Quebec and Western Canada as growth avenues. The group also hopes to intensify its presence in northern Ontario. It already runs an office in the Maritimes.

“Our aim is to be a national consolidator and if you want to be national, you have to be present in every province. We currently have licenses in the eight provinces and expect to open offices in every one of them in the next few years,” says Mr. Hamilton.

The present deal increases Financial Horizon’s advisor base to 2,000. In 2007, Financial Horizons sold $15 million in first-year commission minimum premiums and $225 million in new segregated funds assets. They currently have almost $50 million in in-force life premiums and $1.6 billion of assets under management in segregated funds.

Other deals may be in the making as well. “We’re looking to buy a firm before the end of the year, certainly in Western Canada.”

Founded in 1990, the consolidator is currently building on its foundations through total or partial acquisitions or franchise. Mr. Derome opted for a partial acquisition where he becomes a “regional partner.” 

Under this agreement, ratified by the parties on June 9, Mr. Derome becomes a regional partner, which puts him in charge of the Ontario consolidator’s development in Quebec.

The advantages that financial advisors will reap from this partnership include the group’s clout, Mr. Derome says.

The direct distribution contracts Financial Horizons operates with 23 suppliers (including four mutual fund companies), also weighed heavily in the balance. Justin Groupe financier previously had only four such contracts. In return, Mr. Derome grants Mr. Hamilton’s group unprecedented access to preferred relations with French-speaking insurers, including SSQ Vie, La Survivance and La Capitale.

Mr. Derome points out that market conditions are currently exerting strong pressure on small firms, which are prompting many players to consider joining groups. “I lost advisors that wanted to group all their business at a single MGA. They can manage their commissions and bonuses more easily, have a single point for all their documents, resource people, training, etc. This is precisely what we are offering at Horizons.”