Excel Private Wealth merged with Quadrus Investment Services Ltd. (Quadrus) on January 1, 2022. Soon after that, James McKay was appointed President and CEO of the mutual fund dealer, a Canada Life subsidiary.
In an exclusive interview, McKay filled Insurance Portal in on the next steps, including the transfer of Excel clients to Quadrus, and the fate of the Excel Wealth team in Quebec.
McKay took the helm on March 4, 2022, after a transition period alongside the previous CEO, Tim Prescott. “Tim was offered an opportunity of a lifetime,” he says, adding that it is external. According to his LinkedIn profile, Tim Prescott now serves as Senior Vice-President, Head of Asset Management at Aviso Wealth.
After working at McKinsey & Company as a consultant from 2004 to 2010, James McKay joined Sun Life, where he held several positions in both group and individual life insurance and wealth management. He was Vice-President of Distribution at Sun Life before moving to Canada Life in 2020.
Becoming President of Quadrus was a natural step up the ladder for James McKay. As Senior Vice-President, Sales Effectiveness and Performance, he led most of Canada Life's distribution network functions: compensation, communications, digital capabilities and distribution strategy. “I spent a lot of time working really closely on where we want to go next with our wealth capabilities” McKay says.
Tools to support advisors
The Quadrus CEO shared his game plan with Insurance Portal: “Our aspiration is to have a leading wealth and advice-platform for our advisors and for Canadians. We want to partner with advisors to help to grow their business and offer the right solution to Canadians through our wealth platform.”
McKay aims to make advisors’ life easier by offering them new technology. He says he works with advisors daily to ensure they take advantage of the new capabilities of his platform. In 2022, it will be especially important that advisors have the right tools to interact with their clients, he adds.
“We are facing more volatility than we’ve probably seen in the last 15 years,” he says, referring to inflation rates and the crisis in Ukraine. “We have an important role to play in ensuring that advisors are prepared to help their clients make the right decisions,” he adds.
Advisors and 31-103
McKay is also striving to stay ahead of regulators’ expectations in an industry that has seen numerous changes “in terms of how we conduct business” in the last five years. He points out that the past two years have seen growing digitization of sales activities, which has heightened investors’ expectations of advisors. “Clients’ expectations are changing in terms of how they want to do business with us. We’re even seeing changes in how advisors want to do business,” he points out.
Quadrus’ efforts to better prepare advisors are also fuelled by client-focused reforms. James McKay says that the Regulation to amend Regulation 31-103 respecting Registration Requirements, Exemptions and Ongoing Registrant Obligations is the biggest challenge in this area. “Since January 1, 2022, we’ve taken a very proactive approach to train advisors, rolled-up a very specific leading technology to support advisors in meeting their obligations,” he explains.
On December 31, 2021, the Canadian Securities Administrators (CSA), the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association of Canada (MFDA) implemented the following client-focused reforms: Know Your Client, Know Your Product, Suitability Determination, Relationship Disclosure and Product Due Diligence. The conflicts of interest reform came into effect on June 30, 2021.
This regulatory tsunami has had a significant impact on mutual fund representatives’ (advisors) practice, adding to their regulatory compliance burden. In its National Instrument 31-103, the CSA states that it expects advisors to present clients with clear and relevant information that they can easily understand.
To know products and clients better and ensure suitability, as prescribed in 31-103, advisors must follow additional processes. “Until [advisors] are comfortable, we support them through the process,” says James McKay. He says it is incumbent on brokers to enable advisors to “meet a higher bar” in compliance, at a reasonable cost.
Winfund at Univeris for $100 a month
Prior to the merger, Quadrus had $23 billion in assets under administration and Excel Private Wealth had close to $2 billion, according to Quadrus' CEO. Quadrus uses the Univeris mutual fund back-office platform, while Excel was using Winfund at the time of the merger. Quadrus chose to extend Univeris to both organizations. James McKay says that the transition will occur fully and automatically in early August 2022. “We didn’t want to create disruption coming into our RRSP season. We also were sensitive to our Univeris partners,” he explains. Univeris will also be upgraded in the meantime, he adds.
The choice hinged more on Univeris’ capabilities than the sizes of the two organizations, McKay underlines. “Our [Univeris] offering has much broader capabilities than Winfund, including a lot of digitization, like digital onboarding of clients, know-your-client updates[…] There’s a number of processes and capabilities on Univeris that don’t exist in the Winfund offering today. It’s pretty paper based,” he explains.
Even though Quadrus has automated client transition, he says that advisors typically lead their clients through the on-boarding process.
In addition, McKay “just announced for the first time a dealer platform fee of $100 per month per advisor” for the entire Quadrus service offering. This includes Univeris and other capabilities, he says. “That’s relatively low compared to industry standards for dealer fees, and lower than what advisors would have been paying on the Excel Private Wealth platform.”
The Quebec team
Before he left Quadrus and Canada Life, Tim Prescott told Insurance Portal that he intended to increase Canada Life’s French presence and capabilities significantly. “We’re committed to supporting advisors, clients and our employees as well as continuing the great relationships that Excel Private Wealth has established in Quebec," he said.
Normand Morin is the former CEO of Excel Private Wealth. After his position was eliminated in late 2020, he stayed on at Excel as a mutual fund representative. In March 2022, he joined Mérici Services Financiers, also based in Sherbrooke. At the time, he told Insurance Portal that proximity and independence weighed heavily in his decision.
“Normand left Excel in 2020, long before these discussions (about the merger) started,” James McKay says, explaining that the transition was independent of this process. David Stewart, COO of Financial Horizons Group, led Excel Private Client during the transition, he points out.
In September 2021, Canada Life appointed Sean Downey Vice-President, Wealth Distribution Platforms. He is responsible for growing assets under administration for the broker platforms (including MFDA and IIROC licensed advisors). He is also in charge of developing a strategy for all of Canada Life's advisor channels.
“We are always looking to grow our bilingual first-French talents,” James McKay says, adding that “We are moving the two senior wealth distribution representatives from Excel Private Wealth over to Quadrus. They are leading our focus on the Quebec market. Sean Downey will continue to push Quadrus forward, including the (Quebec) portion of the business.”
Following the merger, Sean Downey appointed two managers from Excel Private Wealth to oversee Quadrus' Quebec operations.
Louise-Marie Rousseau has been appointed Regional Vice-President, Quadrus. She briefly served as Vice-President, National Sales, for Excel Private Wealth, after having worked at Financial Horizons Group for 11 years as Vice-president of Sales for the Quebec Region.
Benoît Tremblay has been named Regional Account Executive, Quadrus. Since 2019, Tremblay was National Sales Director for Excel Private Wealth, and was its Business Development Manager, Quebec Region, for six years.
In his announcement, Downey says the two were instrumental in the amalgamation process and will continue to focus on the strong relationships they have built with advisors as they transition to Quadrus.
Retaining consultants
According to the CSA public register, Quadrus has nearly 3,300 registered representatives. Prior to the merger, Excel Private Wealth had 247 registered representatives.
James McKay plans to retain as many of the 247 representatives who were registered with Excel before the merger as possible. “Formally, they all transitioned on January 1 as part of a regulated entity, but we are going through the contracting process right now. We’ve had a few advisors announcing their intentions to leave early on. We anticipate the majority will be landing with Quadrus. We’ll have a better answer in a couple of months,” he says.
As for his Quebec presence, James McKay says he has between 450 and 500 advisors. He expects to add 30 per cent or more in Quebec with the help of Excel, something he is “quite excited” about. He believes that listening to advisors is the key to motivating them to stay with Quadrus.
Bringing all of Excel's operations, compliance and support staff, as well as its Sherbrooke office, to Quadrus is one of the biggest benefits of the merger, James McKay continues. “It bolsters our capability within the province and ensures continuity for the advisors at the same time,” he says.
