| TORONTO, April 28
TORONTO, April 28 Royal Bank of Canada's wealth
management division has firm targets for growth, aiming to add
both advisers and assets every year, but Canada's biggest player
in the high net worth arena is not looking at acquisitions as a
source of growth.
"In Canada, we have leading market share and we are not
looking at any major acquisitions," David Agnew, chief executive
at RBC Wealth Management Canada, told reporters on Monday.
"However, our strategy since 2005 has been looking for
high-quality investment professionals who are looking for a firm
to provide the best experience for their clients. So that has
been our acquisition strategy -- one by one, high quality
RBC said it has 19 percent of the market share in Canada's
coveted high net worth segment, which serves clients who have
more than C$1 million in investible assets, primarily in its RBC
Dominion Securities full-service brokerage and RBC PH&N
Investment Counsel units.
Wealth management at Canada's biggest bank brought in C$1.5
billion ($1.36 billion) in revenue and C$235 million in profit
in the first quarter of 2014, about 11 percent of the bank's
profit. The wealth management unit has C$412 billion in assets
Agnew was quick to list targeted headcount growth for each
service, including adding 25 net new advisers every year at RBC
Dominion Securities, which has 1,576 advisers.
The bank also wants to boost the number of advisers at PH&N
from 62 to 80 - and ideally 100 - over the next five years, and
add two to five private bankers every year to international
The bank has increased the number of advisers at RBC Wealth
Management Services - a separate team of wealth and insurance
specialists - to 206 from 185 last year, and Agnew said RBC is
continuing to invest in that area.
"The war for talent has been quite aggressive," he said, but
noted that RBC may benefit from looming regulatory change known
as the Client Relationship Model 2, which includes more arduous
documentation requirements for performance reporting and cost
and compensation explanations.
Agnew said the mandated changes, which roll out gradually
over the next three years starting in July, will cost the bank
more than C$10 million but probably less than C$20 million.
Industry sources have said the cost of the regulatory change
to enhance disclosure may benefit big players, because they have
the scale to make technological change that smaller wealth
managers may find more difficult to afford.
Agnew said RBC is fully supportive of the move towards more
transparency, and said many of the changes will not affect its
wealthiest clients, who have already chosen a fee-based model of
service rather than the commission-based service that will see
the biggest changes from the regulation.
Some 56 percent of the C$230 billion of assets at RBC
Dominion Securities are fee-based, and Agnew said fee-based
business is growing about four times faster than
commission-based transactional business, by assets. Between 2012
and 2013, fee-based assets grew 19 percent versus 5 percent for
commission-based assets, the bank said.
($1 = 1.1027 Canadian Dollars)
(Reporting by Andrea Hopkins; Editing by Diane Craft)