Halifax’s home-grown, employee-owned investment dealer Beacon Securities Ltd. is taking an aggressive approach to new growth. It’s adding more trading staff and a presence on the Toronto Stock Exchange and launching plans to double revenue in all its major business categories over the next few years.

The new moves coincide with the recent arrival of executive vice president Daniel Holland, who joined his father, Lonnie, in the business in 2006. The younger Holland brings extensive experience in Europe, having earned an MBA from INSEAD (France) before spending nine years working in capital markets for Canadian banks in Paris and London. He has also consulted in change and operational management and dealt with clients in Britain, France, Spain and Israel.

The elder Holland founded the Halifax firm in 1988. It now has an institutional sales office in Montreal, with plans to open one in Toronto, as well as open a network of retail sub-branches.

Daniel Holland says the company’s future growth will rest on its three current pillars: institutional fixed-income, institutional equity sales and trading, and private client.

“We want to beef up each leg,” he says.

On the institutional side, which accounts for approximately half the firm’s business, considerable growth will come from greater secondary trading.

“Our niche is really with secondary and tertiary fund managers,” Daniel Holland says. He adds that, in Beacon’s case, the traditional emphasis on the top 20% of clients does not apply. “Our focus is not on the top 20%, but the 20% below that.”

The company recently hired its first full-time equities trader and last November became the first firm in Atlantic Canada to become a participating organization on the TSE. (Its broker number, 87, was selected because it is the jersey number of hockey star Sidney Crosby, a Nova Scotia native.) In addition, the firm recently hired its second research equity analyst and is looking for a third. “We intend to grow the number of companies under coverage,” the younger Holland says.

What will not expand noticeably are the company’s product offerings.

“We haven’t gone after a lot of brand new products,” he says. “We have kept it conservative. People know who Beacon Securities is, and it’s a good perception.”

On the private-client side, growth is linked to a new partnership with a Toronto advisor and the further rolling out of Beacon Wealth Management, which was founded in 2006. It is the only wealth-management company in the country to provide a flat-fee IIROC agency model alternative for financial advisors. “We are starting to attract advisors to that model,” says Beacon president Jane Smith.

In the past six months, six new advisors have been added to the private-client side of the dealer, bringing the total number to 15, Smith adds. The goal is to have advisors in all four Atlantic provinces — at present, it has advisors in Nova Scotia only — expand further in Ontario and build the business in the West.

But numbers aren’t the bottom line. “We don’t want to grow too quickly on this side,” Smith says.

Daniel Holland notes: “We want to make the advisor experience positive. We take longer to bring people in because we want the relationship to last.”

Daniel Holland’s arrival at the firm is largely Smith’s doing. A few years ago, the company found itself at a crossroads, she says. Three choices faced Beacon: grow the business, sell the business or watch the business wither. The executives opted for growth.

“I convinced Lonnie this is what he ought to do,” Smith says.

The plan calls for a new corporate finance division within the next two years, hiring more account managers and opening “lots” of sub-branches. There are now two in Halifax, one in Antigonish, N.S., and six in Ontario.

“Some will stay as sub-branches, some will merge, some will become an office,” says Smith.

One thing that will not change is the headquarters’ location. “Our head office will always be in Halifax,” says the younger Holland. The city, he notes, is a reflection of the way the company wants to do business: with an emphasis on relationships. In fact the firm’s tag line — “Guidance, Commitment, Results” — was suggested by a client.

The commitment to Halifax as head office and to expansion is reflected in the recent purchase of a new building in the city’s downtown core. “It’s twice the size” Daniel Holland says, “to facilitate growth.”

@page_break@Today, Beacon has almost 30 staff and more than 5,000 clients. “We have more capital within the business than anyone else,” Holland says. “We have the opportunity to do more things than other firms. [But] you have to be prepared to take on the liability and the risk when the deals are announced.”

Beacon is prepared. “This model is aggressive,” Smith says. But, she feels, the timing is right. Many clients are moving from the big firms to smaller ones. The reason, she says, is the quality of relationships.

Years ago, banks and others perceived they had a fiduciary duty to their customers. “I don’t think they do anymore,” she says. “That sense of trust has been violated. Now, people are more willing to trust the smaller guys.”

And if that increased trust doesn’t materialize and the potential for triple-digit growth slips away? Then Beacon will revise its short-term plans.

“It’s the beauty of being small,” Smith says. “There is opportunity to be more flexible and nimble.” Unlike publicly traded companies, Beacon can measure itself and its success differently.

“It’s a luxury,” she says.

Diversity is also an asset. “We will never be a one-horse show,” Daniel Holland says. “We’re not reliant on any one business model. We have always been different.” IE