With a new leader on board, expansion in mind and a renewed strategy in place, Toronto-based MGI Securities Inc. is ramping up just in time for the new year.

This past November, David Bird stepped into a new role as president and CEO of MGI, succeeding Lewis Redford. But Bird isn’t a new face around the office. In May, Bird became a director of MGI and over the past six months has been able to familiarize himself with the company, where it’s at and where it plans to go.

“As a director for the past several months, I’ve come to understand MGI’s strengths as well as the challenges and opportunities facing the company,” Bird says.

MGI employs more than 40 advisors who work in teams with 31 books of business between them. It has more than $1.8 billion in assets under administration and Bird would like to increase that number to $2.5 billion within the next year by expanding the firm and adding more advisors to its roster. As a wholly owned subsidiary of Toronto-based Jovian Capital Corp. , MGI is neither bank-owned nor entirely independent, making it a blessing for advisors who are looking for something different, Bird says.

“We offer advisors an interesting blend in which we are able to service individuals who are looking for autonomy, as well as provide them with state-of-the-art investments that they, in turn, can offer to their clients,” he says. “We are an intimate firm that is determined to keep personalized relationships with each and every one of our brokers while providing them with the independence they want.”

MGI is a full-service investment dealer that offers wealth-management services for private investors and a comprehensive range of capital market services. It has offices in Toronto, Winnipeg, Calgary and London, Ont.

“If you look at the world today, particularly on the retail side, the bank platforms really dominate the retail brokerage business,” says Dona Eull-Schultz, Jovian’s vice president of business and strategic development. “What we find that is really attractive to an individual is objectivity, the ability to be independent and entrepreneurial. These are the key things that continue to run through MGI.”

MGI continues to build a platform in which it can advise or facilitate any type of client, even if it is something it doesn’t deal with directly.

“Whether it’s a group RRSP account or someone who wants a discretionary platform, we are able to set up referral systems with many of our sister companies,” Bird says. “We are able to service any client easily as well as receive reciprocal referral agreements among all groups of companies under our parent company. We refer business to them and they refer business to us. So, it works out well for everyone.”

Founding partners Don McFarlane and Crawford Gordon both came from successful bank-owned brokerage practices and in 1999 decided to start their own firm. In 2000, McFarlane Gordon Inc., a small private-client boutique with approximately $150 million in AUA, opened for business.

“They both believed that a small independent entrepreneurial environment was more effective in delivering high-quality investment advice and personalized service,” says Sam Collins, MGI’s senior vice president of retail.

In 2001, Philip Armstrong, former CEO of Toronto-based Altamira Investment Services Inc. and now president and CEO of Jovian, started talking with McFarlane and Gordon. They all had similar ideas on the importance of an independent platform and the significant opportunities in the retail-client segment.

After a meeting of the minds, the trio started talking about forming a holding company in the financial services sector; Armstrong, already a shareholder in Jovian, decided that McFarlane Gordon and Jovian would be a good fit. Later that year, McFarlane Gordon was added to the Jovian holding company and in 2005 was re-branded as MGI Securities. MGI remained Jovian’s sole asset until the spring of 2003, when it acquired Winnipeg-based Rice Capital Management Plus Inc.

Now with Bird at the helm, MGI hopes to continue its growth. Considered a seasoned executive in the North American capital markets, with an ongoing connection to the retail side of the business, Bird brings more than 20 years of experience financing both public and private companies.

“I come from a combination of investment banking and capital markets, as well as private equity,” Bird says. “All the firms with which I have been associated have had significant retail private-client divisions. And in my career, it certainly has been an important differentiating factor for the various firms with which I have been involved in terms of the mandates and types of businesses in which they are involved.”

@page_break@In 1985, Bird was executive managing director at Toronto-based Nesbitt Thomson Inc. (which was acquired by Bank of Montreal and renamed BMO Nesbitt Burns). There, he was in charge of the capital markets and syndication groups. Bird then co-founded, and served as executive vice president of its cross-border merchant-banking program.

In 2001, Bird moved on to become director and executive vice president of capital markets at Toronto-based independent, Blackmont Capital Inc.. There, he oversaw a 500% increase in capital markets revenue in two years. Since 2004, Bird had been president of his own privately held investment company in Toronto until joining MGI earlier this year.

Recently, the entire Jovian family, including MGI, sat down to discuss its strategies and how it was executing them.

“Each company completed a strategic planning exercise and out of that each got a renewed focus, a renewed commitment and a very strong execution plan,” Eull-Schultz says. “With MGI’s platform, it includes things such as cross-platform co-operation, bringing more expertise to the MGI platform, a strong commitment to recruitment and to continue these things to which that it has already been committed.”

MGI has a flat 50% payout for all advisors with an increase of up to 55% for $1 million-plus producers, Collins says. The firm also covers telephone bills, computer costs and other expenses associated with running an office, including an assistant for any advisor who brings in minimum annual revenue of $700,000 (or a shared assistant between a number of advisors who jointly bring in the same amount). In addition, advisors can obtain shares in publicly traded Jovian.

When it comes to recruiting, Collins is constantly on the lookout. He hopes to double the number of MGI advisors to around 80 by the end of 2008, but also realizes growth cannot be guaranteed with the volatile market and recruitment cycles.

“We would like to double in size, but if we can add 10 advisors a year for the next couple of years, we would be happy,” he says.

MGI is definitely looking to expand by adding to its current offices as well as opening new ones in Western Canada and Montreal. The firm is also looking to start up smaller sub-branches in Brandon, Man., or Saskatchewan that would receive a lot of referral business.

“Our footprint is in London, Toronto, Calgary and Winnipeg, but there are definitely opportunities in Montreal and Vancouver,” Bird says. “We can now develop a business model that can effectively deliver a full range of services to much smaller satellite branches. Historically, you might have needed 20 brokers to make an economic unity; today, with technology and an efficient back office, you can run clusters of five or six individuals in sub-branches.”

When it comes to the average MGI advisor, management knows exactly the type of advisors it is looking for: those who are seasoned in their mid-30s to 40s, who have built up a good size book of business ($150 million-plus) and have more than five years’ experience. It’s not a business model for the young raw producer, Bird says.

“We are really looking for brokers who are at the second stage, who have built up significant assets but are being hindered from really taking the next step by bank-owned firms at which they are not getting the proper support, not getting the proper deal flow, or are being squeezed in the grid or squeezed in costs,” Collins says. “By moving to a smaller firm, they would be able to get a lot more autonomy but still have a company like Jovian behind them.”

Collins visits brokers one-on-one twice a month to ensure that he has a clear understanding of their individual needs as well as those of their clients. With a smaller advisor roster, MGI guarantees that advisors get a lot of access to senior management and are able to be involved in their firm. IE