Targeting international wealth

Both DS and Bank of Nova Scotia, also based in Toronto, have built platforms licensed by the Investment Industry Regulatory Organization of Canada (IIROC) that cater specifically to Canadian advisors who want to work exclusively with international clients.

DS is home to 1,537 advisors in Canada. Among that group, 55 advisors are dedicated solely to the international platform.

Scotiabank’s international advisory platform, which is home to 53 advisors, runs independently from its domestic brokerage, ScotiaMcLeod Inc., and is the full-service brokerage business of Scotiabank’s international wealth-management and pensions division.

“Walk around the sixth floor of our office,” Taylor says “and the first language you will hear is Spanish, followed by Portuguese, Cantonese and then English.”

The clients served by these advisors are either Canadian citizens who have moved to reside outside of Canada permanently or foreign investors looking to invest in the Canadian marketplace.

Serving these clients doesn’t come easy. Advisors are required to travel three to seven times a year to meet with their clients. As well, these advisors use these travel opportunities to meet face to face with prospective clients.

“We have so many clients at every corner of the world,” Taylor adds, “so one of the best ways for us to attract new clients is through referrals.”

To get such referrals, DS advisors work closely with the parent bank’s international private banking group. Says Taylor: “Often, these two groups will travel together to meet clients – and it will provide an opportunity in sourcing new client business. Clients are much more receptive when they’re given a face-to-face introduction from a trusted party.”

Brand recognition is a vital part of prospecting for clients internationally, just as it is when prospecting for clients at home. DS was established in 1901, and the firm’s long-standing reputation puts it ahead of competitors, Taylor says: “We have built a robust domestic wealth-management platform for Canadian clients, and it’s from that same framework that the international business emerged. People have come to trust the strength and stability of [Royal Bank of Canada (RBC)] and Canada itself as a sovereign jurisdiction.”

In addition, several industry awards have helped RBC to expand its brand beyond Canada’s borders, Taylor says: “Clients really do seek us out. When you start to do the research behind the brand and see that we were ranked the fourth-safest bank in the world or that we’re the sixth-largest wealth manager, these rankings bring the clients to us.”

Scotiabank’s strategy also is built on brand recognition – especially its well-known local banking presence abroad. Along with banking operations in Asia, Europe and the Caribbean, the bank has a big footprint in Latin America, including Mexico, Chile, Peru and Colombia. In fact, there are more than 500 individual branch locations in each of Peru and Mexico.

“We have clients who bank in these countries who are seeking international advice for their investment portfolios and want to stay with a brand they trust,” says Antonio Vianna, managing director, international investment advisory, with Scotiabank. “So, they’re able to be referred directly to a Scotiabank international advisor who will speak their language but who knows the international market.”

Both banks consider their main competitors in this space to be the large global players, such as London-based HSBC Holdings PLC, New York-based Merrill Lynch Wealth Management and Switzerland-based Credit Suisse Group AG and UBS AG. None of these firms have Canadian wealth-management platforms.

“As a bank,” Vianna says, “we have a solid credit rating. And after 2008, Canada obviously became a key country for people to invest with. Canadian banks are ranked as the safest in the world, so this gives us an advantage.”

The competition is not only for clients but also for talent. Last year, Scotiabank recruited eight advisors to join its international platform from its competitors – including DS. But a major difference in Scotiabank’s recruitment strategy is that it also looks at talent in its local branches abroad. In the past, the bank has hired advisors from Chile, Mexico and Asia – all of whom now are Canadian citizens and work on the IIROC platform (39 of the advisors on the roster have relocated to Canada).

“These advisors,” Vianna says, “bring not only the language skill needed with international clients but also the cultural challenges that our clients might be facing in those countries. [These advisors] are able to connect with clients on a different level.”

DS, for its part, hopes to expand its platform by hiring three to five advisors a year to help with its growing international clientele, which includes investors living in the Caribbean, Latin America and Hong Kong. Taylor notes that the firm also is looking for advisors who already have international clients.

“We’re always looking for individuals,” Taylor says, “who [have] a cultural affinity with the markets we’re covering, have strong language skills, excellent academic background and want to work under the IIROC platform in Toronto.”

These international advisors’ books of business tend to be slightly larger than those of their domestic counterparts. The average book for a DS advisor on the Canadian platform is approximately $146 million in assets under management, while the average book on the international platform is $200 million-$250 million.

Annual production levels for these international advisors also are much higher. For example, Scotiabank advisors in the international advisory platform produce $1 million a year on average.

“In our group,” Vianna says, “we don’t see production levels of $300,000 or $400,000. In Canada, advisors can be limited to a specific region where the demographics and pool of the clients are specific to that area. But [in the international group], we have an entire country to cover – and we are generally looking at [only] the high net-worth individuals.”

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