Newsmaker: Focusing on the future at CIBC

Scandiffio believes a winning attitude is contagious and, as successes are achieved, the energy and commitment gathers momentum and more people want to be part of that success. Scandiffio, 44, brings this same kind of positive energy to his new job at CIBCAM, a position he took up last April after 20 years at other mainstays of the Canadian financial services scene – Industrial Alliance Insurance and Financial Services Inc. (IA) of Quebec and Toronto-based mutual fund giant Mackenzie Financial Corp.

“You must be vigilant, because the momentum can also go the other way,” he adds. “The key is to get everyone on board, delivering results in their positions.”

Scandiffio describes CIBCAM as a big organization serving a variety of client sectors, including large institutional and retail clients having accounts ranging from high net-worth to those worth less than $100,000.

“We don’t want to lose the small investor, and there is room for us to grow in that area of the market,” Scandiffio says. “Our business has good momentum, with record sales in the second quarter [of 2015].”

Retail clients are served with mutual funds branded under both the CIBC and Renaissance names, as well as various managed pools. Both products are sold through the independent dealer network and Canadian Imperial Bank of Commerce’s vast network of branches. Of CIBCAM’s total AUM, $27 billion is institutional and $85 billion is retail. Although some of these assets are managed by CIBC’s in-house team, a large chunk is managed by subadvisors.

“We have a broad platform, with more than 100 investment mandates across 58 firms,” Scandiffio says. “A few months into the job, I’m trying to get a more granular sense of client needs in the various channels – putting the lens not just on their current needs but on what their needs will be three to five years from now.”

In an environment in which the competition is mostly from the other big banks and investment fund giants, as well as the fast-growing exchange-traded fund industry, Scandiffio says, it’s important to “add alpha on the asset-management side and create value on the advice-giving side. If we’re doing those things, we won’t just survive; we will thrive.”

Although Scandiffio sees fee-based advisors becoming a large percentage of the industry – partially in response to growing fee awareness – he also believes there is a place for fund products sold with commissions or trailer fees, particularly for small investors. He believes that client choice is the best route.

“There is a danger of regulators being too prescriptive and moving toward the banning of embedded commissions,” Scandiffio continues. “You want to be careful that you are not cutting off access to advice for certain segments of the population, particularly small investors. Clients who work with advisors tend to have higher savings levels and higher levels of equities, as well as other asset classes that can lead to better risk-and-return outcomes. Clients with advisors also tend to ‘stay the course’ in difficult times.”

CIBCAM offers various fee structures and products, adapting investment strategies to various investment forms, from mutual funds to large pools in which fees are separated and charged on an individual basis. The latter products’ fees may decline, on a percentage basis, as the value of an account rises: “Clients may have the choice of packages or [prefer] à la carte in putting a diversified mix of asset classes together.”

Scandiffio is examining what institutional investors are doing to enhance performance and minimize risk, and adapting those strategies for retail clients. For example, currency hedging is becoming more popular as clients increase their global diversification on both the fixed-income and equities sides. There also is growing interest in “absolute return” strategies, such as options or short-selling, which can protect or enhance portfolio returns in bear markets. Says Scandiffio: “We’re looking at a variety of institutional strategies and determining whether they can be adapted to other markets.”

Another goal is to leverage technology to understand client needs better. Scandiffio says so-called “robo-advisors” are an “interesting tool for asset allocation” and he foresees that technology being used – either on its own or in combination with advice – for clients with higher net worth. “We need to offer the technology as part of a continuum, on the advice side and the asset-management side,” he says. “The robo-advisor technology can be incorporated across the board for wealth management. As a bank, we have relationships with a lot of Canadians, and [we] leverage those relationships by identifying needs and filling them.”

Scandiffio always has had a competitive streak and likes to win. When he was young, he considered becoming a teacher like his mother, but she encouraged him to look in other areas to channel his drive. He earned a degree in actuarial science and economics at the University of Toronto in 1994, although a large part of his focus at the time was on playing football with the Varsity Blues.

Although he was drafted by the Argos in 1993 and went to training camp, he did not make the team’s final roster.

After graduation, Scandiffio was offered a contract to return to the Argos in 1994, but he decided to enter the financial services sector through Mackenzie Financial, for which he was hired as a temp to help with the extra processing work during the RRSP season. He moved into a full-time job as a customer service representative, later advancing through various product and marketing roles during his 10 years with the company. “The asset-management business seemed more interesting than morbidity statistics,” he says.

In 2003, Scandiffio became president of IA Clarington Investments Inc., the newly formed investment fund subsidiary of IA. IA Clarington grew under his tenure to about $15 billion in mutual fund and private-client AUM. During his last few years with the organization, his role expanded as he moved into senior positions at IA with broader responsibilities for wealth management, as well as for IA’s financial advisory and retail distribution subsidiaries.

Scandiffio was lured to CIBCAM earlier this year after that firm’s top job became available when Steve Geist was promoted to head up the parent bank’s wealth-management business in the U.S. and Canada.

Scandiffio, who is married with three children, is active in his community. He is honorary co-chair of the Princess Margaret Hospital Road Hockey to Conquer Cancer tournament and sits on the board of the Young People’s Theatre.

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