Vancouver-based brokerage Canaccord Capital Inc. is cleaning house and letting go of 75 advisors just months after it announced the completion of its asset-backed commercial paper relief program.

This is the second round of layoffs that Canaccord has implemented during this recession. This past autumn, a firm-wide restructuring plan resulted in the layoffs of about 150 employees, or 10% of its staff globally. In addition, a 10%-20% salary reduction was put in place for senior executives. These initiatives were part of Canaccord’s cost-reduction measures.

This time around, the layoffs were not made in order to save money; rather, they were part of a strategic process that has been put in place to rebuild the firm after the ABCP crisis.

“That has affected the firm in a very meaningful way. Until this ABCP issue was resolved a few weeks ago, I think people thought this could have taken the firm down — and I think they were right,” says John Rothwell, who joined Canaccord on Oct. 30, 2008, as executive vice president and head of private client services.

Rothwell has since announced a number of strategies that are on his agenda; he hopes to re-brand Canaccord into “the best kept secret in the Canadian marketplace.”

He adds: “We are coming out of the closet here in the new fiscal year and going into proactive mode. I would expect that 30% of my time six months from now will be in building mode instead of clean up mode.”

The firm is now home to 352 advisors and Rothwell says he let go 75 low producers. The firm is looking to retain all clients and their assets and will offer exiting advisors the opportunity to take part in the Canaccord Advisor Transition Program, which allows them to sell their books of business to advisors remaining at the firm.

As for recruiting new advisors as part of his business-building strategy, Rothwell has already put the wheels in motion with the hiring of a new recruiter. However, there are still some steps that have to be taken before the firm goes full steam ahead with hiring.

“Right now, we are a freight train out of control, so you can’t just slow it down and refuel it,” he says. “When we are talking to new brokers you have to say, ‘Look, we are not quite ready for you yet, but what we will do is ask you to come be part of rebuilding process.’ So, people will have to have some foresight.”

Although Rothwell says some of the changes are going to incorporate a “tough love” approach, others will be welcomed. He plans to introduce enhanced training programs, appoint a new chair of the advisory council and clean up the firm’s contact management systems.

“We are going to work really hard on the communication with advisors and they will see all the points I’m putting in place and a standard of delivery that they have never seen before,” Rothwell says. “They were so beat up over the last 17 months that they didn’t realize how much capacity that sucked up, how much leadership that sucked up and how much energy people had to devote to that. The way I would describe it is if you have ever been through a merger — or even contemplated a merger: everything goes on hold because you have no capacity to get anything proactive done.”

Within his first month at the firm, Rothwell travelled across the country, visiting all 34 Canaccord’s branches. He heard advisors say that, as a result of the ABCP crisis, they felt their reputation was tarnished and that they were no longer as proud as they once were to work at Canaccord. From there, he hit the ground running to ensure that the firm can rebuild, as well as rebrand, itself as the new Canaccord.

IE