Canada Life has acquired fellow Power Corp. subsidiary Investment Planning Counsel from IGM Financial for $575 million.
While IPC’s leadership team, employees and 650 advisors will remain on their existing platforms and continue to operate independently, Canada Life said it eventually plans to build a single wealth platform for all its advisors.
Paul Mahon, president and CEO, Great-West Lifeco and Canada Life, said the acquisition accelerates Canada Life’s movement into “a leadership position in the Canadian independent advisor wealth market.”
During a conference call on Monday, Jeff Macoun, president and chief operating officer of Canada Life, said the deal gives Canada Life “a broader set of solutions that, individually, we don’t have today.”
Canada Life plans to run IPC independently in the “midterm,” Macoun said in an interview, but eventually plans to build a “single end-to-end wealth platform.”
“We have been after this asset for a long time,” he said.
He described Canada Life as working in an independent space and having to earn its business. That would suit IPC, which operates as an independent operator, he said.
IPC had $30.6 billion in assets under advisement as of Feb. 28.
Following the transaction, Canada Life will have $85 billion in assets under administration and relationships with more than 4,000 advisors, as well as own a dealer registered under both IIROC and the MFDA. This puts Canada Life among the largest non-bank wealth providers, but it is still smaller than sister company IG Wealth Management, which had $115 billion in assets under advisement as of Feb. 28.
Macoun said Canada Life has a strong position in the mid-market in Canada. By acquiring IPC, the firm can enter “more aggressively” into the high-net-worth space, he said.
The IPC business is profitable and the transaction is “expected to be modestly accretive after two years,” Canada Life said in a release, stating that integration costs would be about $25 million.
Mahon said during the conference call that keeping the IPC platform “separate and distinct” from the Canada life platform will keep integration costs down.
“There is a lot going on in the industry right now with the emergence of the single regulatory body overseeing both MFDA and IIROC dealers and that has to play out,” he said.
Advisors won’t be asked to shift platforms, he said.
“They are going to be able to carry on their businesses, but we will be there with capital to enable them,” Mahon said.
IGM Financial also announced today that it had acquired a 20.5% equity stake in Rockefeller Capital Management, a U.S. independent financial services firm founded by John D. Rockefeller that serves ultra-high-net-worth families. The stake, which cost US$622 million, is IGM’s entry into the U.S. market and makes IGM Rockefeller’s second-largest shareholder.
Power Corp. owns 100% of Power Financial, which owns 66.6% of Canada Life’s parent company, Great-West Lifeco, and 62.2% of IGM Financial.
Both the IPC and Rockefeller deals are expected to close at the end of 2023, pending regulatory approval.