RF Capital reports net loss, record AUA in first full quarter after consolidation

RF Capital had a $2.9-million net loss, an adjusted net loss of $1.6 million and $8.8 million of revenue in the first quarter of 2020.

This marks the first time RF Capital has consolidated Richardson Wealth’s results for a full reporting period.

Richardson Wealth’s revenue was up 15% year over year, to $80.6 million from $70.2 million. Its net loss was $646,000, compared with a net profit of $1.5 million in the first quarter of 2020.

Richardson Wealth is one of Canada’s largest independent wealth management firms. The firm recently rejected takeover bids from rival independent Canaccord Genuity Group Inc.

Richardson’s assets under administration were at an all-time high of $32.8 billion on March 31, up 29% from a year earlier. Contributing to those gains were $4.8 billion in net new and recruited assets since closing the deal in October, the firm said.

Quarterly fee income of $57.6 million set a record, up 8% from a year ago, and the firm said many advisors achieved personal bests.

RF Capital’s transformation was a long and occasionally fraught process, with pressure from shareholders and former executives late in the process leading to revised transaction terms.

The shakeup has continued since the deal closed in October, with longtime president and CEO Andrew Marsh stepping down earlier this year and the firm adding other senior executives.

In its earnings release Monday, RF Capital said it hired a global consulting firm to develop a growth strategy for the consolidated firm. That strategy will be revealed at the firm’s virtual AGM on May 26.

“The toughest part of our journey is behind us,” RF Capital president and CEO Kish Kapoor said in a statement. “More than ever, we are convinced that our carefully mapped-out growth strategy is the best path forward to meaningful long-term shareholder value creation.”