Dave Velanoff, President and CEO of Winnipeg-based Rice Financial Group Inc., has had a busy summer. Since joining the firm in July 2007, Velanoff has completed a number of acquisitions that will see the firm finally reach its goal of expanding across the country.

“We want to expand in every province, and we have several acquisitions on the table,” Velanoff says. “It is a matter of a combination of time and capital. So, we are going to pick the ones that we can handle in a timely fashion and that are within our capital budget.”

Velanoff, former vice president of strategic initiatives for DundeeWealth Inc., replaced former RFG president and CEO Malcolm Anderson, who retired in July.

RFG has two main strategic growth targets: acquisitions of independent advisory businesses and expanding its corporate-owned branches from 14 to 50 within five years. Velanoff has also been working to launch a new structure for advisory offices.

“We are building our company around a structure known as the ‘CEO model’,” Velanoff says. “The CEO model transforms our corporate-owned offices and independent acquisitions into salaried-employee team environments that can provide a much broader array of services and support to clients.”

As the financial services industry grows more complex, Velanoff says, it is becoming increasingly difficult for a single advisor to handle every client’s needs.

Markham, Ont.-based Harry James Financial Services Ltd., which RFG acquired earlier this year, has been using this model with success for more than 15 years.

That acquisition reunited Velanoff with Harry James, whom he had known for more than 20 years. Velanoff and James co-developed the CEO model idea together some 15 years ago. Until now, only James was able to implement the model because he ran his own firm. Joining RFG gives Velanoff the opportunity to grow RFG as a CEO model-based company, as well.

When Velanoff started at RFG, he had ideas about where he wanted to take the firm. He instantly started working on the introduction of the CEO model as well as on a growth strategy.

“I wanted to have the opportunity to be with a company that would allow me to have more influence over the direction,” Velanoff says. “Being able to move forward with the CEO model was very exciting to me because I do believe it is the future of the industry.”

Velanoff is hearing from his independent outlets that they, too, are interested in taking the CEO-model team approach. RFG’s “strategic learning centre,” the firm’s training department, has developed programs that train advisors in how to make the transition to the CEO-model business structure.

Over the past year, RFG management has been working on aligning everyone for the change; and with 180 advisors and $4 billion in assets under administration, such a process is not going to happen overnight.

“You are not going to hit a home run with all advisors because they all have their different ways of operating,” Velanoff says. “But for the most part, the advisors are buying in and have been very supportive of where we are going, which has really made the job easier.”

The concept consists of building a business that can run itself and involves converting the advi-sors in the corporate-owned offices to a salary-based compensation structure.

Staff at each corporate-owned office is trained by the strategic learning centre to become a team of experts who can provide clients with a full range of services. Clients will be able to access experts in tax planning, estate planning, financial planning, investment management and mortgages, as well as expertise in stocks and bonds through Toronto-based MGI Securities Inc., RFG’s sister company.

“The idea of the model is to have the client doing business with a team of highly qualified experts instead of dealing with just one advisor,” says Velanoff. “The team will be salaried, so there will not be any conflict among advisors and all clients’ needs will be met.”

But not every advisor is convinced of the need to change and some are still hesitant to convert to a salary-based model. Velanoff understands, saying such fundamental changes take time, which is why the firm has decided to spread the period of transition over five years.

“People have to want to go onto salary, and there are advisors who aren’t ready for that,” Velanoff says. “We don’t’ want to force it down anyone’s throat, so they will stay on commission until we phase it out.”

@page_break@Velanoff is quick to point out that the CEO model is not the only model under which the firm will operate. RFG will continue to recruit and build the independent model, he says, in which advisors receive a competitive commission but must cover all overhead costs on their own. The firm does not interfere with how these advisors run their businesses as long as they are compliant with industry regulations.

In many cases, Velanoff says, the independents will serve as “inventory” for future acquisitions if they are interested in selling their businesses or retiring. “What we are giving the independents is a publicly traded company that will buy their business some day.”

RFG had been growing slowly since being acquired in 2003 by Jovian Capital Corp., which wanted RFG to become a national firm. In 2005, RFG moved into British Columbia with the purchase of Ascot Financial Services Ltd. A year later, it expanded into the life insurance industry, as well as into Ontario, Manitoba and Saskatchewan with the purchase of Victoria-based Sawyer & Sawyer Ltd.

That same year, RFG purchased Alberta-based Kemp Consulting Ltd., an employee-benefits company; and Winnipeg-based CINUP, RFG’s group benefits division, formed a partnership with AFN Insurance Brokers Inc. to serve the specific needs of First Nations clients.

Under Velanoff, growth has accelerated. This past summer, RFG acquired a portion of the assets of Waterloo, Ont.-based Farm Mutual Financial Services Inc. — giving RFG more than 30 advisors with $300 million in client AUA. That acquisition, along with the opening of corporate offices in Barrie, Ont., and Parry Sound, Ont., has helped the firm continue its expansion into Ontario, Velanoff’s home province, in which he has been aggressively working to build a bigger footprint.

“With 12 million inhabitants — compared with one million in Manitoba — Ontario should be our largest presence,” he says.

In July, RFG signed an agreement with Manitoba-based First Nations Financial Services Inc. to provide sales and service of group benefits and insurance products jointly to First Nations and non-First Nations groups. RFG is also in the process of starting up independent branches in Atlantic Canada, where the firm has until now had no presence but is anxious to get a foothold.

For now, Velanoff hopes to install video-conferencing capabilities in all the corporate offices and build more CEO model offices, which can also work as training facilities. Currently, the Harry James Office in Markham is the only location in which CEO model training takes place. The firm will continue to recruit on both the corporate office side and among independent advisors.

And while RFG may have lost some people along the way, Velanoff says, it definitely has momentum on its side and has outweighed its losses in recruitments.

“When I took over [RFG], it was a bit of a fixer-upper,” Velanoff says. “There are still issues that we are working on, but we needed to build a strong vision and provide direction and deliver our promises. That is what we have done. I didn’t come in here with rose-coloured glasses. I knew it would be a challenge, but we are getting there.” IE