The two executives who were recently appointed to top jobs at Vancouver-based Union Securities Ltd. are hoping that they can put the company’s history of compliance breaches and regulatory mishaps behind them and set the investment dealer on the right track.

In December, Union Securities announced that John MacPhail, its head of capital markets, had been appointed its new CEO, while Arden Cornford, formerly executive vice president of corporate and regulatory affairs, has taken on the role of president. The appointments were a strategic move for the firm, which has been family-run for more than 40 years.

“Our goal is really twofold,” Cornford says, “in that we want, first, to position the business to come through these difficult times, as well as to be in a position to prosper from the opportunities that will come down the road.”

Both MacPhail and Cornford say their appointments were not a direct result of the firm’s earlier compliance problems. In fact, they say, Union Securities has come a long way since three regulatory agencies found that the securities dealer had a number of trading infractions and compliance issues, resulting in $1.8 million in fines and penalties against Norman Thompson Jr., former president and current chairman; John Thompson, former CEO and current vice chairman; and Rex Thompson, executive vice president.

“The key was we stepped up to the plate and acknowledged the issues,” Cornford says. “We sat down with the regulators to see if we could agree on settlements on all outstanding issues, which was something that wasn’t done before.“

Union Securities was also quick to recognize what needed to be put in place, in terms of policy and procedures, Cornford says, as well as establish a level of compliance that indicated it was not only meeting, but exceeding the industry’s requirements. “That was the basis of what has allowed us to continue to prosper,” he adds, “and be confident in our ability going forward.”

In addition to the fines, Union Securities also had agreed that accounting firm Grant Thornton LLP would review Union Securities’ compliance policies and procedures annually for three years. These reviews are coming to an end in April, the third anniversary of reaching the settlements. But, Cornford says, Union Securities will continue to use Grant Thornton in an advisory capacity.

Both MacPhail and Cornford believe Union Securities’ regulatory issues are a thing of the past. And although the firm is no longer being run by the Thompson family, the family will still be actively involved.

“The Thompson family are still active with the board of directors and with the strategic focus of the company,” MacPhail says, “but they realized that it was time to let the family-run business evolve into something bigger.”

The decision to make the appointments, Cornford adds, represents the firm’s natural evolution from a family-run business to one that wants to move into a more formal structure and have continued growth and success.

Founded in 1963 by Norman Thompson Sr., Union Securities was a small family-run firm located solely in Vancouver. Today, it has more than 325 employees, including 180 advisors, with 11 offices spanning the country as well as an additional office in London.

“While the firm may not be staffed entirely by family members, the connection to that legacy and that part of our past is one that we don’t want to lose,” MacPhail says. “Our challenge is to bridge that family-owned structure with something that will allow us to compete head to head with more traditional firms while not losing the ability to stay in touch with every single one of our constituents and employees of the firm.”

MacPhail is no stranger to the family-run business model, as his own father owned a brokerage firm for more than 40 years.

“I pretty much grew up knowing the industry,” he says, “and have worked from [being] the phone boy on the trading floor right up to being a CEO.”

MacPhail started his career as a floor trader on the Vancouver Stock Exchange in 1982 and since then has held a variety of senior positions, including national retail manager and director of Yorkton Securities Inc. and executive vice president and director of Vancouver-based Research Capital Corp. MacPhail joined Union Securities in 2007 as executive vice president and managing director of capital markets, helping to create the capital markets division.

@page_break@Cornford, who joined Union Securities in 2005, is also well known to the firm’s advisors. He says becoming president of the investment dealer was a natural fit for him.

Prior to joining Union Securities, Cornford was president of ADP Investor Communications, vice chairman and CEO of FundSERV Inc., and in corporate administration at Dofasco Inc. (All positions were based in Toronto.) Cornford says all of these jobs provided him with the business experience one needs when deciding to take on the role of president.

“The transition for me was quite simple because I have been here before [when with ADP and FundSERV],” he says. “With my previous experience and business background, it is a natural fit for me.”

Both MacPhail and Cornford say they have received a positive response from Union Securities’ advisors and believe that having familiar faces step in has made the transition that much easier.

MacPhail will continue in his role as managing director of capital markets and add the role of head of the executive committee. That committee consists of Scott Taylor, chief financial officer; Martin Lang, chief compliance officer; and Rob Titerle, chief administrative officer/chief information officer.

The members of the executive committee will continue in their respective roles within the firm while functioning as a team to focus on core lines of business and realize the strategic direction as envisioned by the board of directors.

Already, the committee and the board of directors are developing plans that the committee aims to implement over the coming weeks. New sales campaigns and a broader product range for advisors are on the list, MacPhail says, as well as training around those initiatives so that the firm is sure the new products fit the needs of both advisors and their clients.

As for the future of Union Securities, MacPhail is optimistic that 2009 will be better than 2008. Even though he has stepped into a new role in the midst of a market downturn, the timing doesn’t faze him.

“I’ve been at this for 20-plus years now,” he says. “I think anybody in my chair would say this is certainly about as challenging as it’s been for anybody within the industry. But I think this is behind us, and we will slowly emerge into more buoyant markets. I’m very optimistic for 2009 — and we will build from there.” IE