Hugh Mclelland, president and CEO of Toronto-based Queensbury Group Inc., is driven by the goal of building a firm that’s run by advisors for advisors.
“We are positioned uniquely as the independent alternative firm within the industry,” McLelland says of Queensbury Group, the full-service wealth-management firm he founded in 1988. “Our philosophy dictates that we do not deal in proprietary products. We focus on putting the client’s interests first.”
The firm is structured in a way that gives advisors freedom to manage their books of business without interference or pressure, while giving those advisors the resources to serve the needs of their clients. Advisors also have a voice in the way the firm is run.
Queensbury Group is made up of three separate arms: Queensbury Securities Inc., licensed by the Investment Industry Regulatory Organization of Canada; Queens-bury Strategies Inc., licensed under the Mutual Fund Dealers Association of Canada; and Queensbury Insurance Brokers Inc. Advisors can position their practices within the division of their choice without pressure to be multi-licensed or to obtain specific designations.
Queensbury Group consists of 100 advisors in 16 offices throughout Ontario and six in British Columbia, as well as several advi-sors working from home offices.
The firm’s multi-platform model allows advisors to benefit from the expertise of other advisors in the firm. They can take advantage of the diverse range of specialties that are available in-house. An advisor who is not licensed to sell securities, for example, can build relationships with IIROC-licensed advisors within the firm on a referral basis — without having to worry about clients being poached, McLelland says. And many of the advisors with Queensbury Securities are chartered accountants, who can assist in tax planning for clients.
To further empower advisors, Queensbury Group is 100% owned by active members of the firm, according to McLelland: “If a shareholder retires or leaves the industry, he or she must sell their shares. There have never been any passive shareholders.”
In addition to the opportunity to own company shares, Queensbury Group advisors can become involved with the firm’s management committee — six people drawn from various sectors of the firm. The committee currently includes John Webster, president of Queensbury Securities; Michael Norris, president of Queensbury Strategies; and Doug Vanderburgh, president of Queensbury Insurance.
Rona Birenbaum, a financial planner with Queensbury Strategies, was on the management committee for four of the nine years she has been with the firm. “The management committee allows decisions to be made by fellow advisors,” she says. “It is truly a firm that is run by advisors for advisors.”
Queensbury Securities opened in 1988 when four fee-for-service planners needed a securities-licensed broker to process transactions for their clients. They approached McLelland, a securities dealer, who then formed Queensbury Securities to handle their needs.
“Originally, the purpose of Queensbury was to service the implementation needs of those planners during a time when not everybody in the industry was fully compliant,” says McLelland. At that time, he adds, many planners were trading in securities without holding securities licences. “Queensbury was incorporated to do their implementation work and keep them onside with the regulations.”
Queensbury Strategies, the firm’s MFDA-member mutual fund and insurance arm, opened in 1993 to accommodate advisors who wanted to deal only in mutual funds.
Next, Queensbury Insurance Brokers (originally called Queensbury Surety), was launched in 1994.
It was Queensbury Group’s culture of independence and advisor involvement that attracted Birenbaum to the firm. Having worked at two other securities dealers, she was looking to switch to an MFDA firm.
“I wanted a culture in which I was able to own my own business and have control over my business,” she says. She also wanted to avoid the potential conflict of interest inherent in dealing with proprietary products.
Birenbaum, who manages investible assets for 150 households, joined Queensbury Strategies, hoping the platform would allow her to focus more on managed money and her fee-based financial planning business, Caring for Clients.
“My clients have a very strong relationship with me, not with a firm,” Birenbaum says. “They were very excited about me finding the right home where I could serve them best, and that is how I see the Queensbury environment: it just feels like home.”
That’s just the atmosphere McLelland had been aiming for. “Chemistry is very important in this industry, and it is not a numbers game of how many advi-sors you can hire in a certain time frame,” he says. “It is about hiring the right people and making the right fit for both parties involved.”
@page_break@Queensbury Group has been able to maintain its advisory base at a time when some firms are cutting staff or restructuring. The firm has maintained its compensation structure, which consists of a higher-than-average payout grid that starts at approximately 70% and can go as high as 90%.
“We have not changed our payout since our inception 21 years ago,” McLelland says, “and we are not anxious to ever do that in the future.”
The compensation advisors receive from Queensbury Group is directly linked to their choice of business model.
Advisors can be compensated on a fee-based or on a commissions-based model. Advisors may also choose to charge specific fees for services such as financial planning and income-tax preparation. Queensbury Group does not impose sales production targets on advisors, nor are they given minimum amounts for assets under management.
“This is truly an independent model; an advisor can pay a desk fee for space in Toronto, work from home or open his or her own office,” McLelland says. “We provide support services and software, but we don’t enforce quotas and minimums. The way we see it is: a dollar of revenue is a dollar of revenue, no matter what the source.”
In McLelland’s eyes, Queensbury Group offers the right balance of independence and support. “We go to the wall to help our advisors in any way we can,” he says. “But we don’t tell them how to run their businesses.” IE
Independent model proves successful for Queensbury
Hugh McLelland, chairman and CEO of Queensbury Group Inc., discusses how the firm’s business model has remained successful through the economic downturn. He also describes Queensbury’s support services and the outlook for the firm. He spoke at Queensbury’s head office in Toronto. Click here to watch.