If you run a small or mid-sized independent investment firm in Ontario or Quebec, don’t be surprised if Daniel Thompson, MacDougall MacDougall & MacTier Inc.’s new president and CEO, pays you a friendly visit.

Given increased costs in the investment industry, there is greater value in economies of scale, says Thompson, who joined the venerable 161-year-old Montreal institution last June: “Compliance has just gotten more and more expensive and complex, and you just can’t run an investment-management firm or full-service brokerage on a shoestring anymore. You need a certain critical mass.”

The firm, known widely as 3Macs, has about $5 billion in assets under administration, and Thompson reckons if a firm is below the $5 billion mark in AUA these days, it’s probably too small: “We’re really in that sweet spot, in which we’re not small but we’re not big, either. You don’t have to be big, but bigger when you’re in the middle of the pack is better.”

To ensure the independent firm maintains its independence, it is now exploring mergers or partnerships, he says: “It’s not an acquisition mentality. We’re not out there with a shopping list trying to buy people out. It’s a very friendly, low-key pitch I’m making when I’m talking to other firms of similar size. If there are synergies where we can get together to the benefit of both, we should explore them.”

Thompson notes there aren’t many independent firms left in Canada, as they’ve either been acquired or have disappeared; he adds that it makes sense for those that remain to stick together: “This industry is very much dominated by the large, bank-owned firms. As independents, we need to organize ourselves more closely, not only to ensure our survival but to ensure our prosperity.”

Thompson has a long history at independents. He arrived at 3Macs after 14 years at the helm of Montreal-based GBC Asset Management Inc., the private-client division of Pembroke Management Ltd., also of Montreal. It was time for a fresh challenge, and after a friend and client who’s a headhunter gave Thompson a call about the 3Macs position, he decided to make the move.

Traditionally, 3Macs presidents and CEOs have not only run the firm but have also run their own books of business. However, the firm decided the days of CEOs wearing two hats had come to an end and that it was time to bring in someone who would focus exclusively on medium- and long-term management and strategy. Enter Thompson.

With about 200 employees in Montreal, Toronto, Quebec City, London, Ont., and Kingston, Ont., 3Macs is about 10 times larger than Thompson’s old firm, but it faces similar challenges and issues — so the new job hasn’t been much of a culture shock. Not only that, but, given the relatively small size of Montreal’s investment community, Thompson already knew most of 3Macs’ players.

Like much of the financial services industry, 3Macs was hit hard by the recent recession, but it has bounced back to pretty much the level at which it was before the crisis began in 2008, with staffing levels at their pre-crash high. “We cut costs in a very logical and moderate fashion,” Thompson says.

Still, although the financial services industry is emerging from the crisis, it continues to look for ways to be wiser and better, he says. Every firm is re-examining its business model after the old one witnessed a perfect storm in the financial markets, with trading volumes off significantly, fees way down and revenue pictures changed dramatically. Explains Thompson: “You cut costs. You re-examine the business model, and ask, ‘How can we build a stronger, more viable, weather-proof firm? Is the business model still appropriate? Do we have the right growth strategy in place?’ Every single firm went through that.”

Post-crisis, 3Macs is in a much more solid position than many of its competitors, Thompson maintains. That’s because the firm has a tradition of not only managing clients’ money very conservatively but of operating its own affairs conservatively. “We are not fans of risking our own capital,” he says. “We like to remain overcapitalized. We don’t participate in initial public offerings or in underwriting. It’s a very straightforward and conservative investment model.”

Thompson believes that there has been a fundamental shift in investor psychology that will probably take years, if not a generation, to change. Although it’s often said investors have terrible short-term memories, Thompson doesn’t think that notion is true this time around. “I think that what happened in 2008-09 really put the fear of God in a lot of investors. I think people are going to be wary, cautious for a long time, in terms of how they manage their investment portfolio. The appetite for risk will be much less than it has been.”