Andrew Marsh, who last spring took over the helm of the newly created wealth-management firm Richardson GMP Ltd. of Toronto, has ambitious and enthusiastic plans to add financial advi-sors and expand the firm’s assets. But his ambitions are not so grand that the firm’s culture of entrepreneurship and innovation will be eroded.

Over the next five years, Marsh would like to double the firm’s assets under management to $27 billion from the current $13.5 billion. He would like to see the number of advisor teams reach about 200, compared with the 110 who currently operate in 15 locations across Canada, from Sidney, B.C., to Charlottetown, P.E.I.

“We don’t want to lose the boutique feel of the firm,” says Marsh, Richardson GMP’s CEO. “If a firm gets too big, it becomes bureaucratic. But if we continue to hire the right people, we will achieve our asset targets and preserve the culture.”

Richardson GMP was created in November 2009 when the wealth-management businesses of Toronto-based GMP Private Client LP and Richardson Partners Financial Ltd. were combined. Richardson Partners had a long history as part of a family-owned Winnipeg-based empire established by Canada’s Richardson family as a grain operation in 1857. GMP Private Client began in 2005 as an offshoot of a Bay Street investment dealer, originally called Griffiths McBurney & Partners and later renamed GMP Capital Inc. (GMP Capital retains a significant interest in Richardson GMP.)

Says Marsh: “We are the largest independent wealth-management firm in the country, and the merger allowed us to achieve scale and stability.” Marsh expects the merged firm to break even in the fourth quarter of this year, which is on target for objectives set during the acquisition.

“The challenge with any merger,” Marsh says, “is to ensure that the financial assumptions and better business model that are originally envisioned actually come into being. We wanted larger scale so that greater profitability could be achieved. The cost of running the business with a national footprint is not that different, whether you’re at $13 billion in assets or $25 billion, and we expect the next $12 [billion] to $15 billion in assets will make an even bigger contribution to the bottom line.”

Richardson GMP’s model consists of giving advisors a place to build their own teams and establish their preferred type of practice. The average advisory team has a book of $125 million — the largest in the industry, says Marsh, who is intimately familiar with the job of an advisor, having previously been managing director of national sales on the GMP side, in charge of national recruiting and sales management for six years.@page_break@THE RIGHT FIT

In hiring, the firm focuses on luring top producers with many years of experience, Marsh says, but also looks for the right fit in terms of attitude. Advisors must have a philosophy of putting the client first and being team players with a strong work ethic and partnership mentality. While the firm has been able to recruit five new teams in the past year, representing $500 million in AUM, Marsh says, another five were turned down because the fit wasn’t right. Typically, six to 18 months of formal and informal meetings take place before a commitment is made.

As a non-bank owned firm, Marsh says, a key differentiator at Richardson GMP is that the firm can be more nimble and flexible in supporting its advisors. With a limited number of teams, compared with thousands of advisors at a bank-owned firm, he says, the lines of communication between management and advisors are open and accessible. In addition, advisors own equity in the firm and sit as “owners” on various committees and working groups that have input on the decision-making process. Marsh, having spent 14 of his 21 years in the business as a financial advisor, says he understands how frustrating it can be when head office makes decisions without advisor involvement.

“It’s a culture of ownership and innovation, in which the advisors not only run their own business but contribute to the firm as a whole,” says Marsh, who had worked at Toronto-based ScotiaMcLeod Inc. in positions ranging from assistant financial analyst and investment advisor to co-branch manager prior to joining GMP Private Client. “It’s a collaborative approach, in terms of making decisions and creating new policies. When you’re at a large, bank-owned firm, it tends to be an advisor vs management environment; whereas here, it’s a ‘we’ culture.”

More than 60% of Richardson GMP’s revenue comes from steady and recurring fee income, such as trailer fees or management fees on fee-based accounts. But, Marsh says, some advisors are more transaction-oriented and derive their income from trading commissions on stocks and bonds. It all depends on the needs, desires and goals of the client. Advisors may take advantage of the steady flow of public stock underwritings or private placements generated by GMP Capital, but there is absolutely no obligation to do so. Unlike some competing firms, Richardson GMP also offers alternative investments, including a hedge fund called GMP Diversified Alpha Fund run by the team at Toronto-based affiliate GMP Investment Management LP. Clients also have access to real estate investment vehicles, as well as the opportunity to invest in private equity, through affiliate EdgeStone Capital Partners LP.

There is also comprehensive support for tax and estate planning from the firm’s team of lawyers, accountants, estate planners and insurance specialists. Says Marsh: “A growing number of Canadians are getting to an age at which they want advice on transferring wealth to the next generation. We offer strategies on intergenerational wealth transfer, tax minimization, business succession, wills and philanthropic activities.”

Marsh, who grew up on a cattle and grain farm near London, Ont., likes to play hockey and golf, but spending time with his wife, two sons and daughter is a top priority. One son plays hockey, the other is a snowboarder and his daughter is a drama student, and he enjoys sharing their interests. Says Marsh: “Business can be all-consuming, especially when you’re building something no one else has built before. And what little free time I have, I like to spend with family.” IE