Competition remains fierce for investment advisers in Canada’s gateway to Asia.
While British Columbia is home to about 13% of the country’s population, according to last year’s census, the province is home to nearly 16% of all investment advisers who are registered with the Investment Industry Regulatory Organization of Canada (IIROC) to trade securities.
By comparison, Quebec has nearly a quarter of the country’s population, but only 16% of registered advisers.
The relatively high number of advisers in B.C. is partially because the province has traditionally been home to the highest number of millionaires in the country.
But it’s also projected to be Canada’s fastest growing region for wealthy and high net worth households.
The steady increase expected in baby-boomer entrepreneurs looking to sell their business over the next decade is likely to contribute to the increase in B.C.’s market of affluent households looking for financial and investment advice on wealth and asset management.
Despite the positive long-term trends, the industry has not been immune to the impacts of the global financial crisis and economic uncertainty.
According to IIROC’s 2012 annual report, while the number of registered investment professionals edged up in most provinces (to nearly 29,000), the industry has not recovered to pre-crisis levels when there were nearly 30,600 registered advisers.
The number of companies in Canada has also decreased to 205 today from 212 in 2008 because of greater industry consolidation as firms look to gain economies of scale to improve back-office technology and processes to service clients better.
Nevertheless, the bulk of brokerages in the country remain small and medium-sized from an employee perspective relative to their income.
According to IIROC, more than 80% of the brokerages have fewer than 100 staff even though an equal proportion make more than $1 million in annual revenue. •