The acquisition is expected to add approximately C$1.5bn (£910m, $1.13bn, €1.03bn) to Canaccord Genuity Wealth Management’s total client assets.

The transaction is expected to close within the next three months and is subject to a number of closing conditions, including regulatory approval.

Upon completion of the deal, current clients of Mercer Private Wealth will have access to the full range of Canaccord Genuity Wealth Management services.

Stuart Raftus, president of wealth management in Canada at Canaccord Genuity Group, said: “Canaccord Genuity Wealth Management and Mercer’s Canadian Private Wealth business are committed to providing clients with optimal outcomes and experiences. We look forward to making a positive impact for our new clients, partners, and employees in the coming months and years.”

Management buyout

This deal comes several weeks after Canaccord Genuity Group’s senior management team launched a C$1.1bn buyout for the Canadian financial services firm.

The takeover group, headed by chief executive and president Daniel Daviau, includes chair David Kassie and all members of the firm’s global operating committee.

Collectively, the group owns 21.3% of the firm’s common shares. They are offering C$11.25 (£6.90) per share, which represents a 30.7% premium to the closing share price on 6 January 2023.

If the buyout succeeds, the group plans to take the firm private.

Canaccord’s largest shareholder, which owns 10.7% of shares, is said to be “supportive of the proposed offer”.

UK activity

The firm’s UK wealth arm has been active with M&A deals over the last few years.

But the most recent deal made by the business was the acquisition of financial planning firm Punter Southall Wealth and DFM business Psigma from Punter Southall Group for £164m (£202m, €186m) in December 2021.

The asset manager surveyed 125 wealth managers in 26 countries across six regions and found an overwhelming majority (86%) said the main reason for investing in private markets and other illiquid asset classes is because of better yields or enhanced investment returns.

Yet, the survey also found that there are barriers to investing in alternative and other illiquid assets. It showed that 71% of wealth managers were concerned with lock-up periods, while 59% said they did not have the necessary resources to perform the required due diligence before investing.

Just 21% said their clients thought fees were too high for these types of investment funds and strategies.

Additionally, the survey found 82% of wealth managers noted a significant uptick in demand for ESG investments over the past year.

For 64% of those surveyed, clients are choosing ESG in response to changing societal sentiment toward climate change, social issues and corporate governance, while 46% said their clients are also seeking to minimise reputational risk.

Outsourcing

Elsewhere in the survey, when asked to select their top two business priorities over the next two years, “improving the client experience” was the number one priority (76%).

To help them do so, there is clear intention to outsource/seek assistance across certain elements, including portfolio construction (14%), portfolio operations (14%) and portfolio governance (17%).

Some 60% of respondents already work with third parties on investment research, with an additional 36% supported on manager selection, and 30% on outsourcing reporting requirements.

Around 42% said they would be seeking additional third-party support around ESG investment offerings and integration.

‘Embracing’ alternatives

Amit Popat, partner at Mercer, said: “It is encouraging to see the majority of wealth managers embracing and investing in illiquid and other alternative asset classes, citing yield and return potential.

“With traditional asset classes unlikely to generate the same level of returns in the next few years as they did in the past, it is critical that wealth managers’ client portfolios are positioned to seize the widest range of investment opportunities.

“Operationally, accessing this wide spectrum of investments may not be straight-forward for even the largest wealth managers. As a result, many have or are considering working with independent third-party firms that provide specialised services to meet their specific needs.

“This is particularly important regarding access to global managers, best-in-class research, operational due diligence and implementation services because these services are central in achieving their own clients’ objectives.”

Romi Savova said in the letter to the DWP on 19 May 2022, that the firms reportedly blocking and delaying pension transfers are:

• Mercer;
• Railpen;
• First Actuarial;
• HS Pensions / Salvus Master Trust;
• Cushon;
• The Workers Pension Trust; and
• XPS Pensions.

She said: “The recent pension scams legislation created by your department was a welcome intervention in a pensions industry long plagued by the economic scourge of investment scammers.

“However, contrary to the efforts, great dedication and intention of your civil servants in making the pensions industry safer and more efficient for savers, we have found that the regulations are being abused by a handful of rogue actors intent on using these new regulations to block and delay consumers from moving their own pensions.

“Specifically, we have evidence of providers delaying and blocking transfers on the basis that any and all ‘incentives’ raise a ‘red flag’ under The Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021.

“Under this highly inventive interpretation of an ‘incentive’, the relevant parties can deem that anything could be an incentive and therefore anything can create a red flag; from having an app and low fees to excellent customer service, in fact any positive feature can be construed as an ‘incentive’ for someone to transfer away from legacy pension scheme administrators who struggle to provide a high level of customer service.”

Savova added the firm has “seen specific evidence” of its £50 ($60, €58) refer-a-friend scheme being interpreted as an ‘incentive’ that “supposedly warrants a transfer delay and/or a red flag”.

“We would urge you to clarify your position and issue immediate guidance to the legislation on this point, so it is not further abused,” she said.

This comes a week after XPS Pensions Group found that 83% of pension transfers reviewed in May raised one or more red flags – rates have risen for the last five consecutive months.

DWP

In a bid to tackle pension transfer scams, the DWP brought in stricter laws on 30 November 2021.

The rules allowed pension companies to prevent a transfer if suspicious activity is detected.

The traffic light-style system allows providers to stop transfers altogether (red light), or pause it for further scrutiny (amber light) where savers will need to seek guidance from Pension Wise before going ahead.

In a response to PensionBee, Guy Opperman, minister for pensions and financial inclusion, said in a letter on 26 May 2022: “I agree the red flag relating to incentives was not intended to impact on standard business practices, but rather to capture the practices used by scammers. You may be aware that my officials have begun gathering data so we can conduct a review of the regulations with the intention to publish a report in the spring of 2023.

“Although the team, as yet, have not picked up on schemes adopting a blanket approach to the red and amber flags, I am concerned that the regulations may being used, by some, in ways we did not intend. That is why my officials are working with the Pensions Regulator to issue a statement reiterating the position we set out in our consultation response, published in November 2021.

“The statement will stress our position that the regulations are designed to maximise ease of interpretation and allow trustees and scheme managers to take a holistic approach when reviewing transfers. We will also be clear that they draw on the ability of trustees and scheme managers to rely on information already held, as a result of existing due diligence processes.

“Finally, where the transfer causes no concern, which should be the vast majority of cases, the trustee or scheme manager should proceed with no further action required.”

International Adviser contacted the DWP for further comment and a spokesperson said: “Our new transfer regulations are helping protect people from fraudsters trying to trick them into moving their pension pots into scam accounts. This should have no impact on the process for transfers that, prior to the introduction of the regulations, would have caused no concern.”

Response from pension firms

Several of the accused firms hit back at the accusations by PensionBee.

The Workers Pensions Trust said in a statement: “You may have seen references in the press to comments that Workers Pension Trust is trying to prevent members moving their pensions savings. This is not true.

“The trustees are required to process transfers in accordance with legislation to ensure that members are protected when transferring their pensions savings to new arrangements. Recent changes to the law mean we need to check a few additional points in some circumstances before you can transfer your money.”

A spokesperson for the trustees of the Cushon Master Trust said: “Our legal advisers have instructed us that PensionBee’s ‘refer a friend’ scheme constitutes an incentive which means that we cannot permit a statutory transfer.

“Under our scheme deeds and rules, we are able to allow non-statutory transfers, but in these instances the trustees are required to apply more stringent checks and follow more robust processes to ensure members’ interests are protected. The trustees have also written to the minister of pensions and financial inclusion to request clarification on the regulations in light of the legal advice we have received. We are awaiting a response.”

A spokesperson from Railpen added: “In November, following the introduction of new regulations, Railpen adapted its approach to member transfer requests. Our new approach ensures we are acting in accordance with regulations whilst providing greater protection for members. It includes additional steps to ensure members are aware of the risks of transferring and checklists to help us identify any flags which might cause concerns over scams.”

David Watkins, managing director at XPS Administration, said: “I can unequivocally confirm that XPS Pensions Group is not hiding behind regulations to unnecessarily delay transfers.

“The regulations which came into force last year are about protecting members from the ever-increasing prevalence of scams. While they are a solid foundation, there is widespread recognition amongst the industry that they are not perfect and that there are some issues still to be resolved. We are actively working with government and industry partners to seek a change in the regulations that would make routine transfers operate more smoothly.

“Until those amendments are made, we will continue to abide by the regulations as they are written, taking into account legal advice we have received on how we approach transfers. XPS Pensions Group will always prioritise the safeguarding of members’ savings over commercial considerations.”

IA has contacted Mercer, First Actuarial and HS Pensions for a comment – but they did not respond in time for a comment.

Working with PensionBee

One firm which was accused in a media report of delaying transfers of PensionBee customers was the People’s Pension, which is part of B&CE.

A B&CE spokesperson said: “Our lawyers have instructed that some of PensionBee’s marketing initiatives fall outside of the new regulations. The regulations broad reference to ‘incentives’ means that any transfer which has been incentivised cannot proceed as a statutory transfer.

“We believe we are one of a number of providers to receive advice similar to this, and while we appreciate that the legislation may not match the policy intent, our Trustee must apply the law as it stands.

“We have been in contact with PensionBee to find a way forward in the best interest of our members who wish to transfer, and we have taken a number of steps to explore alternatives. The additional checks we are having to undertake in no way prevent our members from transferring their funds.”

Advance is a multi-manager investment business providing specialist funds management services and products.

As of the end of March 2022, Advance had A$43.7bn (£24.6bn, $30.9bn, €28.9bn) funds under management.

Funds merger

In other news, Westpac subsidiary BT Funds Management has agreed to merge its personal and corporate superannuation funds with Mercer Super Trust.

BT has A$37.8bn in funds under administration, as of the end of March 2022, which include the Westpac employee default plan.

Mercer will offer employment to BT staff who look after the funds following the merger.

The deal, however, does not include superannuation funds held on Westpac’s BT Panorama and Asgard platforms.

Westpac simplification

BT Trustee chair Gai McGrath said: “The trustee engaged broadly across the industry and after a robust and competitive process this merger will create a larger superannuation fund with the potential to deliver improved performance, lower fees, and broader member services.

“It also maintains continuity of knowledge and service for BT Super members.”

Westpac specialist businesses chief executive Jason Yetton added: “This is a further step in the simplification of Westpac and supports the group’s focus on banking in Australia and New Zealand. It also provides significant benefits for BT Super members, new opportunities for our people and redefines the landscape of superannuation in Australia.

“Since the formation of Westpac’s specialist businesses division around two years ago we have made significant headway on our portfolio simplification agenda, having announced eight business sales, of which five have now completed.”

Both deals are expected to complete in the first half of 2023.

Mercer Global Advisors

The registered investment adviser (RIA) firm has made two acquisitions in a week.

It has merged with HYA Advisors, a Springfield, Missouri-headquartered wealth firm which serves around 1,000 clients and has approximately $1.2bn (£910m, €1bn) in assets under management and advice (AuMA).

The financial terms of the deal were not disclosed.

Mercer has also bought Sanford Advisory Services for an undisclosed sum.

Sanford is based in Portage, Michigan and has 1,100 clients with around $1.1bn in AuMA.

Cerity Partners

Independent wealth management firm Cerity Partners has merged with Permit Capital Advisors.

Permit caters to ultra-high net worth families and foundations within the Philadelphia region.

The combined firms will operate under the Cerity name and brand.

The financial terms of the deal were not disclosed.

People Moves

Northwestern Mutual

The Milwaukee-based life insurance company has promoted Jeff Sippel to executive vice president and chief information officer.

He joined the firm in 2019 as vice president of client experience to lead the digital and financial planning strategies.

Loomis, Sayles & Co

The investment management firm hired Colleen Denzler as head of ESG, based in Boston.

Most recently, she led the ESG integration process at Smith Capital investors.