Bank of Nova Scotia is shuffling top executives in retail banking and wealth management and its expanded wealth business, boosted by acquisitions, will be established as a stand-alone division.
The bank’s wealth-management results are currently reported as part of its Canadian banking arm but will formally become a separate business line, known as global wealth management, on Nov. 1. The change comes after Scotiabank spent more than $3.5-billion last year buying a pair of wealth managers that specialize in serving institutional investors and doctors, respectively.
Those deals made Scotiabank the country’s third-largest asset manager and added much-needed capabilities to cater to high-net-worth customers in need of asset management, financial planning, private banking and related services. But other banks have also made moves to get stronger in wealth management, as Toronto-Dominion Bank bought Greystone Asset Management and Royal Bank of Canada partnered with BlackRock Inc. Amid stiffer competition, investors are keen to see evidence that the steep price Scotiabank paid to build up its wealth-management offerings will be worthwhile.
Scotiabank acquired investment firm Jarislowsky Fraser Ltd. for $950-million and spent $2.6-billion to buy MD Financial Management, as part of a string of acquisitions in Canada and abroad that cost $7-billion. The bank is still digesting those deals and Glen Gowland, who was appointed executive vice-president of global wealth management last June, has been in charge of integrating the two companies with the bank.
Mr. Gowland will lead the new wealth-management division, reporting directly to chief executive Brian Porter. “Under Glen’s leadership we have accelerated our wealth strategy and positioned our business for the next phase of growth,” Mr. Porter said in a statement.
The decision to split wealth management off from retail banking also spurred another major personnel change. Canadian banking head James O’Sullivan will leave his role on June 1, but stay on with the bank as an adviser for the rest of this year. Succeeding him as group head of Canadian banking is Dan Rees, who has been in charge of operations at Scotiabank. The streamlined division will now encompass personal and commercial banking, as well as insurance.
In his statement, Mr. Porter praised Mr. Rees for his “proven track record for driving results" and also thanked Mr. O’Sullivan for his “unwavering commitment” to the bank.
Mr. Rees, Mr. Gowland and Mr. O’Sullivan were not available to comment.
The changes are the latest in a series of moves that have reshaped Scotiabank’s executive ranks, installing a new generation of senior leaders. Last November, the bank named Jake Lawrence and James Neate as co-heads of its capital markets arm. The same month, Raj Viswanathan was appointed as chief financial officer, after former head of global banking and markets Dieter Jentsch and former CFO Sean McGuckin both retired.
John Doig moved from the chief marketing officer role to be executive vice-president of retail distribution, overseeing the bank’s branch networks, and Gillian Riley was tapped to lead Tangerine Bank, its low-cost digital banking subsidiary.
Mr. Rees is stepping into one of the bank’s most vital roles as head of Canadian banking and will need to find new ways to increase revenue from Scotiabank’s core retail business. That will likely include efforts to improve the bank’s competitive position in credit cards, but could also mean keeping a tight lid on costs. Mr. Rees has been a central figure in a bank-wide drive to strip out roughly $1.2-billion in annual costs, much of which has been reinvested in digital initiatives.
By making wealth management its own business line, Scotiabank will also give more detailed financial disclosures about the unit, separate from retail and commercial banking results.
“The message from investors is clear that they want to see performance from these acquisitions," said Meny Grauman, an analyst at Cormark Securities Inc. “From an investor’s point of view, I think it’s a positive step to be able to more clearly see and track the performance of the wealth business.”
James Bradshaw