Julie Gallagher says she believes advisor incorporation will be an attractive option for many advisors at Richardson Wealth. (Fred Lum/The Globe and Mail)Fred Lum/The Globe and Mail
The new head of Richardson Wealth Ltd. says it’s crucial for regulatory proposals that would allow investment advisors to incorporate, as mutual fund advisors already can, to move forward.
Incorporation would allow investment advisors to realize tax savings that they can then reinvest into their businesses, whether it’s digital tools or additional staff, says Julie Gallagher, who was appointed president and chief executive officer of Richardson Wealth last month.
Regulatory changes to harmonize compensation models would also allow mutual fund advisors who are already incorporated to transition to investment advisors more easily and would attract more Canadians into the business overall, she says.
“We are all under the same regulator now,” says Ms. Gallagher, who says she’s long been a vocal advocate for “levelling the playing field” between investment and mutual fund advisors on incorporation. “[It] is key for access to advice.”
The Canadian Investment Regulatory Organization, which oversees both investment and mutual fund dealers and advisors, announced last fall that it was working on rule changes toward the potential adoption of an incorporated advisor compensation model.
In a response sent by e-mail to questions from The Globe and Mail, CIRO senior corporate communications and public affairs specialist Ariel Visconti said the regulator was still working on finalizing proposed rule amendments to allow advisor incorporation, but couldn’t provide a timeline for when those would be published.
Under current regulations, investment advisors can only be compensated directly, either as employees or individual agents, not indirectly via a corporation.
Advisors who incorporate could benefit from the relatively low small business corporate tax rate on the compensation they earn, among other tax benefits.
On the other hand, there are compliance costs associated with establishing and maintaining a private corporation, which means incorporation might not be appropriate for every advisor.
Ms. Gallagher says she believes advisor incorporation will be an attractive option for many advisors at Richardson Wealth, who are entrepreneurial, serve wealthy clients and run businesses large enough to consider incorporating.
She says her firm will be ready to help its advisors who want to incorporate, should the regulator proceed with the change.
“It is crucial we have that path where they can continue to run their book of business as a small business and to have that luxury and latitude to continue to grow,” she says.
iA Financial Corp. Inc., which bought Richardson Wealth last year, named Ms. Gallagher as head of the brokerage on March 10. Previously, she had been the company’s senior vice-president and head, investment products, solutions and capital markets for its wealth management division. In 2021, she joined the firm as chief compliance officer at iA Private Wealth Inc.
Ms. Gallagher says she’s spending the first few months in the new role connecting with the firm’s advisors. She’s already travelled to Calgary, Edmonton and Winnipeg branches to meet with advisors and spoken with advisors on calls.
Ms. Gallagher intends to divide her time between Toronto and Montreal, where she is based, and undertake twice-a-year coast-to-coast branch visits.
“For me, it’s really important to be close to the field,” she says.
Ms. Gallagher says she’s reassured Richardson Wealth advisors there will be no major changes to the firm’s strategic plan of driving organic growth and boosting recruitment.
She says she’s also committed to maintaining and fostering the independent, entrepreneurial culture at Richardson Wealth by listening and responding to advisor comments and concerns.
“Each investor is unique, and our advisors have developed their practices in a way that they know how to serve those clients best,” she says.
A major project for the firm this year remains deciding on a new name and brand. iA Financial agreed to change the name of the brokerage as a condition of its deal to acquire it.
Ms. Gallagher says Richardson Wealth worked with its advisor council earlier this year to canvass advisor suggestions about the new brand and began working with “a couple of ideas and names” with a third-party company that’s helping Richardson Wealth with the project.
She says Richardson Wealth hopes to share a new firm name with its advisors over the coming weeks.
However, Ms. Gallagher couldn’t provide a timeline for the public rollout of the new branding.
“Picking a name is not just the only thing we’re working on,” she says. “It’s also about the tagline, the story, and that’s also work that is progressing.”