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When iA Financial Corp. Inc. IAG-T announced its plan to acquire RF Capital Group Inc. RCG-T – one of Canada’s largest independent wealth managers, operating as Richardson Wealth Ltd. – attention quickly turned to valuation.
But the $597-million deal, announced in late July, is about more than price. It offers lessons on how wealth management firms are valued today, what it takes to compete for talent, and why strong non-bank players matter to the Canadian market.
Retention payments alter the purchase price significantly
On the surface, some viewed Richardson Wealth’s outcome as modest relative to other recent transactions, but the comparison isn’t straightforward.
Unlike many of its peers, Richardson carried significant financial obligations that weighed down the share price. That drag is crucial to understanding why the numbers differ from those of other recently announced deals.
A further adjustment to the stated purchase price is the potential for significant advisor retention payments. With about $40-billion of assets under administration, a 1-per-cent retention package for advisors adds about $400-million to the effective price. On that basis, Richardson Wealth looks much closer to the Burgundy Asset Management deal recently announced. Burgundy was acquired at roughly 2.3 per cent of assets under management.
In comparison, Richardson’s revised purchase price (including financial obligations and retention payments) equates to about 2.5 per cent, up from an initial 1.5 per cent headline.
Integrated offerings are now table stakes
The bigger message is about where value comes from. A wealth management firm built on investment management alone is unlikely to achieve a premium valuation today.
Bank advisors considering a move want more than a product shelf. They’re seeking a range of integrated solutions, including tax planning, estate and trust services, and insurance. These capabilities are now the entry ticket for firms competing against the banks.
Richardson Wealth was building toward that model, but a heavy debt load limited how far it could go. In fiscal 2024 alone, the firm spent more than $15-million on interest expense and preferred dividend costs. iA’s all-cash structure changes that. By recapitalizing, Richardson Wealth can expand its platform and accelerate what it had only started.
The U.S. market offers a useful parallel. Creative Planning LLC has been one of the fastest-growing wealth advisory firms, compounding assets at about 30 per cent annually. Its competitive advantage is not investment management alone, but a fully integrated platform built on Peter Mallouk’s vision of uniting estate planning, tax and investment management under one roof. That positioning helped secure the rumoured 23-times earnings before interest, taxes, depreciation and amortization multiple TPG paid for a minority stake.
The lesson is clear: Canadian wealth management firms will need to follow the same playbook if they want premium outcomes.
Why competition matters for Canadian investors
The third lesson is about competition. Canadian wealth management has long been led by bank-owned dealers whose reliance on proprietary shelves has drawn criticism for reducing the options available to advisors and clients.
Richardson Wealth and iA both operate with an open product shelf. For entrepreneurial advisors, that independence is critical. For clients, it means access to a broader range of solutions.
Having a strong non-bank competitor is good for the market overall. It forces innovation, creates more options for advisors considering a move and broadens the set of choices available to investors.
Despite being the largest non-bank dealer in Canada, iA estimates an addressable Canadian market of $6.5-trillion, of which the combined iA and Richardson Wealth platform captures only about 3 per cent. That highlights both the scale of opportunity and the progress required to compete with the country’s largest banks.
A step forward for independent financial advice
The iA–Richardson Wealth deal is more than a headline number. It demonstrates that valuations must be judged in full context, that integrated offerings are the only path to premium valuation multiples, and that strong non-bank competitors are essential if Canada’s wealth management industry is to remain innovative, entrepreneurial, and client-focused.
Joe Millott is a partner at Fort Capital Partners, an independent investment bank that specializes in wealth and asset management mergers and acquisitions, with offices in Vancouver, Calgary and Toronto.