The plan is part of a sweeping overhaul to improve shareholder returns
The Bank of Nova Scotia (Scotiabank) has unveiled plans to add 100s of financial advisers as part of a sweeping overhaul led by its new management team in an attempt to improve shareholder returns, as reported in an article by Bloomberg.
According to Jacqui Allard, wealth management head, only 10% of Scotiabank’s retail clients in Canada have invested through its mutual funds. For Tangerine, its digital-banking division, the number is even lower at only 6%.
Allard explained that the reason behind the low numbers is Scotiabank’s lack of financial planners and other investment specialists in its Canadian branches as it does not have nearly the same number as its competitors.
“That’s something we absolutely have to close the gap on,” said Allard.
With Scotiabank’s plan to double the number of its in-branch, as well as mobile advice, advisers, it will be adding around 600 people to those teams in the next few years with many roles going to the bank’s existing employees.
Recently, Scotiabank revealed an update to its strategy that will focus on growth in higher-return businesses in North America as it will reduce the capital directed to its operations in Central and South America.
Allard, who was previously part of the Royal Bank of Canada, will be vital in the plan as the Royal Bank garnered $2.4 billion in its global wealth-management business in the fiscal year ending on Oct 31 while Scotiabank only earned $1.44 billion.
The bank’s former CEO, Brian Porter, had tried to solve Scotiabank’s weakness in wealth management through major acquisitions of Jarislowsky Fraser Ltd. and MD Financial Management in 2018.
Scotiabank’s new targets in wealth management include an increase in assets under management by 8% per year in the next five years with a return on equity by 20%. Last year, its return on equity was 14.6%.
