Scotiabank plans robust expansion, adding advisors & boosting investment sales to improve returns, aiming for growth in North America's high-return markets. (Bloomberg)
The Bank of Nova Scotia has outlined ambitious plans to significantly expand its financial advisory services, aiming to enhance the sales of mutual funds and investment products as part of a comprehensive reorganization led by its new management team, all in a bid to improve returns for shareholders.
Jacqui Allard, head of wealth management at Scotiabank, highlighted that roughly 10 percent of the bank's retail clients in Canada currently invest in mutual funds through Scotiabank. However, in the case of clients utilizing the digital banking arm, Tangerine, this percentage drops to six percent. Allard pointed out that one of the reasons for these relatively low figures is the comparatively fewer financial planners and investment specialists available in Scotiabank's Canadian branches compared to rival banks.
During an investor day presentation, Allard emphasized the imperative need to bridge this gap, addressing analysts and shareholders about the crucial focus on increasing the number of in-branch and "mobile advice" advisers. She revealed plans to double these teams by hiring as many as 600 individuals over the span of several years, with a significant portion of these roles being filled by existing employees within Scotiabank.
The bank, ranked as Canada's third-largest by assets, unveiled an updated strategic vision that centers on amplifying growth in higher-return sectors within North America, while concurrently reducing capital allocated to its extensive operations in Central and South America.
Allard, recruited by the new CEO Scott Thomson from Royal Bank of Canada in July, stands as a pivotal figure in executing this strategy. Scotiabank's global wealth-management division garnered $1.44 billion in the fiscal year concluding on Oct. 31, a marked contrast to Royal Bank's $2.4 billion in the same period.
Under the tenure of the previous CEO Brian Porter, Scotiabank endeavored to strengthen its historical vulnerability in wealth management through substantial acquisitions. In 2018, the bank acquired money-management firms Jarislowsky Fraser Ltd. and MD Financial Management, and it also owns the Dynamic line of mutual funds.
Scotiabank's new targets for wealth management include an ambitious goal of increasing assets under management by 8 percent annually over the next five years, aiming for a return on equity of approximately 20 percent. Notably, the unit posted a return on equity of 14.6 percent in the preceding year.
