3Macs deal reflects the times

billion asset platform is almost the same,” said Price.

That search ended this week when Raymond James Ltd. agreed to buy the firm. But the 3Macs name will live on: it will now be identified as a division of Raymond James, a U.S.-based firm that has been in Canada for more than 15 years.

The buyer was selected after a competitive process in which a number of potential acquirers pressed their case. When combined — the process will take three to four months — the new firm will oversee $33 billion of client assets.

“It is an excellent cultural fit. It maintains our independence on a larger and stronger platform. Their roots are in the private client business as well,” added Price. (The U.S. parent of Raymond James Ltd. is home to about 6,700 advisers; the local unit employs about 370 advisers.) But given that all the 3Macs employees will be staying on, more than financial considerations were involved.

The acquisition made sense for Raymond James for three key reasons: culturally it is a “good f i t ,” strategically it works because it helps the company establish a meaningful presence in Quebec; and because the economics work, meaning that in time, it will be a good investment.

The sale to Raymond James comes at a time when the bank-owned dealers are going through a rethink of their retail brokerage networks — a move that probably precluded them from emerging as the winning bidder.

The rethink, all part of a plan to generate higher profits from the business, focuses on three elements: a move to a higher percentage of fee-based revenue; a move to reduce the compensation paid to advisers and a plan to have more advisers working in the branches where they will receive a salary and a bonus.

Given that one well-established brokerage network has been sold, who’s next? The talk, naturally, turns to Richardson GMP, which has about $27 billion in assets under management, and Canaccord Genuity, whose units in Canada, U.K. Europe and Australia have $34.4 billion of assets under management.