Canada’s private banks generally focus on supplying wealth management services to individuals with at least US$1 million in investable assets. This is lower than the global model of individuals with assets of over US$5 million. Private banking remains a favored segment for large banks looking to expand their offerings in the wealth management sector.
The list below ranks major private banks operating in Canada.
- RBC Wealth Management
- BMO Private Client Group
- Laurentian Bank of Canada Private Banking
- TD Bank Wealth Management
- DundeeWealth Investment Counsel*
- Canadian Western Bank
Consequential Outlook of Wealth Sector of Canada
A combination of changing demographics, new technologies and more rigid regulation are challenging traditional business models. Managing returns and quantifying risk are growing challenges for wealth managers in the aftermath of the financial crisis. Although the Canadian wealth management sector weathered the 2008-2009 global economic crisis relatively well, credibility and transparency challenges remain for Canadian firms.
Bank-owned wealth managers continue to be the major players. In the wake of the 2008 financial crisis, some prominent financial institutions have suffered reputational damage amid investment losses, though this is less relevant to the Canadian experience than it is to the US, for instance.
Large Canadian banks such as RBC, Bank of Nova Scotia, Bank of Montreal and CIBC, dominate the wealth management sector and are looking to expand their offerings in this area to take advantage of a relatively stable segment of the market.
Nonetheless, the need to invest in risk management controls and compliance systems to meet the standards demanded in a heavily regulated domestic marketplace means a greater cost burden for banks. Awareness of problems with costly, complex structured products mean some clients and advisors now feel less confident investing money with private banks.
There is also a sense that in recent years the interests of private banks, particularly those with investment banking or proprietary trading arms, had been misaligned with that of their customers. This has boosted interest in more tailored wealth management services. Particularly among wealthier clients, there is a demand for more service-orientated offerings, allied with greater transparency and easy-to-understand reporting.