January 16, 2013
As brokers struggle, Credential expands
Posted with permission from The Globe and Mail
Wealth management firm hits 'grown up' milestone

As many brokerage firms look to cut back office costs to deal with a tough business environment, Credential Securities is going the other way.

Credential, which provides wealth management services for clients of many Canadian credit unions, has added about 25 people to become a so-called self-clearing securities firm, meaning that it will no longer depend on third parties for services such as clearing, settlement, and record keeping. Moving to self clearing status is usually significant milestone in the growing up of a brokerage business.

Credential has gone from $8.5-billion in assets under administration four years ago to almost $14-billion today, and expects to be $20-billion in three years, said Credential chief executive officer Doce Tomic.

"It is a tough market," he said. "Having said that we've had tremendous growth."

Moving to a self clearing business allows Credential to design its own products more easily, rather than being limited by what its clearing partner could do. (The firm had been using Canaccord to handle clearing tasks.)

"It gives you the control and flexibility to build the programs around your partners and tailor make it," Mr. Tomic said.

He added that his firm's net sales as a percentage of assets hovers at about 8.4 per cent, much higher than the industry average.


(Boyd Erman is a Globe and Mail Capital Markets Reporter & Streetwise Columnist.)


Reprinted from The Globe and Mail, in the "Streetwise" section.

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