Two Ottawa locations listed on the wealth management firm’s website are potentially in jeopardy after Canaccord announced it would close 16 underperforming branches across the country, or 50 per cent of its total offices.
One location, at 1525 Carling Ave., refused to comment when contacted by OBJ. Its company directory listed eight names. Officials at the second Ottawa office, at 2 Gurdwara Rd., near Hunt Club Road and Prince of Wales Drive, were not immediately available for comment.
A company official, who spoke to OBJ under the condition of anonymity because they are not authorized to speak to the media, said they expect the company will retain an Ottawa presence.
The 16 branches to be cut have already been selected, according to media spokesperson Scott Davidson, but the locations will not be made public.
Restructuring and operational costs associated with changes implemented in Canada and the U.S. are expected to total approximately $4.4 million, and will be recorded as an expense in the company’s second fiscal quarter of 2013, which ends Sept. 30, according to the year’s first quarterly report.
Although a total head count from Ottawa was not provided, the company has 2,368 employees across the country, according to the first quarterly report for fiscal 2013. This number is down from the 2,426 employees recorded in its 2012 annual report.
At the end of its most recent quarter ending June 30, Canaccord removed approximately 60 full-time and contract positions, eliminating $4.3 million of annualized costs from the business. It also restructured its Montreal office, eliminating 16 positions and reducing costs by $1.2 million annually.
This restructuring is separate from and in addition to the downsizing announced Monday.
Although 16 offices will be closed, those branches accounted for only 16 per cent of the $13.1 billion in client assets administered by Canaccord’s Canadian wealth management division, according to a company release.
The company, which has its corporate head office in Vancouver but announced the downsizing from Toronto, will record $11.5 million of charges in its fiscal second quarter report, reflecting the cost of severance and office closures.
Canaccord says it will have 180 investment advisory teams across Canada after the downsizing but it didn't disclose how many people it will employ.
"This initiative will allow us to make additional investments in markets where we see the most opportunity for future growth," John Rothwell, president of Canaccord Wealth Management (Canada), said in the announcement.
"We can better cater to the needs of our clients through an elite team of investment advisors who have demonstrated their abilities to generate meaningful value for our clients, foster long-term client relationships and an enhanced client experience."
In the first quarter of fiscal 2013, ended June 30, Canaccord recorded a net loss of $20.6 million, or 24 cents per common share. Excluding significant items, it had an adjusted net loss of $16.3 million, or 20 cents per common share.
Canaccord simultaneously announced Monday it has agreed to acquire the wealth management business of a U.K. company, pending approvals.
The acquisition of Collins Stewart Wealth Management will also result in restructuring and other charges in the third quarter, estimated at $5.2 million.
-With files from Canadian Press
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