CI Financial praises rebranded wealth unit while posting Q3 loss

CI Financial praises rebranded wealth unit, eyes additional acquisitions while posting Q3 losses

November 10, 2023 1:08 PM

Following a quarter that saw its stateside wealth arm reborn under a new moniker, Canadian wealth and asset management firm CI Financial turned in earnings with lower total income than it did one year ago.

Still, firm leaders say the decision to keep putting eggs in the U.S. wealth basket now known as Corient is paying off in the form of climbing wealth management assets and a "unified identity."

Now, CI Financial CEO Kurt MacAlpine said the plan is to keep growing by adding new members to the family. It's something that CI Financial, a company that emerged as a top acquirer of RIA practices shortly after its arrival in the U.S. RIA market, knows very well.

"Our U.S. wealth management segment continues to show steady growth in revenues and earnings, reflecting the strength of that business. We continue to make selected acquisitions, adding high-quality businesses while expanding our geographic reach," MacAlpine said in a statement. "The rebranding of CI Private Wealth U.S. to Corient this summer was very well received and was an important step in integrating those operations and positioning Corient for continued growth as one of the largest private wealth firms in the U.S."

Scroll down to see the most important wealth management takeaways from CI Financial's Q3 earnings report. To see previous CI Financial earnings coverage, click here and here.

Note: CI Financial discloses its quarterly returns in Canadian dollars. Unless otherwise mentioned, all figures are in Canadian rather than U.S. dollars.

By the numbers

CI Financial posted total assets of $421 billion in Q3, a year-over-year increase of 22.2%.

Total third-quarter net revenues declined by 20.6% to $616.5 million from $776.1 million in the second quarter. Meanwhile, Q3 net loss attributable to shareholders was $12.4 million compared to net income attributable to shareholders of $51 million in the second quarter of 2023.

Excluding non-operating items, CI's adjusted total net revenues increased 2.3% to $669.6 million, driven by growth in the U.S. wealth management segment due to acquisitions, and the Canadian wealth management segment due to higher average assets.

"Our Canadian asset management business is achieving exceptional investment performance. For the three and five-years ending September 30, 2023, 75% and 80% of assets under management, respectively, delivered above-average results," MacAlpine said in a statement. "This is the best relative performance over these key time periods in the last several years and is a convincing validation of the changes we have made to transform our investment management function into a single, integrated, globally focused team."

Expanding through acquisition

CI Financial's aggressive RIA M&A strategy is the brainchild of MacAlpine, who was hired in 2019 to take CI in a new direction after years of pressure on its core business from the growth of lower-cost investment products.

CI has acquired more than two dozen independent firms since entering the market in early 2020.

It added to that total in Q3 by acquiring Intercontinental Wealth Advisors, an RIA with offices in San Antonio, Texas and Fort Lauderdale, Florida. The transaction, which closed in July 2023, added about $2.3 billion in assets to the Corient business.

In October, CI acquired Windsor Wealth Management, an Indianapolis-based RIA providing comprehensive financial planning and investment management services to high net worth clients. It has approximately $1.9 billion in assets under management.

"Also this month, we completed the acquisition of Coriel Capital of Montreal," MacAlpine said. "Coriel complements our Northwood Family Office and CI Private Wealth businesses, giving us an even stronger presence in the Canadian ultrahigh net worth wealth management sector."

Other notable business moves for Q3 include CI converting client assets at Aligned Capital Partners to the CI Investment Services custody and clearing platform. The conversion increased custody assets at CIIS to $23.4 billion, up from $9.1 billion at the end of Q2.

Explaining the new name

Formerly known as CI Private Wealth, the firm's U.S. wealth unit was rebranded as Corient in August as part of a larger push to appeal to wealthy clients and rally the firms that it has acquired under a unified platform.

The new name is supposed to evoke "client oriented" and "expresses the firm's commitment to providing its clients with an unparalleled wealth management experience," Corient said in a press release.

It also comes from Corient Capital Partners, an RIA based in Newport Beach, California, that serves ultrahigh net worth clients and was purchased by CI last year.