Canada’s independent advisory sector is at a pivotal moment. Institutional capital interest is increasing, entrepreneurial advisors are seeking new models, and clients are more aware of the benefits of fiduciary advice.weiyi zhu/iStockPhoto / Getty Images
The independent wealth management revolution has reshaped the U.S. advisory landscape. Thousands of registered investment advisors (RIAs) now control a growing share of client assets, pulling market share away from large financial institutions and redefining what independence means for advisors and clients alike.
In Canada, the situation is different. Despite a mature wealth management market and increasingly sophisticated investors, fiduciary portfolio management firms registered under provincial securities commissions remain limited in number.
A tale of two markets
In the U.S., the RIA model has become a dominant force. There were 15,870 RIAs registered with the Securities and Exchange Commission managing US$144.6-trillion in client assets in 2024, according to the Investment Adviser Association’s industry snapshot report. The model has scaled because it delivers two things investors value: independence and fiduciary alignment.
Canada’s registered portfolio management firms have not experienced similar growth. The Portfolio Management Association of Canada reports approximately 300 member firms managing about $3.6-trillion in assets. However, this figure includes subsidiaries of major banks, which inflates the size of the independent market.
National Bank Independent Network, which serves independent firms, reports about $380-billion in assets under administration. This suggests the independent discretionary market is between $400 billion and $500 billion, representing only 5 to 8 per cent of Canada’s total wealth management industry. In the U.S., independent RIAs oversee more than one-third of all advisor-managed assets.
Why Canada’s market looks different
This divergence is not because of investor demand exclusively. Structural and cultural factors have also slowed the growth of independent firms in Canada.
For one, Canadians show strong loyalty to the Big Six banks. Decades of stability have built trust in these institutions, leading many investors to associate size with safety. This perception makes it challenging for independent firms to attract clients who prioritize security.
Furthermore, the U.S. ecosystem is supported by a robust infrastructure of capital providers and service partners. Platforms such as Focus Financial Partners Inc., Dynasty Financial Partners Inc. and Emigrant Partners LLC have spent years funding, incubating and acquiring RIAs, providing technology, compliance support and growth capital. That flywheel has accelerated the creation of new firms and fuelled industry consolidation.
In Canada, similar infrastructure is limited. New firms have few financing options, as major banks are hesitant to lend to competitors.
In addition, while U.S. regulators approve new RIA registrations within months, Canadian approvals can take a year or longer, which discourages entrepreneurial advisors.
Canada’s regulatory structure also adds complexity. Each province has its own securities commission, resulting in fragmented oversight that increases costs and administrative challenges for new firms.
A path forward
Despite these challenges, there are reasons for optimism. Private equity firms are showing increased interest in the Canadian wealth management space. Independent consolidators are emerging, and institutional investors see the value in fiduciary advice models that prioritize clients.
To enable growth, Canada must address barriers facing independent firms. That includes implementing faster, harmonized registration processes for new firms. Regulators can maintain investor protection while streamlining approvals and reducing duplication across provinces.
Policy-makers should also encourage the Business Development Bank of Canada and Export Development Canada to take a more active role in lending to and investing in portfolio management firms. Expanding access to capital would reduce the cost of starting and growing independent firms, fostering greater competition and innovation.
Technology is also essential. Developing domestic platforms that provide compliance, custody, trading and reporting infrastructure can reduce fixed costs and make independence more attainable.
The industry should also make it easier for clients to transfer their accounts. Although recent rules to improve account portability are positive, further steps are needed to ensure Canadians can move their investment relationships smoothly.
The next five years
Canada’s independent advisory sector is at a pivotal moment. Institutional capital interest is increasing, entrepreneurial advisors are seeking new models, and clients are more aware of the benefits of fiduciary advice.
If regulators, investors and industry leaders collaborate to modernize the independent framework, Canada can develop a vibrant ecosystem of registrant investment-counselling firms. That would provide advisors with true ownership, clients with meaningful choice, and the market with increased competition.
The U.S. has demonstrated what’s possible. It’s time for Canada to develop its own version of the RIA revolution, tailored to the Canadian market but equally ambitious in scale.
Joe Millott is a partner at Fort Capital Partners, an independent investment bank that specializes in wealth and asset management mergers and acquisitions, with offices in Vancouver, Calgary and Toronto.