Canadian megabank blends units for int'l drive into wealth-service segment. The Royal Bank of Canada (RBC) has created a new global business segment to provide wealth-management products and services "affluent" and high-net-worth clients and commercial family offices.

International economic growth and aging populations are expected to keep pushing up demand for asset-management, brokerage and trust services, making these attractive lines for financial institutions.

Un-lumped

"We believe that global demand for wealth-management products and services will continue to increase as global economies develop and populations mature," says Gordon Nixon, president and CEO of RBC. "RBC is very well positioned to generate high quality revenue and earnings growth from this demand and we intend to grow this segment of our business aggressively over the next several years."

By high-net-worth, RBC means clients with at least $1 million (Canadian) in investable assets. Here "affluent" refers to what's generally designated as "mass affluent" -- clients with at least $250,000 in liquid assets.

George Lewis, formerly head of RBC's Canadian wealth-management business, will lead the bank's international wealth-management efforts. The new unit will combine all or parts of RBC Dominion Securities, Canada's biggest retail brokerage, Minneapolis-based RBC Dain Rauscher, the eighth-biggest retail brokerage in the U.S., RBC Global Private Banking, RBC Asset Management and the bank's trust-service provider.

"The old structure just lumped in a lot of disparate businesses together, so this is a step in the right direction to report the business by type rather than by geography," Ohad Lederer, a financial-service analyst with Toronto-based Veritas Investment Research, told Reuters last week.

RBC's Canadian Wealth Management business line has around $405 billion (U.S.) in client assets under administration, $140 billion in assets under management, and about 3,000 financial advisors.

Toronto-based RBC is Canada's largest bank as measured by total assets and market capitalization. -FWR

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