The Fee-based Summer 2020 Semi-annual Report

Managers Hiring Other Managers: Does the Case for Using External Managers Still Make Sense?

Canada has settled into a new business environment that, while respecting the impact of the global pandemic, has discovered innovative ways to meet a series of evolving challenges. The wealth management industry has played its part and has moved quickly to adjust to how critical investment services are delivered to financial consumers in all segments. Throughout this edition of the Fee-based report there is evidence of how various channels and solutions have adapted to the new environment and how participants have bounced back—even if not all the way back—from the difficult times experienced in the first four months of 2020.

The lead story looks at the use of third-party managers, particularly in the private investment counsel (PIC) sector. The feature examines the divide between the believers and the non-believers and reports on the dynamics that have led to an increase in the use of sub-advisors over the past decade. The article also speculates on the outlook for managers seeking to work for other managers in a time when assets under management are becoming increasingly concentrated with large, multi-faceted firms.