Som Seif and Tom Bradley explain a partnership that brings the investment manager into a mass-affluent oriented advisory business
Purpose Unlimited has made its first acquisition in the CIRO-registered advisory space. The parent company of Purpose Investments, Advisor Solutions by Purpose, and Longevity by Purpose among others has announced the acquisition of Steadyhand Investment Funds Inc. a Vancouver-based advisory and investment firm with over #1.3 billion in AUM. It’s a move that Purpose Unlimited CEO Som Seif says gives his firm access to a novel model serving a somewhat challenging market segment.
“One of the things that really excited us about the opportunity was that what I think Tom [Bradley] and the team have built from an operating perspective, sitting on top of the CIRO mutual fund dealer is actually a really elegant operating structure that really filled a meaningful gap, specifically in how to serve smaller accounts that in a traditional investment counselling model actually are quite expensive.”
Tom Bradley, co-founder and Chair of Steadyhand, outlined the model that his firm operates and how it differs from traditional advisory teams. They currently work with five different asset managers as sub-advisors to curate a series of funds that are offered to clients. Those funds are offered in the context of advice provided by an ‘investor specialist’ who can help with initial financial plans and investment goals and will support during periods of crisis or major life events, but doesn’t offer quarterly check-ins.
“It's low touch high feel,” Bradley says. “Clients get to know our team well, but they'll only talk to us once or twice a year.”
It’s a business model that specifically targets some of the mid-market segments that many advisory firms are moving away from to focus on high net worth clients. Bradley and Seif explain that Steadyhand tends to capture more of the mass affluent market, of between $250,000 and $1 million in liquid investable assets. Those are investors who may often be seen as lower margin, but Bradley and his team appear to have made that market segment work. Now Bradley says the Purpose acquisition will help them achieve the next scale of growth.
Highlighting the scalability of their existing platform, Bradley says that the Purpose acquisition adds marketing infrastructure, a tech stack, and the “entrepreneurial oomph” they need to achieve their next level of growth. He explains that existing Steadyhand clients should begin to see a number of improvements immediately.
“I think our digital client experience will improve tremendously,” Bradley says. “We do think having access to that investment management team at Purpose can help us make our products better. Our clients love a reasonable fee and the transparent reporting we do. They like the access they have to our investor specialists. We wouldn’t have worked with purpose if we didn’t think they believed in all those things.”
Seif, for his part, saw a values alignment with Tom and the team at Steadyhand. He shared the view that long-term market success comes from a less active approach with less focus on the “small short-erm stuff” and more attention paid to a consistent and persistent strategy. He sees value in their service model, too, which Seif says will help clients stay committed to that principle. He says that Purpose saw an opportunity to “enhance” Steadyhand’s offerings through access to their portfolio management expertise.
Accessing Purpose’s asset management team will not mean that Steadyhand will now be exclusively limited to using Purpose strategies in their client portfolios. Seif explained that there will likely be an expansion in the number of sub advisors and strategies that Steadyhand uses. They will review the existing sub advisors and strategies with a view to that long-term portfolio construction strategy.
“When we sat down one of the things we talked about was if there’s a way to enhance the process of some of the managers, whether with new third-party sub advisors or with purpose investments’ capabilities, we’ll figure that out together,” Seif says.
While this acquisition represents a new growth direction for Purpose, Seif says that his firm is not explicitly seeking expansion through the acquisition of advisory firms or teams. Instead he spoke more generally about a goal of supporting better and stronger advice. That could include supporting independent wealth management firms through their existing advisory platform or in adding new teams into their ecosystem.
“The most important thing is that we've really built an infrastructure to support the advice business in a deep way, but it's something that we care deeply about. I think we're one of the leaders in the country in doing so, and we've done it really from the perspective of, how do advisors win, and ultimately, you know, provide a better advice model,” Seif says. “I wouldn’t look at it as though we’re in or out of the business of acquiring CIRO dealers. We just think there’s a huge opportunity to continue to help firms like Steadyhand be successful.”
