Canada’s small brokerage firms will be forced to shut down or combine if the country’s lackluster capital markets don’t improve, said Ian Russell, CEO of the Investment Industry Association of Canada.
Bloomberg reports that more than a third of Canada’s 185 so-called boutique firms have been losing money in the past two years, estimates the association, which represents the nation’s securities firms.
'That can’t go on for a long period of time', Russell said in an April 5 interview at Bloomberg’s headquarters in New York. 'Many firms are reaching the end of the tether and we’re going to see an accelerated pace of acquisitions or firms just turning out the lights'.
Canada’s smaller firms have seen revenue shrink by about a third to $3.93bn in 2012, according to an IIAC report from March. Retail revenue among boutiques has fallen about 20% from the 2006-2007 highs, mainly from falling brokerage commissions.
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image: © Steve Snodgrass