Davis-Rea gets bought

O’Connell is officially still an employee of RBC until the end of the month and says he wanted to give his current employer ample notice of the acquisition and leave the company on good terms.

“It wasn’t about me trying to sneak out the door over a long weekend,” he says.

“I’ve always wanted to run my own business,” O’Connell explains. Upon regulatory approval, O’Connell will become chair and CEO of Toronto-based Davis-Rea Ltd.

His first order of business is to get to know the client base better, in order to reassure them that there will not be any substantial change in the way the firm manages their money.

“These people’s portfolios have been managed very, very well; there is some low cost base stock in there and you have to be sensitive to that,” he says.

He says the client base is made up of roughly 80% individual investors and 20% institutional clients.

The firm will “aggressively” pursue new distribution, including forging relationships with the planning community, which would include more accessible pools with investment minimums of $50,000. Current minimums are $250,000.

“I will be the sole shareholder of the business, but I don’t expect that will be the case forever,” he says. “I intend to look for strategic acquisitions or mergers, because I think the industry is going to go through a major restructuring, quite frankly.

“I think a lot of people have had a ‘near death experience’ and the regulatory requirements are increasing all the time — I think you’re going to see the smaller players get pushed out.”