Northern Trust Corp. will need to do more than hire a Toronto native to continue the rapid growth of its Canadian wealth management business, analysts said.
The Chicago company said last month that it had hired Robert Baillie as the president and chief executive officer of Northern Trust Co. in Canada and as the chairman, president, and CEO of NT Global Advisors Inc. in Toronto.
He succeeded Jeffrey W. Conover, who held those positions for three years. Mr. Conover, a Chicago native, will continue to work in Toronto through the transition before taking a new executive position in Chicago this year.
During Mr. Conover’s tenure, Northern Trust tripled its assets under management in Canada, to $3.5 billion. William T. Huffman, the chairman, CEO, and president of NT Global Advisors Inc.’s Chicago parent, Northern Trust Global Advisors Inc., said the Canadian assets still make up only a small fraction of Northern Trust’s $33.5 billion of worldwide assets under management, but he expects large scale growth.
“We have added tremendously to our asset services and custody services,” Mr. Huffman said. “It has reached a point where what we bring to clients in Canada is similar to what we do in the U.S.”
Mr. Conover said Northern Trust has increased its assets under custody in Canada from $20 billion to $75 billion in the past two years. It can continue to develop significant business in Canada by further increasing its distribution through third-party channels, he said.
“We are building products for other people’s wealth platforms, and that has helped us develop new business,” Mr. Conover said. “We are building the model for portfolios that they are distributing.”
Mr. Huffman said that despite Mr. Conover’s success, Northern Trust made the executive change because it was a good opportunity to shift Mr. Conover to the United States, and Mr. Baillie has a strong reputation in the market.
Northern Trust hired Mr. Baillie from RBC Dexia Investor Services. He was head of asset servicing sales and client service at the joint venture of Dexia Group and Royal Bank of Canada.
“We knew Rob, and we knew his reputation,” Mr. Huffman said. “It was time to take the next step with our Canadian business and his experience in the Canadian marketplace will allow us to make that move.”
Analysts said that simply replacing an expatriate with a native Canadian would not help Northern Trust replicate the past three years, but the momentum developed by Mr. Conover could.
But Geoffrey Bobroff, an East Greenwich, R.I., analyst with Bobroff Consulting, said having a native Canadian running operations there could help Northern Trust develop new third-party relationships.
Mr. Baillie has been the head of sales and relationship management in North America for RBC Dexia Investor Services, where he was in charge of developing the custody and fund administration business.
Mr. Bobroff said this executive change might be more about bringing a successful executive to a new position in the United States. Other companies, including Fidelity Investments, have used Canada as a “proving ground” for top executives before bringing them here.
In 2001, Fidelity move the president of Fidelity Canada, David Denison, to run its U.S. institutional brokerage business. Mr. Denison had helped Fidelity expand its share in the Canadian mutual fund market from November 1995 until 2001.
Adam Banker, a spokesman for Fidelity, said the company regularly moves executives between its U.S. and Canadian operations.
Mr. Baillie said he believes that there are strong avenues for Northern Trust to grow in Canada.
“There is an opportunity for us in terms of turning up our marketing effort more than we have in the past,” he said. “We want to appeal to more Canadian firms by targeting larger firms and a broader number of opportunities in the market.”
He would not say how much more Northern Trust would spend on marketing and ad spending in Canada this year and next year, but he did say it would continue to recruit more sales representatives.
Mr. Conover said it has added two this year, and in the past three years it has increased the sales staff from 27 to 45.
“Northern Trust has proven that it will staff as we need to in order to support the growth in Canada,” her said. “Rob is keen to that. It is one of the things that attracted him to Northern Trust. He is extremely focused to growing this business, and he’ll look to add to the sales staff in order to do it.”
The goal is not merely “to continue incremental growth,” Mr. Conover said. “We want exponential growth. I am an expatriate, and Northern could have just replaced an expatriate with another expatriate, but in order to grow exponentially, we needed someone who had a deeper knowledge of the marketplace.”
