Fewer middle-tier MGAs left, says QFS CEO

Qualified Financial Services has acquired another MGA, Performins Canada Inc. This further alters Canada’s MGA landscape.

It’s a significant acquisition for QFS, says Kevin Cott, CEO of Qualified Financial Services in Toronto.

“By bringing the two [MGAs] together, we have come to a new level of about 1,000 committed advisors,” he says. “[This will ensure] a significant presence in Quebec, Ontario and the Atlantic region.”

The move, he says, is part of the strategy of building different kind of MGAs in the marketplace, which continues to shrink as the consolidation trend takes hold.

Speaking about the trend, Cott says there are now very few middle-tier MGAs left in the market.

“This is significant to acquisition because other than the large third-party-backed organization in the MGA marketplace, we’re probably now one of the largest privately owned MGAs,” he says.

The latest acquisition will make QFS one of the leaders amongst the second-tier MGAs.

Byren Innes, senior vice president and director of the NewLink Group in Toronto, says this development signals a new round and level in consolidation.

“Performins was an early leader in consolidation, but now we see the consolidator being consolidated,” says Innes. “This demonstrates once again the need to have scale to be effective in the future.”

Cott says acquisition remains the firm’s overall strategy, which includes identifying smaller regional organizations for future considerations.

“[They] would further support our geographic presence, whether it be in a particular province or an area of a province,” says Cott adding the firm’s future acquisitions will not be the size and significance of the one just concluded.

In a staff memo, Cott says the transaction will lead to the addition of more than 400 new advisors. “We believe that QFS and Performins will be better together,” says the note.