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Gordon is betting his career on the premise that RBC has gotten its act together in the two years he was away
November 28, 2016 — 8:58 PM UTC by Sarah O’Brien
Brooke's Note: RBC has gone hot and cold on RIA custody business. Its interest seemed to reach a zenith in 2010 when it bought the old RIA custody unit of Bear Stearns from J.P. Morgan. Royal Bank of Canada is hustling to become an RIA custody force Then, dithering. It looked like a final sign of withering RBC interest when its stalwart Craig Gordon bolted in 2014. Now maybe it's a good sign that he's back? Sarah O'Brien engaged in this Q&A with Gordon revealing how RBC sees a digital way forward.
After a two-year separation a stalwart of RBC’s RIA custody business is back -- but not before changes to his liking occurred.
When Craig Gordon left as director of RBC Correspondent & Advisor Services, in 2014, he had been with Toronto’s Royal Bank of Canada for 13 years. At the time, both sides called it an amicable split, but sources wondered if his departure was a sign of RBC's continuing ambivalence toward the RIA custody unit, established in 2007.
Like all broker-dealers whose revenue relies chiefly on salaried commission-earning stockbrokers, RBC struggled with the self-negating business proposition of giving brokers a way to escape captivity without giving up all the infrastructure enjoyed by those brokers.
RBC vigorously denied that it was caught in that whirlpool but there was turbulence aplenty. See: RBC's most visible RIA leader, Craig Gordon, departs.
Now, Gordon is back as chief of strategic development RBC Correspondent & Advisor Services after spending two years at Minneapolis-based DST Market Services LLC, where he led the company’s newly established correspondent clearing business, designed specifically for retail independent broker-dealers.
Gordon returns to what he sees as an energized RBC Correspondent & Advisor Services. The custody unit's assets under management are still in plateau-mode at $13 billion in June, as opposed to $11.5 billion in 2010. But since Gordon left, RBC has completed the acquisition of City National Bank and signed on two robo-advisors, one of which, NextCapital, will work with the custody unit's RIAs. See: How an eclectic trio of RIA custodians are willfully gaining ground with snail-like precision -- Part 2 of 3.
His return to RBC is a homecoming in more ways than one. As a native of Newport Beach, Calif., he looks forward to returning to the West Coast city, home of his new job. The move also will put him close to City National Bank headquarters in downtown Los Angeles. See: City National sells off salvaged remains of Convergent Wealth Advisors, but not before Convergent sheds nearly $7 billion of AUM
RIABiz recently chatted with Gordon about his return to RBC CAS and what’s in store for both business units.
RIABiz: Why, really, did you return to RBC?
Gordon: Over the past couple of years, I have seen significant advancements and a huge commitment by RBC to growing its businesses in the U.S. The acquisition of City National Bank strengthens each entity and provides a unique opportunity for financial advisors to leverage the capabilities of each to better serve clients in the U.S. [due to access to commercial banking products and services]. Additionally, RBC Advisor Services has made significant advancements in technology and expanded network of solutions in the RIA business. Many are featured on our new Marketplace search tool, which was built exclusively for RBC’s correspondent and RIA firm clients and their advisors. The mobile-friendly platform features the latest, world-class financial services offerings not only from RBC, but from third-party providers as well. [RBC CAS] is also offering new products and services, including new model portfolios, a digital advice offering and the ultimate advisor platform.
RIABiz: Are you returning with a fresh perspective of any sort, whether from working at DST or simply from being away from RBC for a couple of years?
Gordon: Yes, specifically in last few years I have been significantly involved in working with advancements in new advice offerings, including digital and robo, as well as automatic investment offerings to help make the custody process more efficient. We believe these new ideas will help us grow and expand in the RIA space.
RIABiz: Will it be weird coming back in a different role?
Gordon: Through all of the roles I have had, both at RBC and at other companies, my passion has been on key development opportunities for growth. That is what I have enjoyed the most and where my passion has been. So, I am excited to do what I do best – work towards growing the business, focusing on advancement in our new offerings. I am also excited to be relocating back to the West Coast. I was born and raised in Newport Beach and moved to Minneapolis with RBC in 2005. While I am excited to move back to California, I have sincere admiration for the leadership team and people who operate the day-to-day business in Minneapolis.
RIABiz: What has changed at RBC since you’ve been gone?
Gordon: As mentioned previously, with the new leadership in place, RBC has demonstrated a commitment to growing their businesses in the U.S. We have a new CEO, Michael Armstrong, and have Brett Thorne as the new head of RBC Correspondent and Advisor Services. I am excited to work with them and other new members of the leadership team.
RIABiz: Where specifically will you focus your energy? Where are the most opportunities?
Gordon: I will be focused on strategic development opportunities to grow in the U.S., specifically in the digital space, but also in making traditional practices more cost and operationally efficient. There are strategic opportunities to expand the custody business into the institutional space with the help of our [RBC] Capital Markets partners.
RIABiz: What goals for RBC do you and the rest of the business development team have?
Gordon: Greg Plifka is the director of the business development team. Through his leadership, the broader business development team will leverage the greater resources of RBC to showcase our competitive, integrated wealth management platform that can be leveraged across a broad range of models and channels. We are going to help drive RBC’s plans to make the U.S. its second home market.
Mentioned in this article:
RBC Advisor Services
Specialized Breakaway Service
Top Executive: Brett Thorne
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