DISCLAIMER Legal advice
The steps and documents below outline various legal aspects which will have a significant impact on the value of your assets to be transferred. You must know that since this is a private agreement to which Investia is not a party (Investia only acts according to instructions of the Acquiring Representative and those of the agent or executor of the Selling Representative), Investia cannot judge the merits or the scope of the agreement entered into between the Acquiring and the Selling Representatives. Therefore, the receipt or acceptance of the agreement by Investia does not mean that Investia is bound by any of its terms. More specifically, Investia's policies and procedures, as well as any and all applicable laws and regulations, will always prevail over any agreement, namely in the event of inconsistency between provisions. It is strongly recommended to seek legal advice before entering into and executing any such agreement.
In addition, please note that the information contained herein is not intended to provide legal advice but should rather be seen as a guide to assist you in understanding certain basic elements and common situations. It is worth mentioning that Investia's procedures at the time of the transfer will prevail over any information contained herein in the event of discrepancies.
The progressive sale of a book of business is a common occurence and implies a period of transition during which the Selling and Acquiring Representatives may temporarily share the responsibility and administration of client accounts. This transition period may extend over several months or years and will help gradually build a relationship of trust between clients and the Representative newly appointed to their accounts.
Regardless of whether the sale is immediate or progressive, adequate preparation is an essential part of the sale of a Representative's book of business. As the sale of a book of business constitutes an important event in the Representative's professional and personal life, every aspect of the transaction should involve careful consideration to ensure a smooth and seamless transition for clients and the Representative taking over the business.
It is recommended that you refer to the document Succession Planning to review all the elements you need to evaluate before taking action.
Upon the acquisition of a book of business, whether the acquisition consists of assets (clientele) or shares (company), it is important to conduct periodic reviews to ensure that the assets or shares purchased correspond to the requests of the Selling Representative and expectations of the Acquiring Representative. Since the purchase of a book of business constitutes an important transaction which is likely to significantly impact your financial and professional future, it is recommended that you seek legal advice to ensure that your reviews are thorough and accurate. In any case, it is appropriate to ensure that the Selling Representative has a record in good standing with the Dealer and regulatory, civil, criminal and tax authorities; that commissions declared are those paid by the Dealer; that there is no mortgage, security or charge on the assets purchased, etc.
A written agreement setting out the details of the sale must be entered into between the parties. In order to help you ensure that no aspect of the contract is overlooked, a model agreement may be used as a reference. However, certain clauses may need to be adapted to reflect your specific situation (See Immediate/Progressive Sale of a Book of Business Agreement template).
In the event of clients leaving Investia for another firm upon the transfer of client accounts, it is recommended that the Selling Representative include a price adjustment clause in the Buy/Sell Agreement.
Representatives may determine the remuneration to be paid by informing the Registration Department of the percentage of commissions to be distributed among each party (in the case of commission sharing) on the Commission Distribution Agreement form.
In order to facilitate the purchase of a book of business by a Representative licensed with Investia, a financing program is offered through Industrial Alliance. For more details, please refer to the “Financing” section of this website or contact your Regional Vice-President of Sales.
You may also be eligible for a transition bonus upon acquiring another Investia Representative’s book of business. Contact your Regional Vice-President of Sales for further details.
Both Representatives involved in the sale of a book of business must forward a copy of the Buy/Sell Agreement to the Registration team at registration@investia.ca.
The transfer of a Representative's clientele can be quite simple or more complex depending on the amount of assets under administration, type of assets, size of the book of business, type of clients, etc. By keeping a few simple administrative and operational considerations in mind, business continuity and sustainability will be facilitated and the impact on your clients will be reduced.
While not mandatory, the most common way to engage in the progressive sale of a book of business is to request a joint code to share with the Representative who will be servicing client requests in the future. In this situation, the names of both the Acquiring and Selling Representatives will now appear on portfolio statements issued to clients by Investia.
Request a new code (optional)
The most common way to engage in the progressive sale of a book of business is to request a joint code to share with the Representative who will be servicing client requests in the future. In this situation, the names of both the Acquiring and Selling Representatives will now appear on portfolio statements issued to clients by Investia.
Both advisors under the code must have the same provincial licences and registration categories.
The Acquiring Representative may choose to have a new code created in their name only in order for their new client accounts to be administered separately from those of existing clients.
In the case of a transfer of client accounts to the Acquiring Representative, the latter can request that a code be created in their name in order to separate these new client accounts from their existing client accounts.
A request must be forwarded to the Registration team at registration@investia.ca along with the Commission Distribution Agreement Form.
Send transfer instructions
In order for client accounts to be transferred to the Acquiring Representative’s code (or the joint code), the following documents should be forwarded to the Investia Registrations team at enregistrement@investia.ca.
Upon receipt of the transfer instructions, accounts will be transferred in Univeris by the Investia Registrations team and a request will be forwarded to the appropriate fund companies. Once this has been completed, the Representative is responsible for following up to ensure that the transfer is completed.
The name of the Acquiring Representative will now appear on portfolio statements issued to clients by Investia.
Client notification
A Representative who plans to sell their book of business must notify their clients in writing at the time of the transfer* and provide clients with the new Representative's contact information (Client Notification Model – Immediate Sale).
It is recommended that a letter (or an email) be sent to clients at least 10 days prior to the date on which assets are scheduled to be transferred. This letter or email must be forwarded to the following address: sales_communications@investia.ca for approval from the Compliance Department.
*Please note that as soon as client accounts are transferred, the name(s) of the new Representative(s) will appear on the Investia Client Portal and on the quarterly statements issued by Investia.
Client accounts under the Acquiring Representative’s code: The Acquiring Representative will ensure service to clients subject to the sale and process all solicited and unsolicited transactions under their own Representative code.
Client accounts under the joint code: Both Representatives may ensure service to clients subject to the sale by processing all solicited and unsolicited transactions under the new joint code, subject to the conditions outlined below.
Please contact your Compliance Supervisor to confirm the requirements in terms of the documentation to be provided as well as particulars following a transfer of client accounts (KYC, KYP, signatures, leveraged loans, etc.)
Client accounts under the Acquiring Representative’s code: Since client accounts will have been transferred to their code, the Acquiring Representative will process trades in the same manner as for their existing clients.
Prior to each trade, the Acquiring Representative must ensure that either one of the following documents has been imaged:
Client accounts under the joint code: Since client accounts will have been transferred to a joint code, the Representatives will process trades in the same manner as for their existing clients. Trades may be performed by one Representative at a time, provided that both Representatives have reviewed the the client’s KYC.
Prior to each trade, the new Representative under the joint code must ensure that either one of the following documents has been imaged:
In any case, a new KYC Update form must be completed and signed by the client no later than 36 months after the date of the last signed KYC Update form on file.
Physical (or electronic) files must be transferred to (in the case of an immediate sale) or shared with (in the case of a progressive sale) the Acquiring Representative.
The Selling Representative should keep copies for reference purposes in the event of a complaint arising from events taking place while they were the Representative on record. In order to facilitate file transfer in the event of death or a disability, it is recommended that a clause to this effect be included in the agreement entered into by both parties.