Canaccord Genuity delivered better-than-expected profit in its latest quarter as revenue rose 25 per cent on strong contributions from wealth management and capital markets. The firm also increased provisions tied to a long-running U.S. compliance matter and says it is close to finalizing a broad settlement.
BNN Bloomberg spoke with Dan Daviau, chairman and chief executive officer at Canaccord Genuity, about the firm’s record asset levels, its compliance overhaul and how the pending settlement is influencing market reaction.
Key Takeaways
- Canaccord delivered stronger-than-expected quarterly profit as revenue climbed 25 per cent on broad gains across wealth management and capital markets.
- The firm reported record wealth management assets of $135 billion, marking its seventh straight quarter of asset growth.
- Canaccord says it is nearing a unified settlement with U.S. regulators over past compliance gaps at non-core trading operations.
- The company has now set aside more than US$100 million in provisions for anticipated penalties tied to the case.
- Management says it has significantly upgraded its compliance infrastructure and expects the settlement process to conclude in the coming months.
Read the full transcript below:
ANDREW: Let’s check out shares in Canaccord Genuity, that company moving closer to a settlement with U.S. regulators. Shares down a bit today. We’re joined by Dan Daviau, the chairman and CEO. Thanks very much, Dan. Just remind us then, so most of your business these days is wealth management in Britain, in Canada and Australia, just handling money for wealthy individuals and institutions.
DAN: Yeah, exactly, exactly right, Andy. And you nailed that. That’s where we’ve been growing for the last seven years in our business. It’s our wealth management business. We hit record assets of $135 billion this quarter. The U.K. is our biggest wealth business. But we’ve got a huge wealth business in Canada as well, $50 billion. And then in Australia, burgeoning wealth business — we just did another acquisition there — so we’ll be at $17 billion in assets there. And that’s, you know, managing your viewers’ money, lots of, you know, households and wealthy individuals’ money and their market investment. So it’s been a pretty exciting part of our business.
ANDREW: What’s your total asset base now, roughly?
DAN: Yeah, $135 billion, which is a record. And quite frankly, that’s the seventh consecutive record quarter we’ve had. Every quarter, it kind of grows and grows and grows.
ANDREW: I know there’s a spectrum, but what would the management fee on that asset base be? Well, I mean...
DAN: You can do it backwards. On $135 billion of assets, we do about a billion dollars in revenue, so that’s just a little bit less than one per cent overall.
ANDREW: And then you do, obviously, you do financings, IPOs and stock issues. That’s about a third of your business these days.
DAN: Yeah, from a profitability perspective, it’s about a third. From a revenue perspective, maybe just a little under half. And again, that’s taking entrepreneurial companies public and raising the money and helping them buy and sell each other, and trading their stock like any other investment bank would do. We tend to focus — you know, we’re huge in the mining sector. That shouldn’t come as a surprise, given dominance in Australia and Canada — but we’re big in technology and healthcare and sustainability and consumer and several other sectors.
ANDREW: Now, your partner in Britain could trigger a sales process. Can you update us on that?
DAN: Yeah, that’s a little too nuanced. You know, we own almost 70 per cent of our U.K. wealth business. We brought in a financial partner to help us grow that business four or five years ago. You know, at the end of five years they start — we start — having to figure out how we’re going to take them out of that business or pay them. We’re talking to a lot of people about how to do that, whether we refinance them or look at other options. So, yeah, it’s a very valuable business we own there. You know, we did 22 million pounds of EBITDA in that business this last quarter. So it’s a very valuable business, and we’ll continue to assess options. There’s no gun to our head. We are incredibly excited by that business. It continues to hit or exceed its targets in terms of what it set for itself. So it’s a very good business to own. It’s a very good business to invest in. But yes, we do have a financial partner in that business that we’re going to have to deal with at some point.
ANDREW: So just on this regulatory snag you’ve had, you’ve brought the total provision here to just over $100 million. What are the regulators beefing about there?
DAN: Yeah, it’s primarily a compliance oversight issue of some non-core trading operations we had in the U.S. And this has been brewing for three years. For three years we’ve been trying to get this thing behind us and settled. And finally, we’re in a place where we actually have a pretty good sense as to what the fine would be, which is why we increased our provision. We’d like it behind us. It doesn’t implicate any of our current businesses, any of our current employees, any of our customers, and it really is a compliance oversight issue. I don’t want to oversimplify it by saying, you know, didn’t file the right things that we should have filed when we wanted to file it. But we’ve done a complete transformation of our compliance infrastructure there. We’ve taken it incredibly seriously. We’ve spent an inordinate amount of money over the last three years rectifying and remediating what we needed to remediate. So we feel pretty good about where we stand today. But, you know, the U.S. government’s been shut down for the last 43 days — just reopened. You know, we’ve got people on the other side we can talk to and, you know, get this finalized over the next several months.
ANDREW: Just want to get — I mean, you’ve been around the markets for a while. Do you get a feeling of undue speculation and froth? I’m talking about these triple-leveraged ETFs, for example, and crypto proliferating. Do you think — I mean, you know, there’s always going to be human beings who want to take a flyer on things — but do you think there is a gambling element creeping into the markets?
DAN: I think there’s always been that, to be honest, Andy. It depends on what element. Sometimes they bet the other way, depending on the market. But I’ll tell you, broadly speaking, I mean, we have seen — you know, from a market perspective — you’ve seen 80 per cent of the central banks cut rates this year. You’ve seen Canada and the U.S. cut rates in October. You’ve seen the Russell 2000 up almost 20 per cent — you know, that’s a smaller-cap index. So we haven’t seen that broad market participation in a long time. IPOs are picking up. Private equity firms are doubling the number of IPOs they’re doing — you know, taking companies public through IPOs. So, you know, there is speculation, I’m sure, in some of the, you know, triple-beta leveraged funds that you’re talking about. But broadly speaking, you know, there are some real fundamentals driving the market as well, and we’re seeing the benefit of that in our underwriting business.
ANDREW: Dan, thank you very much indeed for joining us.
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This BNN Bloomberg summary and transcript of the Nov. 14, 2025 interview with Dan Daviau are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
