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A recipe for success: Winnipeg-based wealth management firm continues to build employee ownership

Mitch de Rocquigny (left) and Evan Mancer are strong believers in employee ownership.

Evan Mancer has a recipe for helping clients reach their retirement goals and a key ingredient to the firm’s recent success is employees eat their own cooking at Cardinal Capital Management.

The president of the Winnipeg-based financial services company is proud of the firm’s independence and sees its employee ownership plan as a benefit to its people, the company and its clients. A share offering is being made later this year that will bring even more employees into the owner category.

“There’s an extra level of drive when you’re a shareholder. People are willing to go the extra mile,” he says.

About 25 employees who have joined in the last few years, some of whom have the potential to be future leaders, have been given the opportunity to buy into Cardinal. Mancer hopes a provincial tax credit as well as internal financing options will convince many of them to add “owner” to their resumes.

Employee ownership can have a wide range of benefits for a company, including giving employees an increased sense of belonging and pride in their work and management fostering a collaborative environment where everybody understands how they contribute to the firm’s overall success.

Just as importantly, employees are motivated to work hard and think strategically because the company’s bottom line has a direct impact on their own net worth.

Cardinal, which runs five offices across the country, has more than $4 billion in assets among nearly 3,000 client families in both Canada and the U.S. The company has carved out a niche over the last 31 years by investing client assets in industry-leading, dividend-paying companies.

As the company grows, so does its employee count, which recently hit 82, more than double its total from 2019.

Employees Are The Driving Force Behind Any Successful Organization
Employee-owned Companies Usually:

• Have more productive, motivated and engaged employees
• Have higher employee retention
• Experience faster growth
• Have higher wages and better benefits
• Have a stronger corporate culture
• Are less likely to experience job reductions
• Have greater stability and consistency in service to clients

Having an employee-owned firm is in the best interest of the company’s clients, Mancer says, because they’ll have continuity in their advisor, the management team and the firm’s values.

“You won’t have any major changes in philosophy or style. Employee-owned firms tend to be more stable. Clients can rely on who their lead advisor is and have confidence that the company isn’t going to reinvent itself down the road that may be to their disadvantage,” he says.

In fact, companies that are bought by competitors could be forced to change their core principles or be dismantled after cost synergies are squeezed out. Private equity suitors might make deep cuts to turn a short-term profit.

But wanting to expand the ownership base and making it happen are two very different things. Following a couple of years of hard work, the goal was attained in 2019.

“From the moment we achieved this broad ownership, our growth took off like it hadn’t in our history (dating back to 1992),” Mancer says. “In the past four years, we’ve more than doubled our assets under management and our EBITDA (earnings before interest, taxes, depreciation and amortization),” he says.

Like many companies, business at Cardinal ebbs and flows—often in response to what stock markets are doing—but it’s during stretches with significant revenue growth that its employees have gone to the wall.

“We’ve noticed that our people have really stepped up during those periods and put in the extra time to make sure everything goes smoothly. They rose to the challenge,” he says.

For most of the company’s senior shareholders, the majority of their own portfolios is in Cardinal shares.

“There’s that much more commitment when you have that much of your own net worth tied up in the company,” he says.

Some of those senior shareholders have agreed to sell their holdings back to the company to help foster a new generation of employee-owners. One of them is Tim Burt, the founder and former CEO, who started the company in his River Heights basement all those years ago when he was the sole shareholder.

“If it’s handled properly, there’s no reason why the company can’t have a 50-year lifespan as an independent firm,” he says.

Having ownership spread out over a growing number of employees virtually ensures that Cardinal will remain one of Canada’s last independent financial services firms. He notes that Manitoba used to be home to a significant number of independent companies who built their businesses from Winnipeg, only to sell to bigger players.

There are a lot of other spill-over benefits to the community by having companies based here, Burt says, such as employees joining boards (both non-profit and corporate), raising families here, increasing the local tax base and helping Winnipeg generally punch above its weight. In fact, more than 200 people have worked for Cardinal in Winnipeg since its inception.

Most employees want to know they have a path for career growth, including a higher salary, and owning a stake in the company can crystallize that path.

“When you’ve got no share ownership, employees often feel that a lot of their efforts are benefitting somebody from whom they’re disconnected. People like to see their efforts reflected in their paycheques. Successful people want to feel they’re building something or that they’re part of a team that’s building something. Share ownership gives them that,” Mancer says.

“We’ve got some young people at Cardinal who are full of potential. You never know for sure who the future leaders are at the company but you want to have a program in place that gives them all a path towards that.”

Mitch de Rocquigny joined Cardinal as an investment counsellor in 2016. When the opportunity to buy company shares was presented three years later, he jumped.

“When you believe in something, you want to be an owner and put your money where your mouth is,” he says. “Cardinal is a family, a community of like-minded employees, owners and clients. When our clients do well, we do well and everyone is happy. That’s a recipe for long-term growth.”

Employee-owners are more focused on various parts of the business, particularly expenses and revenues, than they were before they bought shares, he says.

“You have more of an eye on the business and what’s working and what’s not working,” he says.


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