Search results will open in a new window on money.tmx.com.

Back to Insights from TSX Trust.

Innovating Canada’s registered plan trustee market

At TSX Trust, we're proud of our established track record of innovation, and our business is built around unmatched service, expertise and superb execution. We're constantly looking at ways to do things better than we do already, and to disrupt the status quo in service of our clients.

It was exactly this kind of thinking that we've decided to bring to the registered plan trustee business, which we entered recently and which we believe is overdue for change.

The move is a significant service expansion for our business, which is already the largest Canadian-owned transfer agent and provider of corporate trust services in the country. The strategic rationale for it is really two-fold: first, it made perfect sense because it's a great fit with our existing service offering, and also with TMX Group more broadly.

TMX serves as a gateway to the country's capital markets ecosystem and already has extensive broker relationships as a result, so this service offering will enable us to build on those relationships. And for us at TSX Trust, this expansion creates yet another opportunity to provide value-added services and offer a better product than what exists in the market today.

Simply put, the model that has existed for the last 20-plus years was really a one-size-fits-all, take-it-or-leave-it offering that doesn't recognize the unique and nuanced needs of individual brokerage firms.

Our approach to providing dealer services is completely different.

We've decided to look at this as a true partnership with our brokerage clients, where we will work with them to get them better interest rates for uninvested cash balances, improve the experience of their end-user clients and drive process improvements for their advisors. We want to make the trustee/dealer relationship more collaborative and client-centric from start to finish.

This has never been more important, particularly in the context of the global COVID-19 pandemic. Historically and generally speaking, the financial services industry has tended to rely at least to some extent on paper-based processes. For example, when a brokerage firm signs on a new client, some registered plan trustees require them to complete various physical paper forms. The pandemic of course has made that a lot more difficult – and for TSX Trust, that's an opportunity to innovate.

Where we differ substantially is that we will work with our clients to enable them to make the decision about whether the forms can be executed electronically, based on the broker's risk tolerance and the relevant legislation. We'll work with them to provide guidance, but ultimately we believe it is their decision to make.

In addition, interest rates have dropped significantly because of COVID-19. This means that the interest income earned by brokerage firms is down significantly too. We can help address this new reality. First, we may be able to pay higher rates to a brokerage firm based on our banking relationships and second, we'll work with firms directly to secure higher rates for them. If they're able to find a better rate at a Schedule I, deposit-insured financial institution, we'll work with them to deposit their balances at that institution. This can help generate a meaningful amount of interest income for the brokerage, which could be particularly helpful given the current environment.

Fundamentally, our entry into the registered plan trustee business is driven by the belief that we can do a better job serving clients' needs in this market than has been the case to date. Our confidence in our ability to deliver on this goal is driven in part by listening closely to the comments, questions, needs and concerns of our clients -- both current and prospective. If you're a brokerage firm seeking to learn more about TSX Trust and our registered plan trustee service offering, don't hesitate to contact me directly at neil.carnell@tmx.com.