2025 was a record year for RBC’s U.S. wealth management business in terms of advisor productivity recruited into the firm. And the company has had some recent notable recruiting wins, primarily from the wirehouses.
In July, the firm poached Hudson River Wealth Management, a $1.7 billion team joining its Westchester, N.Y. branch from UBS. In September, it announced dual deals, with a $1.1 billion Michigan-based six-person team joining from UBS and a J.P. Morgan advisor managing nearly $1 billion decamping to RBC. That was followed in November by the opening of a new branch in New Orleans with a five-person team that had been managing over $1.2 billion in client assets for UBS.
The wins are part of RBC’s recent growth strategy, which includes a plan to double the U.S. wealth business over the medium term and add 600 advisors by 2029, according to Neil McLaughlin, CEO of RBC Wealth Management.
In a recent wide-ranging interview, McLaughlin chatted with Wealth Management about how the firm plans to meet the recruiting goal, why you won’t see RBC pivot into the independent channel, and how it’s using artificial intelligence to help advisors, not replace them.
The following has been edited for length and clarity.
Wealth Management: You have purview over RBC’s global wealth business. What are your growth goals for the U.S. wealth business?
Neil McLaughlin: We’re really bullish on the U.S. wealth business. At our investor day, one of the key messages was that all these businesses, including capital markets and our franchise at City National, are doing more and more work together. But we also put out an earnings target and a bunch of business-specific metrics.
These were medium-term objectives, so we’re not going to get overly confident about where we are. It starts a multi-pillar strategy to double the business. And when we say double, we mean earnings in the business. The U.S. is what we call our second home market. It’s an important place for RBC to grow, and wealth management is a great platform for us to do that.
Under the leadership of Michael Armstrong, CEO of RBC Wealth Management U.S., the U.S. wealth business has quadrupled earnings, and his team has built a chassis of technology and capabilities, but also a reputation and a culture that’s enabled that growth. And we’re now at the point where we will have to increase investment and the breadth of product that we can offer clients. But we have every appetite to do that, and we have a roadmap, an initiative to get it done.
WM: Your plan to double the business, will that involve recruiting?
NM: We have a very formalized, structured recruiting program, and the goal we put out last March was to grow 600 new advisors in the U.S. by 2029. We’re on the right path. Last year, we had a record in terms of production from our advisor recruiting.
We had some other goals, like getting 90% of our asset growth into the ultra and high net worth category and getting in the U.S. 60% of our clients to be anchored with a financial plan. These are obviously key to a healthy franchise, but they are goals we felt confident putting out publicly and being measured by.
WM: What’s your strategy for reaching these goals?
NM: With the advisor recruitment, we might need a little bit more investment in terms of growing the recruiting team, but this is kind of an extrapolation of success we’ve already had. But there are some other things in our roadmap, particularly around a product shelf to support ultra-high-net-worth clients, expanding our financial planning capabilities. We’re bringing on some new banking products, so a credit card and a mortgage product to support those clients. We have our ability to do tailored lending, commercial real estate, things like yachts for that type of segment that are very, very bespoke. We’ve got a very strong credit team that supports those types of clients.
We’ll also continue investing in technology. Our AI platform, Wealth Advisor Assist, has multiple pillars that really support that advisor. That covers everything from AI-assisted prospecting to the ability to have AI support them in meeting preparation. And these are all custom-coded AI applications, and we’ve got some of these tools in beta test right now. We’ve seen our user groups move from 40 minutes to prepare for a client meeting to five minutes. It’s able to pull through every single piece of data related to that client, every phone call that’s been transcribed, every email the client sent in, everything in the CRM system and come up with an agenda of what that FA wants to talk to that client about.
All of the things that I mentioned there would demonstrate that this is a great franchise you’d be able to join and continue to grow your practice, and just makes us a more attractive option for an FA.
WM: RBC recently expanded its Echelon platform, which connects clients with a curated network of specialty services and private wealth solutions. Can you tell me more about that platform?
NM: Echelon is the platform for ultra-high-net-worth. It’s about personalized solutions. This is financial planning, obviously investment management. It starts with the client and the family and what are their plans, but it’s a very bespoke, deep planning service that could involve estate services and trusts. We’re seeing some things come through like being asked to store premium collectibles, fine art advisory, guidance on philanthropic endeavors, all these sorts of things. So it’s really kind of a multi-practice area that you tailor around the client. This is family office services for folks who really can’t justify or have needs for a full-time family office and probably aren’t at that level of wealth. That type of support really anchors a relationship. And we’ve seen good success in the U.S., but we have the exact same success and a very well-developed program in Canada as well.
WM: On recruiting, are there certain types of advisors that you’re going after? Are there certain channels that you’re looking at?
NM: Our target is absolutely for large, experienced teams with $2 million of production and over. Last year, I think 80% of the FAs joining us were over that level of production.
We have a couple markets we are disproportionately focused on. We obviously do well in places like Minneapolis, where there’s a real hub of the history of the firm. Other markets include New York, Florida, Southern California, Atlanta and Chicago.
From a competitive standpoint, we track where the recruiting’s coming from, and it’s across the board. The value proposition that I mentioned is we’re a very advisor-focused franchise, so this is for entrepreneurial advisors who really want to own their clients and really drive their future. We provide the platform and the chassis and the compliance and the technology support, and it comes with a very entrepreneurial culture that wraps around the advisor. That is showing up really well in contrast to what some of them are experiencing where they are.
WM: Some of the big firms have been ramping up transition deals to lure larger teams. What is your strategy around these deals?
NM: We haven’t really boosted them. The reality of what the recruiting market is, we see a couple competitors willing to step out further than we do. We are absolutely not at the top end, and we have lost teams where that was their primary driver and we just were not able to get there. And some of this is just about having a discipline that needs to work for our franchise and our shareholders. But it hasn’t held us back.
WM: All of your advisors are W-2 employees. Have you thought about getting into the independent space, the RIA channel at all?
NM: We’re not doing it. Maybe we’ve had conversations, and they’re very short in the end, with why the model we have is the right model for us. There are a couple of things that give me some concern. You see others doing both, and I think that’s fine. Every firm will pick their own strategy. For us, it’s about channel conflict. Running two models is just more complex, and we don’t run that model in other regions. We don’t run it in the U.K.; we don’t run it in Canada. Our business in Asia, while small, is not an independent model either. We have lots of room to grow in the model we have, and accelerating the investment and the talent on that business is really what our focus is, and you won’t see us pivot to the independent channel.
WM: There has been some leadership changes in the U.S. wealth business, with Tom Sagissor stepping down in January. Would you talk about the new leadership structure and direction of this team?
NM: The team really starts with Michael Armstrong, who’s the CEO of the business. He’s ex-Morgan Stanley, and I would say the architect of the business and the shape and the form it is right now. Tom had played a mission critical role as a key partner with Michael the entire journey. But everybody gets to a point where it’s time for them to move to the next phase, and Tom shared that was now for him. So what we had is, we had a question of what do we think was right for us? The structure we ended with was co-heads, with existing leaders who knew the firm and knew the culture was the best thing for us. The reality was we had no intentions of making broad changes.
We really have a lot of pride in the culture, and that’s what the structure allows us to do. We’ve got two leaders with Pat Vaughan and Wally Chapman. They continue to lead a region, Pat in the East and Wally in Central. They’ve known each other for almost 15 years or so, so there’s a high degree of trust, which makes that co-head structure completely workable.
WM: A couple of weeks ago, we saw a selloff in several traditional wealth management stocks over fears of AI and automation taking over the financial advice profession. What are your thoughts on that? What is RBC doing on the AI front in the wealth management business specifically?
NM: Our views around AI started more than a decade ago. Our CEO, Dave Mackay, really put out a view that this is going to be a transformative technology, and he created Borealis, our AI lab. We’ve grown our practice for a very long time. We were recently ranked third in the world in financial services for AI capabilities. We put out a target that we will generate $700 million of benefit from our AI capabilities in the medium term, and we profiled a number of them, including one in wealth management at our investor day.
This isn’t just go get an AI tool and drop it onto your business and suddenly there’s value created. Our experience was that you needed to have AI talent who was deeply embedded with the business. They needed to understand how the business made money, what the value chains were, what the client experience was going to be about, and those partnerships took time. Once we got there, we started to see value, and we have a very nice portfolio of large at scale enterprise grade use cases we’re quite proud of. But it doesn’t just happen overnight. This is about transforming your business, and you need to start with people who can really think in a disruptive way and then re-engineer your business.
That’s accelerated, and you’re seeing that the compute capacity become more abundant, you’re seeing the cost to build some of these things really come down. For the earliest stage investor, and you think about the self-directed channel, you’re going to see AI embedded into these. There won’t be a fee for this. It’ll just make them better, and more clients will end up getting served on that. And we have that platform in Canada, and we have every expectation we’ll deliver more value to clients being able to do that.
My view is that there’s another model in the middle of that and where our U.S. wealth management business is, which is, how do you get an agentic and our planning capability into a mass affluent, massive retail client? And right now it’s not really a possibility. There are not enough planners to really penetrate large portfolios of consumers, and you’re left with a very large segment of clients who are underplanned, and there’s an advice gap. This could really start to fill that advice gap. And you see savings rates come up, and you see more families being able to meet their financial goals. I think that’s a net positive.
But as you get to the space that our business in the U.S. is in, it’s a different story. We’re focused on high-net-worth and ultra-high-net-worth clients, and these are very emotional, very complex relationships, usually involving multiple family members. Just the discovery process—sometimes it’s half therapy and half financial planning. These are not things that are easily programmable. It’s not just about providing the advice. It’s not just about digitizing documents and running algorithms to help make complex decisions. Yes, there will be tools that’ll be built to help with investment management, but you have to be able to connect that emotional human connection with the individual and the family, really come through what’s the right advice plan for them, and then you also need to be able to connect that to a set of products, and then to a client, including a digital experience.
We really think that the application is going to be where we’re focused. AI is going to be about really supercharging the advisor with better insights, making much better use of their time, and it really being a platform that our advisors use, and clients will be able to tap into that as well. But this is not about a replacement; this is about better use of advisor time, ultimately better service to clients.
