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NEWS ABOUT THE SALE OF MD FINANCIAL MANAGEMENT TO SCOTIABANK®

More information about the sale

Who made the decision to sell MD Financial Management?

The CMA, as the ultimate owner of the MD Group of Companies, made the decision to sell MD Financial Management.

Why did the CMA sell MD?

MD has been an industry leader on many fronts, but the competitive landscape is changing in the financial services industry and it was determined that the time was right for MD to partner with a large bank to ensure its continued success. Also, over the years, CMA members have asked for improved banking services. MD wants to be able to continue to evolve to meet its clients’ financial needs and life goals. The sale was about finding the best way to do that—while retaining the core MD values clients rely on.

Why weren’t CMA members or MD clients consulted before the decision was made?

Unfortunately, the CMA was not able to consult with MD clients or CMA members ahead of time because public knowledge would have destabilized MD, its clients and employees. Also, Scotiabank is a publicly-traded company and the nature of this transaction required confidentiality.

Aren’t CMA members the owners of MD Financial Management?

The CMA is the ultimate owner of the MD Group of Companies and, as such, had the authority to negotiate and approve the sale. The CMA will be able to answer any specific questions you might have about MD’s ownership structure.

How much was MD Financial sold for?

MD Financial Manage was sold for $2.585 billion. The sale is subject to regulatory approvals and closing conditions, and the transaction is expected to close in fiscal Q4 2018.

Who gets the proceeds of the sale?

The sale was negotiated between the CMA and Scotiabank, and all proceeds go to the CMA as MD Financial Management’s ultimate owner.

What will the CMA do with the money?

The CMA will be will be working closely with members to map out how the funds can best be used to effect change and create programs that support physicians and better health. More information about the sale and the CMA’s decision-making process can be found on the CMA website.

Did anyone receive a bonus because of the acquisition?

No financial incentive from Scotiabank was paid to MD Management executive officers or board members.

Was the sale driven by under-performance or other financial issues at MD?

No. MD Financial Management is a strong and successful business, which was why there was such a high level of interest in the company and the CMA received several competitive offers for MD from leading Canadian financial institutions.

How and why was Scotiabank® selected as the buyer?

A comprehensive process was undertaken to identify the best and most suitable acquirer for MD. In selecting Scotiabank®, the CMA Board was focused on securing a strong future for MD and its clients, and prioritized wealth-management performance, client service, alignment of vision, respect for employees, and ongoing support for the CMA’s future direction.

What has Scotiabank® committed to as part of this acquisition?

Scotiabank® has committed to:
  • Preserve the independent, non-biased, and client-centric approach of MD to financial advice.
  • Expand the breadth and depth of specialized financial advice for the physician community being offered through MD.
  • Deliver on a complete wealth management offering that addresses the entirety of a physician’s life – their family, their business and their future.
  • Partner with the CMA to deliver on its 2020 vision, investing in joint initiatives to support a vibrant profession and a healthy population.

What was the process for the sale?

A comprehensive process was undertaken to identify the best and most suitable acquirer for MD. In selecting Scotiabank, the CMA Board was focused on securing a strong future for MD and its clients, and prioritized wealth-management performance, client service, alignment of vision, respect for employees, and ongoing support for the CMA’s future direction. More information can be found on the CMA website.

How many offers did the CMA board receive? Who were the other bidders?

Due to the confidential nature of the process, we cannot disclose the details of the other bids. We can tell you that several competitive offers were received for MD from leading Canadian financial institutions.

Did the CMA Board take the highest offer price?

Due to the confidential nature of the process, we cannot disclose the details of the other bids. We can tell you that a fair offer price was only one of many considerations in the selection process. In selecting Scotiabank®, the CMA Board was focused on securing a strong future for MD and its clients, and prioritized wealth management performance, client service, alignment of vision, respect for employees, and ongoing support for the CMA’s future direction.

Is the transaction subject to regulatory approvals?

The sale is subject to regulatory approvals and customary conditions. We expect the sale to close in Q4 of 2018. Scotiabank® will follow the approval process and will work with regulators to ensure their requirements are met in as efficient and timely a manner as possible.

What the sale means for MD clients

What does this sale mean for me as a client?

The sale is good news for clients. Becoming part of the Scotiabank® family will enable MD to retain all the aspects of our organization that make us unique, while delivering even more value to all of Canada’s physicians and their families. MD will function as a distinct, stand-alone brand within Scotia Wealth Management®, stay true to its core mandate and continue to operate with physicians at the heart of every decision it makes. MD’s staff, advisory and management teams will remain in place, and physicians and their families will continue to enjoy the independent, objective and client-centric financial advice and outstanding service they have come to expect from MD.

Moving forward, MD will be able to complement its existing products and services with the robust suite of category-leading banking products and services delivered by Scotia Wealth Management® and Scotiabank—and deliver even more value. Additionally, over time, Scotiabank intends to grow MD’s suite of services to meet more of the needs of physicians and their families at all stages of their lives and careers.

Will my assets now be managed by Scotiabank®?

No, your assets will continue to be managed by MD and MD will operate as a distinct, stand-alone brand within Scotia Wealth Management®.

Will my personal information be shared with Scotiabank after the sale closes?

After the sale closes, Scotiabank will become an MD affiliate. All MD clients have expressly consented to the MD Privacy Policy, which permits MD to share information with affiliates for certain purposes and, post-sale, MD may share client information with Scotiabank for these purposes including to facilitate back-office administration. MD has always shared information with affiliates and provided clients with choices about opting-out of such sharing as described in the MD Privacy Policy.

We will respect the wishes of any clients who tell us that they do not want us to share their personal information with Scotiabank for marketing purposes. If you would prefer us not to share your personal information with Scotiabank for marketing purposes, please contact your MD Advisor or the MD Trade Centre at 1 800 267-2332 (Monday to Friday, 8 a.m. to 8 p.m. ET).

Please be assured that nothing changes in terms of the safety and security of your private information. After the sale closes, MD will operate as a distinct, stand-alone brand within Scotia Wealth Management® and be subject to the same rules and regulations regarding clients’ assets and private information as it was before the sale.

Does the sale change how safe and secure my money is?

Nothing changes in terms of the safety and security of your money. MD will operate as a distinct, stand-alone brand within Scotia Wealth Management® and be subject to the same rules and regulations regarding clients’ assets as it was before the sale.

Will there be any changes to my fees or the MD fee structure?

We do not anticipate changes to MD’s fees or fee structure as a result of this acquisition. In fact, Scotiabank® is currently examining preferred pricing options as well as special products and services designed to meet the banking needs of physicians and their families at all stages of their lives and careers.

As a client, will I notice anything different?

MD will operate as a distinct, stand-alone brand within Scotia Wealth Management® and we expect the transition to be seamless for MD clients. MD will be able to retain all the aspects of our organization that make us unique, while delivering even more value to all of Canada’s physicians and their families. Scotiabank® is firmly committed to preserving MD’s unique physician-specific approach to financial services. MD will stay true to its core mandate and continue to operate with physicians at the heart of every decision it makes. MD’s staff, advisory and management teams will remain in place, and physicians and their families will continue to enjoy the independent, objective and client-centric financial advice and outstanding service they have come to expect from MD.

Moving forward, we expect to be able to deliver even more value to our clients. Becoming part of the Scotiabank family will enable us to complement our existing products and services with the robust suite of category-leading banking products and services delivered by Scotia Wealth Management and Scotiabank. Additionally, over time, Scotiabank intends to grow our suite of services and expand the breadth and depth of the specialized financial advice offered by MD, enabling us to meet more of the needs of physicians and their families at all stages of their lives and careers.

Will my MD advisor, portfolio manager, specialists and/or any of my other financial support team change?

We expect that your MD Advisor, Portfolio Manager, specialists and other members of your financial support team will stay the same. This means that you will continue to receive the same physician focused, high-quality, independent, objective and client-centric financial advice and outstanding service and support from MD.

Do I need to do anything differently as a result of this change in ownership?

No. MD will operate as a distinct, stand-alone brand within Scotia Wealth Management® and we expect the transition to be seamless for MD clients.

I’m a client of both MD and Scotiabank. How does this change things for me?

It doesn’t change anything. As a client of both MD and Scotiabank, you can choose whether you want to continue to deal with your MD Advisor and your Scotiabank representatives, or make changes. Please talk to you MD Advisor to discuss your specific situation.

I’m an MD client who’s also a client of National Bank. Will I have to switch to Scotiabank for my banking moving forward?

You’ll continue to be able to choose the banking products you wish to use from the bank(s) of your choice and you can choose to stay with National Bank, if you wish to. However, moving forward, we do expect to be able to deliver even more value to our clients by complementing our existing products and services with the robust suite of category-leading banking products and services delivered by Scotia Wealth Management and Scotiabank. We expect to have more details about this soon. If you currently have a SRLOC loan with MD and National Bank, the terms of your SRLOC loan will not change. If you have any specific questions about your National Bank products, please contact your National Bank branch directly.

Will my accounts change again? (in some cases, they just did as part of MDFS)

We do not expect a need for accounts to change or for clients to re-sign any documentation as a result of the acquisition by Scotiabank.

I chose MD Financial Management because I didn’t want to invest with a traditional financial institution. Why should I stay with MD now that it’s been sold?

At MD, we believe that the acquisition by Scotiabank brings advantages for MD clients because we will be able to retain all the aspects of our organization that make us unique, while delivering even more value to all of Canada’s physicians and their families. Scotiabank is firmly committed to preserving MD’s unique physician-specific approach to financial services and MD will function as a distinct, stand-alone brand within Scotia Wealth Management®. MD will stay true to its core mandate and continue to operate with physicians at the heart of every decision it makes. MD’s staff, advisory and management teams will remain in place, and physicians and their families will continue to enjoy the physician focused, independent, objective and client-centric financial advice and outstanding service they have come to expect from MD.

Now that it’s been sold to Scotiabank, how will staying with MD be any better than simply investing with Scotiabank or one of the other big banks?

Scotiabank is firmly committed to preserving MD’s unique physician-specific approach to financial services and MD will function as a distinct, stand-alone brand within Scotia Wealth Management®. MD will stay true to its core mandate and continue to operate with physicians at the heart of every decision it makes. We believe that the acquisition by Scotiabank brings only advantages for MD clients as we will be able to retain all of the aspects of our organization that make us unique, while delivering even more value to all of Canada’s physicians and their families.

MD Advisors work continue to on salary not commission, and will not be required to sell Scotiabank products to MD clients. MD’s staff, advisory and management teams will remain in place, and we expect that clients’ MD Advisor, Portfolio Manager, specialists and other members of their financial support team will stay the same. That means clients will receive the same independent, objective and client-centric financial advice and outstanding service they’ve come to expect from MD.

Moving forward, we’ll be able to add to our full suite of products and services—and deliver them across multiple channels—while still providing the objective advice and deep knowledge that our clients have come to expect. Additionally, over time, Scotiabank intends to grow our offerings and expand the breadth and depth of the specialized financial advice offered by MD. This will allow us to meet more of the needs of physicians and their families at all stages of their lives and careers. Also, as of June 1, 2018, MD’s services are available to all Canadian physicians and their families—not just CMA members—broadening access to the entire medical profession.

MD is my family’s future and my retirement. Where is the win for me with the sale of MD to Scotiabank?

MD has been an industry leader on many fronts and we want to continue to evolve our offer to meet the financial needs and life goals of all physicians and their families. Becoming part of the Scotiabank family will enable us to enhance our full suite of products and services, across multiple channels, while still providing the objective advice to which we’ve always committed. This next phase on our journey will enable us to deliver even more value to all of Canada’s physicians and their families.

Give me three reasons why I should stay with MD

  1. As part of the Scotiabank family, MD will be the same only better. We’ll stay true to our core mandate and continue to operate with physicians at the heart of every decision we make. We’ll be able to retain all of the aspects of our organization that make us unique, while delivering even more value to all of Canada’s physicians and their families.
  2. MD Advisors will retain their independence, continue to work on salary and not commission, and not be required to sell Scotiabank products. This means that you’ll continue to receive the independent, objective and client-centric financial advice and outstanding service you need to meet your unique financial goals.
  3. Moving forward, we expect to be able to deliver even more value to our clients. Being part of the Scotiabank family will enable us to complement our existing products and services with the robust suite of category-leading banking products and services delivered by Scotia Wealth Management and Scotiabank. Additionally, over time, Scotiabank intends to grow our suite of services and expand the breadth and depth of the specialized financial advice offered by MD, enabling us to meet more of the needs of physicians and their families at all stages of their lives and careers.

Will anything change about how I contact my MD Advisor or someone else at MD or how I visit the MD website?

We have updated our website and email addresses. Our website has been updated to md.ca, and our email addresses are now employee.name@md.ca. Please update your bookmark to point to our new home page and update your address book or “safe list” to include the new email address(es).

What the sale means for MD’s products and services

Will I continue to have access to same investment products and services, or will I be limited to those offered by Scotiabank®?

MD’s clients will continue to have access to the same investment products and services they had before the sale. MD Advisors will continue to work on salary not commission and will not be required to sell Scotiabank products to MD clients. That means clients will receive the same physician focused, independent, objective and client-centric financial advice and outstanding service they’ve come to expect from MD.

Moving forward, we expect to be able to deliver even more value to our clients. Being part of the Scotiabank® family will enable us to complement our existing products and services with the robust suite of category-leading banking products and services delivered by Scotia Wealth Management and Scotiabank. Additionally, over time, Scotiabank intends to grow our suite of services and expand the breadth and depth of the specialized financial advice offered by MD, enabling us to meet more of the needs of physicians and their families at all stages of their lives and careers.

One of the reasons I chose to invest with MD is because I trusted that the advice my MD Advisor gave me was independent and objective—and was not swayed by the need to push a big bank’s products regardless of whether that was what was best for me. Will this change now that Scotiabank owns MD?

No. MD Advisors will retain their independence, continue to work on salary and not commission, and not be required to sell Scotiabank products. This means that you’ll continue to receive the independent, objective and client-centric financial advice and outstanding service you need to meet your unique financial goals.

How will the MD and MDPIM funds and pools be affected?

We do not anticipate any immediate changes to the MD Funds or MDPIM pools. Over time, we will look to leverage the capabilities of Scotiabank, where appropriate, while continuing to maintain an objective approach to managing MD Funds and Pools.

How does the sale affect my recent decision to invest in the MD Platinum Global Private Equity Pool?

The acquisition by Scotiabank does not change the nature of your MD Platinum Global Private Equity Pool investment. BlackRock will continue to support the Pool. MD’s staff, advisory and management teams will remain in place. MD Financial Management will operate as a distinct, stand-alone brand within Scotia Wealth Management® and you’ll continue to receive the independent, objective and client-centric financial advice and outstanding service you need to meet your unique financial needs. Scotiabank has a solid track record of maintaining the independence of organizations that have joined the Scotiabank family (such as Tangerine).

How does the acquisition by Scotiabank affect me and the MD Signature service?

MD, it remains business as usual. Scotiabank is firmly committed to preserving MD’s unique physician-specific approach to financial services and appreciates the in-depth knowledge of our highly skilled staff. MD will operate as a distinct, stand-alone brand within Scotia Wealth Management® and MD’s staff, advisory and management teams—including the MD Signature Private Wealth Strategy Team—will remain in place. Similarly, we expect your MD Advisor, Portfolio Manager, specialists and other members of your financial support team to stay the same.

Unbiased investment advice is central to Scotia Wealth Management’s Total Wealth approach and MD Advisors will retain their independence, continue to work on salary and not commission, and not be required to sell Scotiabank products. This means that you’ll continue to enjoy an enhanced level of comprehensive advice and customized service that simplifies your financial affairs, along with the expertise and support of the MD Signature Private Wealth Strategy Team.

What will happen to MD’s existing fund managers?

We do not anticipate any immediate changes to MD’s fund managers.

Will MD continue to support MD’s Donor Advised Funds?

Yes. MD will continue to support the MD Donor Advised Funds.

What the sale means for MD

What happens to MD Financial Management now?

It’s business as usual at MD Financial Management. MD will operate as a distinct, stand-alone brand within Scotia Wealth Management® and MD will continue to operate with physicians at the heart of every decision. MD’s staff, advisory and management teams will remain in place and we expect that clients’ MD Advisor, Portfolio Manager, specialists and other members of their financial support team will stay the same. MD Advisors will continue to work on salary not commission and will not be required to sell Scotiabank products to MD clients. That means clients will receive the same independent, objective and client-centric financial advice and outstanding service they’ve come to expect from MD.

How does MD’s leadership team feel about MD being sold?

MD’s Board and senior leadership believe that the acquisition by Scotiabank® brings advantages for MD clients as we will be able to retain all the aspects of our organization that make us unique, while delivering even more value to all of Canada’s physicians and their families. MD will function as a distinct, stand-alone brand within Scotia Wealth Management®, and MD will continue to operate with physicians at the heart of every decision. MD Advisors will continue to work on salary not commission and will not be required to sell Scotiabank products to MD clients. That means clients will receive the same independent, objective and client-centric financial advice and outstanding service they’ve come to expect from MD.

Will Scotiabank® merge the MD and Scotia Wealth Management® advisory teams?

At this time, there are no plans to merge the two advisory teams. Scotiabank® is firmly committed to preserving MD’s unique physician-specific approach to financial services and appreciates the in-depth knowledge of our highly skilled staff.

Who will lead MD Financial Management after the acquisition?

Following the acquisition, MD will continue to be managed by its current management team led by Brian Peters, MD’s President and CEO. Brian will report to Alex Besharat, Senior Vice President of Scotia Wealth Management®.

Were any staff let go from MD Financial Management as a result of this acquisition?

No. Scotiabank® is firmly committed to preserving MD’s unique physician-specific approach to financial services and appreciates the in-depth knowledge of our highly skilled staff. MD staff and the management team will remain in place.

Will the acquisition by Scotiabank change MD’s relationship with Qtrade?

The nature of MD’s relationship with Qtrade and the MD Direct Trade service remains the same. MD’s staff, advisory and management teams will remain in place and MD will operate as a distinct, stand-alone brand within Scotia Wealth Management®.

What about locations where MD shares office space with a partner, such as a PTMA?

Partnerships with the PTMAs remain of utmost importance. MD office space will not immediately be changing and where we currently co-locate with a PTMA, we will continue to do so. The MD head office will remain in Ottawa.

What the sale means for medical students and residents

How will the sale of MD be advantageous to medical students and residents?

Students often need a full suite of banking services, including student loans, lines of credit and mortgages. Becoming part of the Scotiabank® family will enable MD to deliver an enhanced range of services for students, residents and physicians in their first five years of practice. If you currently have a SRLOC loan with MD and National Bank, the terms of your SRLOC loan will not change.

What the sale means for physicians who aren’t CMA members

With the change in ownership, will MD services still be limited to CMA members?

No, as of June 1, 2018, MD’s services will be available to all Canadian physicians and their families, broadening access in support of the entire medical profession.