Performance figures for each account are calculated using time weighted rate of returns on a daily basis. The Composite returns are calculated based on the asset-weighted monthly composite constituents based on beginning of month asset mix and include the reinvestment of all earnings as of the payment date. Composite returns are as follows:

Managing Wealth Requires Agility

By Brenda Jacobsen

Source: Business In Vancouver

Administering family business finances calls for a diverse skill set of IQ, EQ, sensitivity and creativity.

Today’s top wealth management advisers have discovered that it takes more than savvy investment knowledge, analytical skill and lofty credentials to attract and retain high-net-worth prospects.

They also need high emotional intelligence to be able to manage the complex relationships between family-owned businesses and the families that own and control these businesses.

“It’s much more than balance sheets and share structures. It’s about family dynamics, relationships and the founder’s vision. It’s about legacy,” said Nicola Wealth Management adviser Murray Neilson.

Neilson, a Sauder School of Business Family Enterprise Advisor (FEA) student, said the FEA program has made him more curious and has equipped him with cutting-edge tools to bring often complicated and sensitive family enterprise issues to the table, which has made a difference to his clients.

“People are looking for another alternative to manage their wealth and investments,” said Neilson. “When we add the Sauder School tools to the sophisticated services we offer, I can become an even more trusted financial concierge for my clients.”

He added that with family business, “The commitment is often higher, because you’ve got ‘skin’ in the game. It’s your family and your name’s on the door. One of the positive characteristics is that you care a lot more.”

According to the Sauder School of Businesses, Canadian families and family-owned businesses provide 60% of the GDP, create 70% of new jobs and generate annual revenues of $1.3 trillion. And while one-third of family business leaders will retire in the next five years, only 32% have a succession plan.

The challenge for wealth managers is to be agile enough to adopt new strategies in the succession-planning process to guide families to a successful future in an era poised with the biggest amount of wealth to transfer from one generation to another.

“One question which I really like using that opens people up is, What role did money play as you were growing up?” Neilson commented.

“When you get into family businesses, they talk about what their dad was like, what their mother was like, what the in-laws thought, what the people at church and the neighbours thought. My dad would drive an old car to work, because he didn’t want his employees to see him drive a Mercedes.”

Ian Macnaughton, of Macnaughton and Ward, is another FEA graduate and clinical counsellor who works with family businesses in his own private practice. A second-generation family business owner, he said that most succession plans don’t often address the human or social aspects together with its financial assets.

“The key is to develop structured family meetings, encouraging family councils with non-family members such as spouses, because they have important input and concerns to bring forward,” Macnaughton said.

Macnaughton, who got his first taste of family business at age 10 when his father started Macnaughton Realty and Assurance more than 60 years ago, said that the family dynamics changed very quickly when he and his mom entered the business.

“Business is complex enough, but when you add family, it can become stressful and challenging. You have to find a way to keep the family intact and keep family issues from intruding on the business.”

Macnaughton admitted that it was a hard transition when his father died at age 20, and he and mother were left to make some important decisions on who would stay in the business – talks they weren’t ready for.

“It’s important to be clear on what role everyone is in and what contribution they make.” Macnaughton said. “What’s fundamental is the relationship you have with each other, identifying and making it safe to bring issues out.”

Tracey Cambridge, president of Global Pacific Financial Services, of which Macnaughton & Ward Financial Services is a division, also learned to address family wealth management from both sides of the table.

Fresh out of school, Cambridge joined her father’s company in 1985 and worked her way up the company ladder, while watching her dad manage operations of their family-owned business for more than 20 years.

“Working with clients and financial advisers offering insurance-based solutions for family-based businesses, we’ve discovered that different generations have specific goals, objectives and timelines,” said Cambridge. “Communication is the key to get those across to determine what’s changed, if you’re on target, or perhaps need to be revised due to market conditions, health or transitions in the family environment or business.”

She emphasized. “Most of all, the business has to be run as a business. As long as there are clear lines of communication, respect and nurture, from all aspects, however many family members are involved, it can be a very rewarding and successful business.”