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‘Dream teams’ put wealthy clients front and centre

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Many Canadians turn to a financial advisor for help with money matters and retirement planning. But for the wealthy, the complexity of preserving, managing and passing on their wealth calls for services beyond what even the most experienced advisor can offer.

"Whether you built it or inherited it, with wealth comes responsibility and complexity," says Alan Desnoyers, vice-president and managing director at BMO Private Banking, the Bank of Montreal arm that serves high-net-worth clients. "And with complexity comes a need for more specialized services."

Among these services are trust and estate planning, tax planning, business succession and philanthropy. While it's easy enough to source these services from multiple providers, many wealthy people are choosing to work with firms that offer them in-house or have a well-established network of professionals on call.

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"People really prefer not to have five or six relationships where they're constantly wondering, 'Does my accountant know what my lawyer is doing, or does my insurance person need to be updated by my financial planner?'" says Mr. Desnoyers.

"They feel much better when they have an integrated view of their finances and don't have to manage all these relationships."

At BMO Private Banking, for instance, all clients receive banking, financial planning and investment management services. But the bank also has in-house experts in other areas, and they sometimes go above and beyond what's normally expected from financial and legal services providers, he adds.

For example, the firm's trust division provides care and lifestyle services, such as arranging regular payments of an elderly parent's household bills. BMO also works with an external concierge service. "We have a client who called us and asked for help to clean her pregnant daughter's house and get meals prepared," says Mr. Desnoyers.

At Investors Group Inc., accountants and lawyers with tax and estate-planning expertise work alongside the firm's financial planners, says Tom Van Tighem, senior vice-president for private wealth management at the Winnipeg-based firm.

Mr. Van Tighem notes that the company's tax and estate planning team is not necessarily meant to replace clients' existing professional service providers.

"A lot of people, especially business owners, have had their own business accountant and lawyer for years," he says. "We see ourselves as complementary to their team, and it's not unusual for our folks in advanced financial planning to reach out to a client's lawyer and accountant – with the client's permission, of course."

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Family offices are also increasingly stepping in to give high-net-worth individuals access to a multidisciplinary team of wealth-management professionals. These practices, which provide wealth management as well as family governance and mediation services, have grown in number in recent years as more Canadians have accumulated significant wealth.

While family offices may have advisors with experience in disciplines such as accounting or law, they're more likely to co-ordinate professional services rather than provide them in-house. This is the case at Northwood Family Office in Toronto, where about half of the in-house team have chartered professional accountant designations.

"But they're no longer practising as accountants, so when we get into detailed work such as doing a tax return or preparing a cross-border tax or estate plan, we draw on experts in public or independent practice," says Tom McCullough, the firm's chairman and chief executive officer.

Northwood's own expertise lies in identifying and resolving issues that could jeopardize a family's wealth. It might bring in a psychologist or family counsellor for help, he says.

So what's the point of working with a family office if so many of the services are rendered by external providers? "It's important to have a point person leading the strategy – someone who knows the game plan and who understands the family history and goals," says Mr. McCullough.

As an example of what can happen when no single entity is leading a wealth-management strategy, Mr. McCullough points to a will that was drafted a decade ago.

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"During this time, your business has doubled in value and you've been too busy to update your will to reflect the changes in your wealth," he says. "Whereas in our practice we review our clients' wills every three years. We sit down with them and show them their will against a flowchart of their situation."

The idea of giving high-net-worth clients one-stop access to a comprehensive range of services is also taking hold beyond the financial services sector.

At the Toronto-based law firm Borden Ladner Gervais LLP, a family wealth counsel formed three years ago brings together experts in taxes, trusts, charities, elder law, litigation and mediation.

"There are about 50 of us in the family wealth counsel, so we can immediately call on each other to ensure we're being proactive and cohesive," says Millie Chan, a lawyer and senior consultant at Borden Ladner Gervais. "When you work in different practice areas and offices you can sometimes feel a disconnect, so being part of the counsel helps us work more closely with each other and serve our clients better."

Today's high-net-worth clients are different from their counterparts from previous generations, says Ms. Chan. Globalization, increased immigration and a more mobile population have given rise to affluent Canadians with assets and beneficiaries in various parts of the world.

"These are important factors that have converged together and created needs that are very, very complex," says Ms. Chan. "As a law firm, we are making a more concerted effort to meet these needs."

Video: Money Monitor: Leaving money to a secret beneficiary (The Canadian Press)
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