If there is a single theme that pervades the long and distinguished history of Montreal investment dealer MacDougall MacDougall & MacTier Inc., it is the importance of keeping it in the family.

In the years since its inception more than 150 years ago, there has always been a MacDougall in the firm. Donald Lorn MacDougall, who was among the first stock brokers in Montreal in the 1840s, launched Montreal’s first stock brokerage firm in 1844 along with John Glass. Shortly thereafter, MacDougall was joined by his brother, Hartland S. MacDougall, making it a family affair.

The two MacDougall brothers played a key role in laying the foundation for the transition of the Board of Brokers into the Montreal Stock Exchange in 1872, establishing a market at a time when Montreal was a growing city in a very young country. The MacDougalls played key roles in the exchange’s development; Lorn was its first chairman and Hartland S. was its third.

A MacDougall nephew, Hartland B., who made his name with a competitor and won two Stanley Cups with the Montreal Victorias, joined the family business in 1921. He brought an unrelated MacDougall, Robert, into the team to form MacDougall & MacDougall — or 2Macs as it then became known.

“Hartland B. MacDougall went right through the Roaring ’20s, the Great Depression, the Second World War,” says 3Macs chairman Bart MacDougall in Toronto. “Then, my father came into the firm — that’s Hartland C. MacDougall, who’s known as Tommy MacDougall — in 1928, and he survived right through until about 25 years ago.”

Tommy MacDougall presided over the firm while it grew; first, when it joined forces with MacTier & Co. in 1960, and later, when both organic growth and acquisitions lead to the creation of offices in Toronto and Quebec City. Tom Price took over from his uncle Tommy as chairman in 1975. In 1996, Bart MacDougall stepped into the office his father had filled when Price suddenly passed away.

Today, the firm has more than 70 advisors and 125 employees in five cities: Montreal, Quebec City, Toronto, London, Ont., and, most recently, Kingston, Ont. It also has some $3.8 billion in assets under management and Tim Price, son of Tom, is at the helm as CEO. And while there are still MacDougalls playing key roles and learning the ropes, the MacDougall clan is not the family that Bart MacDougall has in mind.

“In today’s firm, we have a number of family relationships that run right through the firm,” he says. “There are as many as 15 families represented here by more than one person — mother/son, father/son, father/daughter and husband/wife. Nepotism runs pretty deep in this firm and it is actually something we are proud of.”

The “keeping it in the family” theme also breeds loyalty and continuity. Says Price: “Four of our people have 50 or more years with the firm and 60 people have been with us more than 15 years. These are things that are important to us.

“Having a long history breeds a very strong culture of service to our clients,” Price adds. “We have seen a lot of ups and downs and understand long-term thinking.”

So, ultimately, the families on Bart MacDougall’s mind are the families that are 3Macs’ clients. “The family I’m talking about are the clients — serving families in their entirety. You have a client, be it a man or a woman; if the other party isn’t involved, you want the other one involved, and you want to get their children involved.”

Getting clients’ families involved is a continuation and variation of the “keeping it in the family” theme. In fact, some of 3Macs’ client families have been around three and four generations. Says MacDougall: “Our business has always been serving families. Going right back to the beginnings of the firm, we served families who needed to have their investments managed.”

In the course of such a long history, evolving so that the firm meets these clients’ needs has been of paramount concern. “In the early days we were a brokerage,” MacDougall says. “Now, the business has changed in that we are more discretionary managers than we used to be.”

Although 3Macs still does some commission work, it is, for the most part, now a fee-based business.

@page_break@3Macs is unusual in that it is wholly owned by its employees. Also, it does not take securities positions; it rarely does underwriting; and margin positions are few and far between and very strictly monitored.

3Macs also does all it can to keep its overhead costs to a minimum. This means the brokerage itself is less exposed to the volatility of the market than most firms on the Street, which bodes well in this climate. However, it also means that 3Macs’ results are purely reflective of how its clients are doing. “We like to think that we do well when our clients do well,” MacDougall says. “We don’t do so well when our clients are not doing so well.”

As such, 3Macs’ focus on its long-term goals will serve its clients and, in turn, the firm well throughout the current market volatility. “We tell our clients to diversify their portfolios,” Price says. “We tell them to focus on quality, take a long-term view and don’t react to short-term market gyrations.”

In order to provide these clients with more complete advice, 3Macs is looking for opportunities to integrate financial planning into its practice. “We are still at a walking stage,” MacDougall says.

Even though 3Macs’ brokers have long acted more as financial advisors than stock jockeys, 3Macs is bringing in outside expertise in financial planning to educate both advisors and clients.

“To some extent, it’s at our peril that we don’t offer more planning products,” MacDougall observes. The focus has been on tax, estate and insurance planning, to complement the investment services that its advisors already offer. These products will remain ancillary to the bigger picture: working in the clients’ best interests.

“I was one of the people that needed to be convinced,” concedes MacDougall of the firm’s expansion into a full-service offering. But, ultimately, it was his clients who explained that they needed these services and products — and that they would buy them elsewhere if they had to.

In reply to concerns that financial planning will compete with the core business, MacDougall argues that “planning products need not cannibalize assets; planning can build on assets under administration.”

If the move toward including financial planning demonstrates anything, it’s that 3Macs does not rest on its laurels. And although the firm is looking to its past this year as it celebrates a milestone — the 150th anniversary of its founding — its focus is turning to the future and on how best to serve its clients today and in the years to come.

“It’s great having 150-plus years of tradition,” says Price. “But clients want to know what we are doing for them today and in the future. We have to be sure that we are offering our clients the services that will let them prosper.”

Despite any potential changes, there is one thing that will never change at 3Macs: the importance of keeping it in the family. In fact, there is another generation of MacDougalls waiting in the wings, including Bart’s son, David. IE