Canada’s richest families often have adult children who are spectacularly gifted at one thing: spending. These extraordinary consumers, well accustomed to having their every whim met, sometimes need a stern hand to guide them into finding their own path once they hit adulthood and need more than their trust funds to get by.

This is when Anna Nyarady steps in. “From time to time, you have to call in the whole family and get all the advisors in the boardroom and you just have to lay down the law,” she says. It’s not always pleasant and it takes a delicate approach. “You have to be patient,” she says. Habits don’t change overnight. But it’s all in a day’s work for Nyarady, a certified financial planner and founder of Vanesco Management Ltd. in Vancouver.

Nyarady is one of only a handful of investment professionals serving Canada’s ultra-wealthy under what is known as the multi-family or family office model. The family office essentially acts as a family’s personal chief financial officer, handling everything from investment management, tax planning and succession to insurance and philanthropy for a small number of families.

The niche service has been available in the U.S. for decades, serving such well-known families as the Rockefellers and the Carnegies, but only recently has it become a fixture on the Canadian scene.


Nyarady doesn’t sell anything. Rather, she advises on virtually any aspect of a client’s financial life; this can range from something as banal as reviewing household expenses to helping clients understand the limitations of their trusts and overseeing real estate deals. She prides herself on being on each client’s telephone speed dial, so that when something even remotely financially important comes up, she is one of the first contacts.

Her services might be required to control the spending on an upcoming family wedding, for example. “These things tend to get out of control,” she says of nuptial celebrations. “There’s always one-upmanship.” She works with a number of professionals, including the wedding planner in some instances, to make sure that a family’s finances are well tended.

Family offices know a lot about all of the areas into which they need to delve, but turn the nitty-gritty details over to professionals, such as traditional investment advisors, lawyers and accountants.

“We’re definitely non-competitive with other advisors,” says Tom McCullough, president and CEO of Northwood Stephens Private Counsel Inc. in Toronto.

Northwood got into the market three years ago, following in the footsteps of American and European family offices. “It was a missing piece in Canada,” says McCullough, who hails from a bank-owned wealth-management background. When he saw the need for this style of investment practice in Canada, he tried to build it into the bank at which he worked, but it was not a good fit, he says: “It’s really hard to do inside a big organization.”

Northwood manages the affairs — everything relating to a client’s financial and business life, with the exception of tax returns and wills — of about 35 families worth between $5 million and $200 million. “The $200-million ceiling is when wealthy families often hire an internal staff member to handle this stuff,” says McCullough. “So, in between that range is really our sweet spot.”

On average, the firm has two types of clients: entrepreneurs and professionals. Typically, clients will approach Northwood when they are selling or have just sold a business and suddenly find themselves in a highly liquid position. “They have lots of people circling around them,” McCullough explains, adding that this can be a confusing time for clients who are accustomed to having all their money tied up in the business. “They’ve had a business plan and a CFO of their business, but now they’ve sold it and they have no business plan and no CFO of their own net worth. So, we play that role for them.”

Thane Stenner, first vice president and an investment advisor for T. Stenner Group, a division of CIBC Wood Gundy in Vancouver, decided three years ago to target this market. Like Northwood, most of the tasks for which his group is brought on board revolve around succession planning and business sales.

There is another type of client, however, he says — individuals who suddenly find themselves overwhelmed by the number of professionals working for them, but in parallel universes without any coherent strategy.

@page_break@“We’re finding a trend away from too much complexity,” Stenner says. “They want to simplify their lives.” To that end, his firm works with outside advisors, providing net-worth reporting to each client. The firm also conducts performance appraisals so clients can sleep at night, knowing that their advisors are working together in their best interest.

With few clients, it’s clear that family-office firms offer a very involved model of investment counselling. “You can’t be asleep at the wheel,” Stenner says. When a so-called “event” occurs — such as a recent situation in which Stenner and his team were called in to advise a client whose business was undergoing a hostile takeover — Stenner has to be ready with possible scenarios and outcomes for the client. Anticipation is key, he says.

Nyarady says her business often takes her out of the country — her clients don’t all live full-time in Canada — so building up a trusting relationship with other professionals is critical. If she is not available, a client’s lawyer may talk to the client and then pass the information on to Nyarady. “I’m always kept in the loop,” she says.

An important trait for multiple-family CFOs is discretion. T. Stenner Group, which manages affairs for 35 client families, each boasting at least $10 million in net worth (although, Stenner says, some are billionaires), might have to arrange an anonymous donation to a charity, for example, which takes a certain amount of finesse. “It’s not easy,” Stenner says.

Another area that requires delicate stickhandling is divorce. While Stenner’s group has handled this potentially messy situation a few times, he says, it is one issue for which his group might bring in outside help, such as a mediator, to keep the business of prominent families confidential. “A lot of these people are very private, and throwing mud in the public eye is something they want to avoid,” he says.

McCullough says a number of Northwood’s clients have gone through divorce. In fact, it is often the reason behind their need for Northwood’s services in the first place. A wife, for instance, might contact Northwood initially during divorce proceedings after she realizes that the professionals who worked for the family now work for her husband. Compounding the problem is the fact that the partner with the least investing experience tends to be the one who needs a new support team, says McCullough. “This person has no experience and suddenly they’ve lost every one of their advisors in one fell swoop,” he says. “So, we pool the whole thing together and help re-establish advisor relationships.”

Over the past five years, Richardson Partners Financial Ltd. has added a family-office component to its business, prompted by the needs of its top-tier clients, according to Mark Farris, first vice president and investment advisor at the Winnipeg-based firm. “We were getting signals from our clients saying they wanted it,” he says.


The firm has a number of in-house lawyers and accountants who act as resources for the approximately 30% of clients who are eligible for its family wealth-planning services (at least $1 million in assets). “So, we’re always kept in the loop as to what’s being discussed,” he says.

Besides, advisors had found that sending clients to outside resources would often mean losing them altogether, Farris says: “We’ve found that if we have to make referrals to an outside lawyer or outside accountants, we’ve pretty well lost the relationship at that point.”

Farris’s typical client is at or near retirement. He or she has typically sold a business or has a combination of savings and inheritance.

A situation with which Farris is currently dealing underscores the wide breadth of services family offices are expected to offer: the client, in his early 80s, has been with Richardson for 12 years. Farris is now working with the client’s adult children to address their concerns with regard to estate planning and long-term care, going so far as to research nursing facilities to determine what might work for the client down the road.

“It’s comforting that they give us a call and ask us to provide that type of advice,” he says. “That, to me, is what this business is all about.”

Farris sees family wealth planning as a tremendous growth area in the coming years. “I think demographics are going to drive that,” he says. The baby-boom generation will need more help as it ages — and not just with their portfolios, he says.

McCullough agrees that the family-office model is bound to follow the lead of the U.S. and grow even further in Canada — “Especially as we will have a huge transfer of assets from one generation to the other in the next 20 years,” he says.

The niche area can’t grow without good people, Stenner points out. “The No. 1 challenge for anybody trying to get into or gain market share in this space is personnel,” he says. “Finding the right people within a private family office group is extremely important because you’re trying to create a client experience that’s very sophisticated.”

Stenner expects his group’s 11-member team almost to double to 20 over the next three years but, in keeping with the “small is beautiful” mandate of multi-family wealth management, the group’s client roster will be capped at no more than 50 families, he says. IE