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Family enterprises matter: with 880,000 business families representing 60 per cent of Canada’s GDP, they play a significant role in the Canadian economy.

With such an important contribution, it stands to reason that family businesses receive advice that is tailored to their specific needs, says James Burton, chair of the Family Enterprise Xchange (FEX) Foundation.

Business families often have access to the best professional advice relating to taxes, accounting, estate planning or use of trust matters, but all too often the broader issues and implications for the family’s long-term goals do not receive enough consideration, believes Mr. Burton.

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This can lead to scenarios he’s seen far too often – family bonds are broken, family members don’t talk to each other and, in extreme cases, resort to lawsuits to resolve disputes. Mr. Burton recently spoke with a client in a situation like this.

When I asked my client about his main goal, for example, he replied that he wants his family to be whole.

— James Burton, Chair of the Family Enterprise Xchange (FEX) Foundation

“He was frustrated because he hadn’t talked to his brother in over 20 years, since his father had chosen to give the small business to my client,” says Mr. Burton. “Now he couldn’t figure out how to best involve both his daughter and his son in the business.

“I am not suggesting that the right advice is going to solve everything, but we do know that outcomes can be improved when business families get advice that looks at family dynamics as well as business goals,” he adds.

Mr. Burton sees two obstacles to giving effective advice to business families: linear training and transactional thinking.

“People are specialized in tax laws, accounting, estate planning or investments, for example, but for business families, their aspirations are often more nuanced. They shouldn’t be making decisions based on technical rules or details alone,” he explains. “When I asked my client about his main goal, for example, he replied that he wants his family to be whole.”

Another challenge is transactional thinking, says Mr. Burton. “When we are dealing with fee-based or commission-based advice, it typically focuses on solving a very specific problem – so the approach is very narrow.”

He suggests that family enterprise advisers go from transactional thinking to relationship thinking. “The focus should be on understanding the family’s values and goals and what they want to accomplish,” says Mr. Burton. “The adviser should be aware of how the family wants to be involved in the business in addition to integrating the views of shareholders and management.”

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FEX aims to provide family enterprises with the knowledge and awareness they need for keeping their businesses thriving and their families together – it is also committed to giving advisers the tools for delivering not just professional and technical advice but also to consider family dynamics for the best possible outcomes.

Response to the year-long Family Enterprise Advisor program has been very positive, says Mr. Burton. “People see it as a powerful platform for advisers who want to work with business families. They learn about family enterprise dynamics and integrate this knowledge into their process – it makes a huge difference. We believe business families will see the value of this designation and make advisers coming through the program the advisers of choice for their family.”

Mr. Burton adds that it is a critical time for family businesses in North America because a significant wealth transfer – estimated in excess of a trillion dollars – is expected in the next decade. “We are at a crossroads where successful intergenerational transitions are very important, and the Family Enterprise Xchange Foundation is working to generate research that can help us better serve family businesses and the adviser community working with them.”


Produced by Randall Anthony Communications. The Globe’s editorial department was not involved in its creation.

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