An entrepreneur, who’d spent much of his life building the family business, was struggling with the decision of whether his son should take over after he retired. It’s a common but complicated question, and one that requires specific and thoughtful expertise. So he went to Richter, a Business | Family Office.
After assessing the situation, the experts at Richter suggested a different approach. The client was encouraged to take another look at his business plan, envision the road ahead and then see if his son was the right person to lead the business down that path – or if he even wanted to.
Whatever the outcome, “at least the plan will help create the path forward and value [for] the business, even if the solution is selling it,” says Tasso Lagios, managing partner at Richter.
Business owners are always thinking about the best interests of their company and their family – and those interests often intersect. While owners might rely on a number of internal and external advisors to inform their decision making, what’s often lacking is someone who can pull it all together into a cohesive picture.
That’s why Richter takes an integrated approach to business, wealth and family interests, putting the owners at the centre of where these priorities overlap. The firm has developed a unique two-platform model – Business Advisory and Family Office – to address their clients’ connected needs, reach their long-term goals and shape their legacy for the future.
As owners grow their business, their success spurs both opportunities and complexities around their family. The experts at Richter provide advice across the four stages of the business journey: entrepreneurial, diversification, wealth creation and wealth transition.
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Each stage brings with it a range of considerations around issues like taxation, risk management, strategic planning, financial planning, family governance, estate planning, wealth management, business succession and wealth transfers. The Richter approach ensures that family and business goals are aligned.
Stage 1: Growing your business
When people are at the helm of a growing company, it’s vital to evaluate not only where they’re at today, but where their business and wealth are heading.
This is where Richter offers support via expertise in growth strategy, performance improvement and operational efficiencies. Maybe owners want to start looking into other assets or sectors for expansion.
Among the foundational elements are audit, financial reporting, tax structuring, internal controls and risk management. The goal is to start answering some big questions: what’s the plan and how do you get there?
Stage 2: Diversifying your assets
Once an enterprise has reached a certain level, owners often move into creating wealth outside the business.
“This is often new territory for business owners. They’ve been successful building and growing a business but some aspects of wealth management may be less familiar to them,” says Mr. Lagios.
Clients at this stage are prompted to consider what their wealth goals are for them and future generations.
“Then it’s really about starting to have that discussion about what it means to diversify,” Mr. Lagios says. “They should be putting the right structure in place to move money from the corporate environment into their various entities, and learn more about what it means to segregate business from other assets of the family enterprise.”
At this stage, some clients monetize parts of the enterprise and develop a dividend policy. Other family enterprises may monetize a part or the entire business, through a sale for example, and move into stage three.
Stage 3: Ensuring family wealth
Business owners and their family can accumulate a broad range of assets through stages one and two. When they do, it requires the same level of oversight and diligence as a well-run operating business – commonly referred to as the family enterprise.
The family office specialists at Richter often become more hands-on in stages three and four, asking questions that further bridge business and family interests.
“If you’re using an independent group of advisors, they won’t necessarily know your objectives on both the business and family sides,” explains Brett Miller, a partner at Richter. “Having one advisor who knows those goals, and ensures every decision or recommendation put forward is aligned to those objectives, is incredibly important.”
Stage 4: Supporting the next generation
By this point, Richter’s relationships with various family members position them to support the next generation with their business ventures, or in managing their wealth and affairs more autonomously.
Richter works with its clients to ready a wealth transition plan long before it’s needed, so that everyone involved knows what to expect when the time comes. This includes ensuring that the next generation is prepared for the next step with a tailored financial literacy program.
“It can be difficult for some clients to move on from the business they built,” says Mr. Miller. “Having an advisor who has been through this with many others in a similar situation allows us to handle this sensitive period in an optimal manner.”
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With its Business Advisory and Family Office experts working in tandem, Richter ensures that each decision is being made with both the owner’s interest and their family’s interest in mind.
Those interests demand their own ways of thinking and strategies. Those may be distinct, but what’s common in Richter’s approach is the desire to support entrepreneurial success across stages and generations, from entrepreneurial beginning to diversification, to wealth creation and transition.
That’s what the client who walked into Richter’s office looking for succession planning advice received: the insight he needed to help his business and family move ahead.
“Being able to pivot between technical and solutions-oriented advice to the more emotional part of a family business or family wealth transition is what differentiates us,” says Mr. Lagios.
To learn more about how to chart the right growth strategy for your company, join a webcast on October 24th as part of The Globe and Mail’s lifecycle of a business series. You’ll gain insight into the common challenges associated with buying a business, the handover process and how to mitigate risk before and after purchase. Click here to register for the free virtual event.
Advertising feature produced by Globe Content Studio with Richter. The Globe’s editorial department was not involved.