Wealth managers seek to help Indigenous communities balance spending and investing settlements

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As Indigenous groups prepare to receive significant financial settlements from the federal government over long-standing legal claims, T.E. Wealth Indigenous Services is helping First Nation communities navigate between competing pressures to preserve wealth for the next generation while upgrading infrastructure and responding to educational needs.

There are about 627 outstanding First Nation claims that are actively under assessment or being reviewed by the Canadian government, according to data published by Crown-Indigenous Relations and Northern Affairs Canada. Known as “specific claims,” they deal with past wrongs against First Nations, including the administration of land and the fulfilment of historic treaties and other agreements.

Another 675 specific claims have already been settled through negotiations – with the most recent 264 claims resolved for close to $8.9-billion in compensation.

Those totals do not include last year’s $20-billion federal settlement over discrimination in the Indigenous child-welfare system and a recent $10-billion proposed settlement between the federal and Ontario governments and the 21 Robinson Huron First Nations over unpaid annuities, both of which are being handled through separate out-of-court processes.

Managing windfall payments is a delicate balancing act that can often be overwhelming for First Nation communities, says Kain Big Canoe, associate vice-president of Indigenous services at T.E. Wealth Indigenous Services, a division of Canadian Western Bank’s wealth management arm that specializes in providing financial advice to First Nations.

“Often, this is a very exciting time for a community who has been deserving of this money for such a long time,” Mr. Big Canoe said in an interview with The Globe and Mail. “But it can also be a very daunting task to be handed $100-million, along with the responsibility on how best to use the money that will benefit the entire community.”

T.E. Wealth Indigenous Services was founded as an independent business within T.E Wealth in 1997 by Jack Jamieson and Steven Belchetz. It was acquired by Canadian Western Bank in 2020, and today works directly with more than 50 First Nations, Métis and Inuit communities across Canada.

Unlike some companies that collect fees based on the amount of money they manage, or for products they sell, T.E. Wealth Indigenous Services does not manage any money in-house or sell any investment products. It charges an annual fee for investment and trust management advice based on the amount of assets held in the trusts they advise on.

In return, T.E. Wealth Indigenous Services works with an Indigenous community’s chief and council as well as appointed trustees to advise on how to set up a legal trust to protect settlement monies.

Once a trust is created, T.E. Wealth Indigenous Services continues to advise First Nation members on how to manage the trust, and also provides continuing education, governance and investment policy development. It will also help communities search for investment managers and monitor the overall performance of the trust.

In recent years, some of Canada’s largest institutions have begun to expand their banking and advice services for Indigenous communities as financial settlements bring a demand for financial advisory and wealth-management services to First Nations.

But, Mr. Big Canoe said, unlike traditional wealth managers that have business models linked to management fees, the niche advice model his firm offers to First Nations is only available from a handful of advisers in Canada.

The goal, Mr. Big Canoe said, is to ensure First Nation communities preserve their wealth for as long as possible.

“We have seen some land claims where the community have paid out the settlement instantly in lump sum payments – and then those communities are left with zero reserves to build or pave a road. It’s unfortunate when we see that happen,” he added.

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Now, as the government prioritizes its work to resolve and finalize outstanding claims, the Department of Indigenous Services’ work with First Nation partners is moving at an accelerated pace, said Matthew Gutsch, a department spokesperson.

For example, he said, between April 1, 2022, and March 31, 2023, 56 claims were resolved for $3.5-billion.

It is a pipeline that Mr. Big Canoe said is rapidly growing as more communities get closer to settlement dates.

But building trust with a third party to handle financial affairs is difficult for communities that have experienced extreme financial hardships after decades of historic treaties not being fulfilled by the federal government.

Mr. Big Canoe, who is member of the Chippewas of Georgina Island First Nation, spends a lot of time travelling across the country speaking directly with First Nation communities that have either settled claims or have claims that are still under assessment. Many are looking for advice on how to prepare in advance, sometimes as much as two years prior to a settlement. Other communities, particularly those that have been managing funds for decades, look to share best practices, as well as missteps.

The Chippewas of Rama First Nation first met with T.E. Wealth Indigenous Services founders more than 17 years ago when the community began to negotiate land settlements.

In 2012, it was part of the Chippewa Tri-Council settlement claim with the federal government for the Coldwater Narrows Land. It was one of the largest specific claims settlements in Canadian history at that time and provided Chippewas with an $80-million settlement.

In addition, the community has received more than $140-million for a land deal with Casino Rama and over $100-million in the Williams Treaties settlement of 2018.

When the community received its initial funds, Rick Morano, chief financial officer of finance for Chippewas of Rama First Nation, wanted to partner with professionals who could provide training and education on investment planning to members, as well as provide information on how to implement an investment policy.

“It was a difficult task as we didn’t know if what certain investment managers were telling us was true and we had no way of verifying the predictions we were being told of what we could earn,” Mr. Morano said in an interview.

Initially, the community tried to set up an investment plan in-house but quickly realized it was cumbersome. With no proprietary products to sell, T.E. Wealth Indigenous Services stood out to Mr. Morano as a firm that could provide unbiased advice.

“We know there’s no incentive to go this way or go that way or push any type of products,” Mr. Morano added. “Our number one reason to invest is to help the community and our people. We want to ensure that the trust we set up will always have money going forward for the next seven generations of First Nations.”

Mr. Morano’s vision is rooted in the Waasa Gdi Naabmin Trust – the Ojibway phrase for “looking far ahead.”

The financial team meets with Mr. Big Canoe and his colleagues on a quarterly basis to review the trust, as well as the Williams Treaty Trust and the Rama pension plan for employees of Rama First Nation. Together, the team assesses the performance of the trusts and the investment managers who primarily manage stocks and bonds, and in some cases alternative investments.

In addition, the Chippewas of Rama First Nation have a community plan to pay an annual distribution to members and invest in several infrastructure projects. In recent years, the reserve has added a health and social services building; renovated and expanded its school, police and fire departments; and added the Getsidjig Endaawaad seniors community home and extended care facility, a residential seniors building that includes 12 long-term care beds.

“We’ve had additional settlement money come in and we’ve had to develop other policies, trusts, and also change investment managers and strategies a few times,” Mr. Morano said. “All along the way, we’ve had T.E. Wealth to review those plans, provide feedback, and lay out the pros and cons so we can make the best-informed decision for everyone – the best decision for our future.”

Editor’s note: An earlier version of this story indicated T.E. Wealth Indigenous Services collected an annual flat fee similar to a fee-for-service financial planner. The company collects an annual fee based on the amount of assets it provides advice on.