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Officially, Paul Desmarais Sr. handed the executive reins to his two sons in 1996, but it was not until the late Power Corp. patriarch suffered a stroke in 2005 that "the boys" really took over.

That generational shift followed another. Only three weeks earlier, Robert Gratton stepped down as chief executive officer of Power Financial Corp. and Jeffrey Orr became the unit's CEO.

If you were being charitable, you'd say it's just an unhappy coincidence that Power's first, and last, blockbuster acquisition since 2005 was the 2007 takeover of Putnam Investments. (The 2013 purchase of Irish Life was small in Power terms.) The Putnam acquisition has been a dud. Executed at the top of the business cycle, it defied the strategy that the elder Mr. Desmarais, often with Mr. Gratton (and his ever-sharp pencil at his side) had perfected in deal after deal.

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Except for his very first move into business with an ailing Sudbury-based bus company, Paul Desmarais did not typically buy distressed companies. Instead, he bought good companies, usually at the bottom of the cycle, made them better and sold them at the market peak.

He was never nostalgically or stubbornly wedded to one industry, except for the newspaper business, having dreamed of becoming a media magnate back when that distinction bestowed the kind of pedigree that an establishment outsider such as himself craved. At the right price, Paul Desmarais Sr. could have been talked into selling anything – anything, that is, but Montreal's La Presse.

The family patriarch got out of the newsprint business a few years before the internet all but killed it. He sold Montreal Trust just before the early 1990s commercial real estate debacle drove much of the trust industry into insolvency, leaving the big banks to pick at its skeleton.

Mr. Desmarais was smart enough to hold on to Montreal Trust's best asset, however. That was Mr. Gratton, who ran the trust company until he took the reins at Power Financial. Together, the two men made the acquisitions of London Life, Mackenzie Financial and Canada Life that helped drive Power Financial's stock to a compound annual return of 28 per cent in the decade to 2004.

It would be unfair to expect Paul Desmarais Jr. and André Desmarais, the two brothers who have been Power's co-CEOs for two decades, to match their father's performance. Paul Desmarais was a giant, a visionary and a preternaturally hungry deal-maker. He had a hard-scrabble upbringing, which enabled him to relate to the working stiff, and such boundless ambition for himself and his country that politicians sought him out as much as he them. The sons do not share those characteristics.

Part of their problem is that the Power empire they inherited is caught, like them, between the old economy of their father and new economy of their sons. The financial-services industry is consolidating into a small number of global banks at the same time as it is being disrupted by technology upstarts that have replaced human financial advisers with robots.

Paul Desmarais Sr. had the old economy figured out to a tee. But not even he could likely have made sense of the new one. It does not help that neither Paul Jr. nor André Desmarais (who has been on medical leave since April) is a down-in-the-weeds kind of CEO. The boys were taught by their father to be owners, not managers, and to seek out hired hands in whom they could place their trust. But a hands-on approach may just be what's needed now.

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Paul Sr. was shy in public but gregarious in private. The sons were raised to be always on their guard. That may have prevented them from building the kind of camaraderie with friends and rivals alike that Paul Sr. excelled at, and which led to more than a few big deals. While André has more of his father's bonhomie than Paul Jr., both are aloof. They act like old money and appear allergic to risk. Their old-fashioned money management, mutual-fund and insurance businesses are still solid enough to churn out reliable dividends. But for how long?

Power's next act, if it is to have one, is likely to originate with the third generation. Paul Jr.'s son Paul Desmarais III and André's son, Olivier Desmarais, have been groomed to take over from their own fathers the way Paul Desmarais Sr. prepared his sons for "the day when." They have been allowed to watch the action from up close their whole lives. The two cousins are now both in their mid-30s and senior vice-presidents at Power. Both have done the rounds at most divisions within the Power empire.

Luckily, they both love tech. Olivier Desmarais was deeply involved in the development of the digital strategy of La Presse that, depending on whom you ask, was either a stroke of genius or colossal miscalculation. La Presse, which banked on selling its tablet technology to other newspapers, has gone all in on a platform that has tanked everywhere else. Success or failure, the tablet experience has no doubt provided Olivier with a valuable lesson in business.

Fintech is Paul Desmarais III's thing. He chairs Portag3, the venture-capital fund that oversees the investments Power is making in the very disruptors that are trying to eat its lunch. As Paul Desmarais Jr. explained Portag3's mandate at Power's annual meeting this year: "We want you to attack our group, because we want you to do the job that other people are going to do to us."

Still, the smallish fintech investments are hardly an insurance policy against the much bigger competitive and structural challenges facing Power Financial's top-heavy insurance and mutual-fund businesses. Supporting a network of thousands of insurance agents has become no easier than persuading average consumers to fork over mutual-fund management fees when a robot can do as well or better for free.

Power is now asking investors to be patient. But patience is not what once made Power so great.

Rob Carrick speaks with insolvency trustee Doug Hoyes, on the trouble with debt; Should you always pay yourself first when it comes to finances?
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