When asked how the economic climate has affected her firm, Chris Clarke of Toronto-based First Affiliated Holdings Inc. offers a straightforward assessment.
“The current economic landscape is uncertain, and the financial markets are characterized by excessive volatility,” says Clarke, president and founder of First Affiliated, a leading Canadian multifamily office working with affluent Canadian families and business owners. “Families and businesses often lack confidence about their futures, are uncertain who to turn to for advice, and feel paralyzed when it comes to decision-making. Consequently, our 23-year record of providing safe refuge for clients by remaining true to our values of long-term strategic financial planning is even more relevant today.”
First Affiliated’s Family Prosperity Plan is the foundation of its approach. This unique, innovative strategy takes an industry-leading, integrated approach to addressing clients’ wealth, lifestyle, and legacy-management concerns.
“We work in partnership with each family’s advisors—accountants, tax advisors, attorneys, and others—to create, implement, and monitor a plan that preserves wealth, empowers prosperity, and builds legacies,” Clarke says. “We are guided by the client’s values, goals, and aspirations.”
The first step in developing a Family Prosperity Plan is to organize and assess current financial resources, and to project the future outlook based on the client’s needs and desires. “We sit down with the client to discuss, analyze, and understand their personal attitudes, beliefs, priorities, and objectives, both for today and the future,” Clarke says.
Each family’s entire financial landscape is addressed. “Family-owned businesses, for example, are often excluded from the analysis by traditional investment advisors,” Clarke says. “However, because we realize how important these enterprises are to family security, they are critical to consider when developing the client’s Family Prosperity Plan.”
Subsequently, action is taken to establish what Clarke calls “capital thresholds” for achieving objectives. “We identify the minimum pool of capital (in today’s dollars) required to meet each goal,” she says. “We then develop longer-term strategies through financial mechanisms, such as income generation and cash management; investments, tax, estate, and succession planning; and even philanthropic initiatives necessary for meeting these goals.” These strategies are then implemented with the assistance and expertise of the family’s existing advisory team.
First Affiliated regularly measures plan performance as compared to its clients’ long-term goals. By doing this, changes can be made quickly and effectively to ensure the plan stays on the right track. “It is important that there be accountability for results to the client’s objectives,” Clarke says. “Traditionally, the investment industry measures performance to their own objectives, which is not always to the client’s advantage or requirements.”
Other First Affiliated initiatives round out the wealth-management services provided to clients. Through its First Affiliated Academy, for instance, strategic legacy planning and education help to establish true financial stewardship, and ensure that both wealth and lasting legacies are passed on to the next generation. In addition, the First Affiliated Foundation was established to help clients fulfill their strategic philanthropic goals.
This strategy is far different from traditional financial-advisory services. In fact, clients do not need to have liquid portfolio assets to find value in the services. “By taking into account a client’s total financial picture, we can provide them with the most comprehensive roadmap possible for growing and maintaining their wealth,” Clarke says.
Furthermore, First Affiliated’s fee-based service model helps ensure objectivity in putting together the financial roadmap. “Too often, when it comes to commission-based wealth management, there is the temptation to sell a certain financial product, which may or may not be appropriate for the client,” Clarke says. “Our model ensures we are a partner in our clients’ success.”
First Affiliated is privately owned and does not sell any products. “This approach puts us on the same side of the table as clients,” Clarke says. “It enables our professionals to be completely objective, and to provide honest, unbiased expertise that is truly in the client’s best interest.”
Yet another key aspect of First Affiliated’s philosophy, and one which strongly differentiates them from the competition, is the ultimate goal of its efforts: “Our goal is to preserve wealth and empower family prosperity,” Clarke says. “As trusted and accountable advisors, we oversee the complex demands of wealth management, to optimize the family’s financial affairs and free up their time. Ultimately, this reduces their worries so they can focus on other priorities in life.”
This integrated and collaborative approach, Clarke believes, spells good news for First Affiliated in the midst of these trying times. As a result, her firm is opening several new offices throughout Canada.
“People are looking for a better way,” Clarke says. “We’re fortunate that an increasing number of successful families are choosing First Affiliated to not only watch out for their interests, but to enable them to move forward with confidence during these challenging economic times.”