The Human Side of Wealth

October 6, 2022. By Michel for Private Banking 1859.

We often think of wealth management as an “inheritance” or an “investment”. Yet, family wealth encompasses much more: it also involves family members and how they relate to their assets. To better understand the human side of wealth management, we spoke with François Archambault, Senior Manager at the Private Banking 1859 Expertise Center.

CONFESSION

Before we start, we have a confession to make: this wasn’t the topic we had planned. When we came into contact with François Archambault, an accomplished notary and tax expert, we were expecting a serious man who carries a calculator and tax law book around, and that would talk about what we thought were the main aspects of his work, i.e., taxation, estate planning, wills, investments, income tax, etc.

It only took a few minutes discussing with this cheerful, open and welcoming man to realize we were wrong. This is about more than just tax expertise.

“Obviously, it’s a mix of financial and tax-related elements, but also the person and their history. If I don’t take this into account, I can’t make the right decisions. In the end, it’s 80% about humans and 20% about technique”, says Archambault.

RETIRING FROM YOUR OWN BUSINESS? YES, BUT...

There are many options: business transfer, transfer of shares, sale, partial withdrawal, dissolution of the business, etc. But, before even settling on which one to choose, the expert must make sure that their client is ready to let go.

“My clients are deeply attached to their business. They won’t let it go simply because economic conditions are favourable. People tend to forget that. So, it’s important to take the time to talk about it. This will give me insights that aren’t quantifiable, but that will have a greater impact on future calculations than actual numbers.”

TAX EXPERT WITHOUT BORDERS

Archambault points to similarities between his role as a wealth management expert and that of a doctor: “First and foremost, a good doctor listens and is empathetic and trustworthy. They don’t simply recite one-size-fits-all advice and hand out prescriptions. It’s kind of the same for us. We’re top experts, we have the ability to do high-level calculations, but we won’t be of much help if we don’t take the time to get to know our client’s global situation.”

Tax knowledge is only a part of the solution put in place to support clients’ objectives. Defining these objectives, not unlike the medical diagnosis, is considerably more important than the “prescription”.

BETTER SAFE THAN SORRY

François Archambault also warns of the inevitable pitfalls when neglecting the human side of wealth management.

“Let’s take, for example, a situation where we fail to see that the client wasn’t entirely ready to step away from their business and consequently, the business transfer is unsuccessful. It might still be alright from a legal and taxation point of view, but from a human point of view, it would be a complete failure. If the client is not ready to let go and retains too much control, they will cause friction with the successors and after two to three years, it will either have failed or a huge fight will have broken out…”, he says.

He adds: “Had we taken the time, we could have planned it differently, more gradually, taking into account the needs and wishes of everyone involved.”

A LARGELY UNKNOWN ASPECT

Despite its imperativeness in wealth management, the human side is yet to be championed in the industry.

“As a professor of taxation at the graduate level, I see raised eyebrows when I broach this topic. My students think that a competent tax expert only has to find the most tax savings for their clients. It’s part of it, but I have to make sure they know that if they want to keep doing a good job in the long term, they need to be very attentive to their client.”

WHERE THERE IS WORRY, THERE IS NO FUN

“Discussing passions, dreams and other topics outside of financial considerations with my clients not only gives me very useful insights, it also makes it all a lot more fun… You have to enjoy chatting and having fun!”

He adds: “We all need to discuss these things, because we all have a story. The events we help our clients with are significant in their lives. Once I have established trust, I also kind of take part in their story. I develop a closeness with them that I find amazing; it’s the most rewarding part of my work.”

François Archambault currently leads Private Banking 1859 Expertise Center’s team of 10 experts, who serves humans across Canada. He also teaches estate planning as part of the graduate program of Law (Taxation option), at HEC Montreal. Although busy with his roles as a director and professor, he will always find time to work as an expert advisor.