Tasso Lagios of Richter family office: two decades’ experience

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Tasso Lagios, Richter’s managing partner, has been working with some of Canada’s wealthiest families for more than two decades and in that time he’s seen different iterations of family offices, the areas where many excel and the areas where they need to ask for help.

He’s giving Canadian Family Offices a glimpse into his experience, as well as his insight on the challenges he sees for the country’s high-net-worth families.

What is it about the family office space that you consider unique and what approach does Richter take in working with clients?

I find the family office space quite fascinating because it is somewhat new in the Canadian markets, but also in some ways, it’s somewhat undefined. At Richter, the way we have defined it is we offer a full suite of services to our clients, and are not focused in one specific area.

We offer the full suite of services – which includes areas such as support around accounting and taxes, and also areas of acting in the capacity of a chief operating officer and chief financial officer – but more importantly, our solutions are always customized to the client’s needs.

The idea is to understand what they want to insource, why they want to insource these areas, what they want to outsource, who they want to outsource them with. Then, ultimately, asking if Richter can play a role in that outsource model or play a role in overseeing what they have insourced within their own family office.

We also offer what I call an end-to-end service, so it really is complete. If the client says, ‘I want to outsource everything. I don’t want to manage people internally. I’d rather travel. I want to enjoy life. I don’t want to build an infrastructure,’ we offer a full solution.

What investment strategies have you employed for your clients, for instance do you use model portfolios or have risk-assessment weightings?

All our solutions for our client around the investment side are tailored to the client. It’s not a model portfolio that we offer to our clients, but rather assess the risk and their appetite for risk.

Also, we take a slightly different approach around the build-out of the portfolio. We look at it in three parts. Firstly, we look at what we call the foundational piece, which is really the piece that allows the client to wake up every morning and know that there’s almost no risk of either loss or volatility in that part of their portfolio.

The second part of the build-out is what we call the inflation-protected piece, which is really ensuring that the portfolio keeps up with inflation, because of course inflation is your biggest enemy in the area of investments.

Then the third piece is what people will sometimes call wealth creation, which is really the aspirational part of their portfolio and it’s got more risk, liquidity risk, volatility risk, and maybe even possibility of some loss. Different people use that part of their portfolio to either enhance the growth of their portfolio or also use it to make donations around philanthropy, things of that nature.

How did you come to be at Richter? And what changes have you seen in the approaches the firm takes to working with clients?

My personal background is in the area of tax, but what drew me to Richter is the nature of the clients and the entrepreneurial culture that Richter had. Really, I saw Richter as a platform to continue to evolve in assisting private clients, and the natural space for us to eventually jump into was the area of family office.

Although we took care of the client’s private company needs, we realized that clients were developing a lot of wealth or creating a lot of wealth outside their core business and they needed a level of sophistication in helping them in the areas of their assets outside their core business assets.

We’ve had to learn the appropriate skill set to navigate through a multi-generational family. How do you educate the family? How do you transition the wealth? What are the best structures to employ; not just legal structures, but looking at how the family communicates, shares information, things of that nature? Wealth creation amongst these families is quite complex.

What are the biggest impacts family businesses have had on the Canadian economic landscape in the last decade?

The Canadian landscape is very much driven by family businesses and private businesses. That is the core of the Canadian economy. I think it’ll be even more so over the next decade or two, as there’s a lot of wealth transition taking place. Businesses that were founded in the 1960s, ’70s, and ’80s are now being either transitioned or being sold to private equity.

I think it’s both a challenge in the marketplace, but also an opportunity. I always tell my clients there’s three paths most businesses or business owners can take. They can either transition it to the next-gen and properly prepare the next generation. They can bring outside professional help because the family is not interested in running the business. Or they can monetize and sell the business – either all of it or most of it – and transition wealth, as opposed to the business.

I think a lot of these families need a lot of assistance from those who understand what that will entail vis-a-vis the transfer of businesses or the transfer of wealth.

You have unique experience as a mediator. Is there something that every family going through a dispute should do to achieve a resolution?

I have developed a unique skill set. It’s not only what you bring from an IQ point of view but also from an EQ point of view, helping families navigate through the complexity. I think a lot of this is in getting people [professionals] in early … and trying to help them structure themselves properly. The secret sauce is typically developing an ecosystem where the family can communicate.

The appropriate amount of communication and transparency is always very important in these circumstances and having outside people sitting around the table, as well. I think that it changes the dynamics of the communication, as opposed to having siblings or cousins just communicate amongst themselves, and adds a sense of formality around it.

Hopefully, if you get someone involved early enough, with both the technical and the interpersonal skill sets to help families, I think most of these issues can get resolved.

What would be your advice to those looking to enter private equity deals in this market?

Most people understand the public markets a lot more than the private equity markets. What I would say is that it’s important to understand the vast array of the areas in the private equity market, and then also have proper due diligence.

There’s a lot of risk in this area, and having a team to do due diligence on these and understand the liquidity or the lack thereof in relation to private equity is also quite important.

It’s an area that ultra-high-net-worth families have gotten more comfortable with over the years, but there’s still a lot more learning for them to do and understand. That’s where the wealth managers, or …. [our] chief investment officer, plays an important role in the education and understanding of what our clients are getting into and helping them navigate through that space.

When it comes to family enterprises, how has the tax landscape in Canada changed in 2024?

The tax rules in Canada have become more complicated in recent years. Families need to navigate through them carefully to make sure that they’re properly structured, both in structure as well as elements such as proper wills and life insurance, to ensure that the family is not caught off guard on the implications of either the death of some of the founders or things of that nature.

The world is becoming more transparent. The governments are forcing transparency through disclosures and things of that nature. Families need to comply with the tax rules, but there are always ways under the framework of the Canadian tax system to ensure that people are efficiently set up for tax purposes and proper estate planning is done for many of these families.

There are no doubt a lot of changes, things that every family needs to navigate through carefully and cautiously, but proper advisors around them can always do a fair job.

Responses have been lightly edited for clarity and length.

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