In handover to son, John Amonson of Unbiased ‘walks the succession walk’

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Succession planning is a big part of a family office’s duties. Advisors help clients transition wealth, assets and even generational businesses between people with vastly different time horizons, expectations and personalities.

John and Taylor Amonson at Unbiased Financial Services Inc. in Calgary are practising these principles as well as preaching them. As father turns the company over to son, they’re learning much along the way, from the extraordinary amount of time such handoffs require to the best way to serve their clients.

“It takes longer than you think,” says John, 66, who remains the firm’s president but at the end of 2022 turned full voting control and signing authorization over to Taylor, 37, its vice-president, one step in the process that they estimate is 95 per cent complete.

John started the company in 2000 after an early career as a financial-services salesperson in the trust industry, where he encountered wealthy clients and got a taste for working in a fiduciary and financial-planning environment.

“I decided to create a business that I’d like to be a client of,” recalls John, who was troubled by issues he saw in the industry such as conflicts of interest and a limited provision of actual planning services. “You can build something that meets your personal expectations.”

He called the company Amonson Wealth Management and then renamed it Unbiased to reflect its focus on guiding clients on what’s best for them and their families rather than selling them products.

“The easy part in this business is the investment solution; the tough part is all the planning,” John explains, noting that Unbiased has a complex remuneration structure where it’s paid based on a client’s net worth. “That way you can provide objective advice on everything,” he points out, offering direction and support to prepare people for what’s ahead.

Turning his attention to his own future about 15 years ago, John and his wife Nancy started talking about his transitioning from Unbiased when he heard an expert speak on the topic at a conference. “He said, ‘If you haven’t started on your succession plan now you’d better start, because it takes way longer than you think.’”

The process began with a critical family discussion where John asked daughter Morgan and son Taylor whether they had any interest in the business. Taylor gave the thumbs up and finally joined Unbiased in 2014.

Education is another important element to ensure successful transitions, John says.

“Kids have to be educated in a manner that is consistent with and at least provides some background for being involved in the business.” Taylor has a bachelor’s degree from the University of Victoria in European history, a passion of his, as well as an MBA with distinction from Edinburgh Business School and a Certified Financial Planner designation. His early career focused on the banking industry, working for RBC, a significant difference from his father’s entrepreneurial roots.

Indeed, John says his son is the total opposite of him – more conservative, inclined toward administration and better at follow-through.

“I don’t do calendars very well, nor time. I think sideways while Taylor thinks up and down, logically. I’m not great on logic,” he says, noting that it’s important to be cognizant of such differences in temperament and understand “how they can contribute to an effective team.”

An apprenticeship period is also key, he says, giving you a year or two to figure out if “you still like working with each other and you want to move forward.” Then there’s the formal structuring of the deal, which John says has been” horrendously difficult.”

Seeking professional help is essential, “but by the time the founder is thinking about winding things down a little bit, so are all his advisers,” he points out. “So, at a time when you’re doing the most complex transactions that you may have done, you’re doing it with advisers nearing their best-before date.”

Ensuring there’s adequate cash flow “to make everybody happy” is another important consideration, he cautions.

“There has to be enough to pay out mom and dad over the years and provide a living for the next generation,” he says. External valuations are useful “so you have an objective figure as to what’s a reasonable price for the transfer, and you try to be tax-efficient.”

The company continues operating while all of this is taking place, of course. Today, Unbiased has 44 client families in Western Canada and growing. Indeed, Taylor would like to take on six new clients this year, with plans for slow, steady growth focused in part on attracting young professionals as clients.

Younger clientele will help the company’s bottom line in more ways than one, John says.

“In these investment-management businesses, once your clients age up and they start drawing down on their assets, it’s very difficult to keep your assets under administration flat, never mind growing,” he comments. “And most advisers my age haven’t been actively marketing for years, so to have a young person bringing young people into the business – which is what Taylor is doing – is fantastic.”

The third member of the Unbiased team is Yan Li, who as chief investment officer has important technical and data skills and has built intricate systems that track clients’ net worth. John, who’s a strong believer in mentoring and helped start a national mentorship program at the Institute of Advanced Financial Planners, has been a mentor to Taylor and Yan but learns a lot from them as well. “It’s pretty easy to grow a little stale as I age up, so it helps being around the younger generation.”

The Amonsons hope to help others with their own transition issues. John notes that many financial-planning businesses “have never done their own succession, so we’ve got real-life experience that we can bring to bear.” He hears from others in the industry that he’s lucky to have a family member to assume the business.

Taylor, meanwhile, is grateful to be taking over from someone he can trust. “You can be confident that you’re both moving in the same direction,” he says.

Taylor will become president of Unbiased in due course. “That will be about the last piece in the process,” says John, who’s a firm believer in the fact that “you can have succession and still be around. The corporate structure can be transferred, the value in the business can be transferred, voting control can be transferred, decision making can be transferred, and I could just be working here as a part-time employee helping out when possible.”

Having his father remain with Unbiased “is a better structure for clients, because there’s a lot of people who like having him around,” Taylor notes. “People don’t want to be just transferred to some new person immediately.”

Yan says one reason people often cite when looking for a new adviser relationship is that traditional bank brokerages and some life insurance companies have a revolving door of employees. “Clients can see their adviser change multiple times in a very short period of time, and they just don’t know anyone or feel they’re being looked after,” he comments. “John’s very experienced, and it has really helped to have a continuity of faces.”

On a personal level, John says research shows that slowly transitioning into retirement brings success for the retiree.

“The ‘cold-turkey, sell-your-business, wake up the next morning and figure out what you’re going to do’ is not always such a great thing,” he explains. “The beauty of these structures is that you just spend less time over time, and that’s well correlated with a successful retirement.”

John and Nancy have discussed making the process complete in three years, on their son’s 40th birthday. In the meantime, John has cut his salary in half and is planning to do more skiing, spend time on his hobby fixing old cars and taking more trips with his wife in their Volkswagen van.

Throughout the transition, “the hardest thing for me has been to step back,” he allows. “In the succession, the founder can’t just keep hanging onto his vision all the time. You have to leave room for the next generation to learn things and do what they want to do.”

Ultimately “the founder has to give up control, for real,” John adds. “Technically, Taylor can make all the decisions, and on a day-to-day basis I constantly try and pull myself back from interfering. And Taylor takes the business where he wants to take it.”

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