What better expert in family offices than someone who custom-designs them?

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Carolyn Cole spent close to two decades working in family wealth for three of Canada’s biggest banks as well as a global management consulting firm before venturing on her own to launch three companies focused on family offices and capital.

Her technical and professional expertise is augmented, she says, by having raised two “generation four” sons who, now as adults, have joined her former in-law’s family office and enterprise. Combined, her experiences as an advisor, parent and thought leader provide her with a unique vantage point. Today she advises families and professionals across Canada and splits her time between Toronto and Vancouver.

Indeed, Cole has watched the country’s family office industry grow over the past decade to an iteration that’s clearly still a work in progress.

Canadian Family Offices sat down with Cole, who lives in Vancouver, to hear her perspective on the industry and learn about her approach to family offices.

How would you describe Canada’s family office industry today?

It’s an industry that’s not cohesive in any way, shape or form. The greatest challenge is there’s more than one definition of family office, and what services are provided from one firm to another can be remarkably different. That leaves families often confused and not always with the right service provider.

In Canada, family office is an unregulated term, whereas in the U.S. it’s mentioned in SEC (Securities and Exchange Commission) standards. Until the industry has some type of standard or clear definition for the term “family office,” we will continue to struggle.

In the last two-plus years, you’ve founded or co-founded three companies. Tell us about these businesses.

All three are family office-focused. Cole & Associates is a family office strategy and design firm. Cole Connect is focused on deal flow and capital, and serves to connect a network of individuals who occasionally want to co-invest or invest directly in other projects. I help facilitate that to create a win-win.

Families in Canada are rapidly evolving. It’s the advisors and large professional firms who have not evolved and are behind.

Carolyn Cole

I started Family Office Administration Services with a woman named Jovica Prince. That business was born out of me being in the wealth space over 20 years and having entrepreneur after entrepreneur sell their business and say to me, “Carolyn I just need a bookkeeper or an executive assistant. Do you have someone?” It’s for families who don’t need a full-time family office but need administrative services.

Can you expand on how Cole & Associates works with families?

We facilitate building a strategy and coordinate all family members and participants to ensure it gets done. Part of my ability in this space is converging how the different technical components and long-term professional relationships impact the family’s goals through generations.

As we build out a strategy for the client, we bring all these professionals around the same table for real-time strategy sessions where I look at how each piece of the puzzle interacts. In most cases, this would include professionals the client already works with, such as their accountants, lawyers and other providers. Our intention is to work with the family, not to disrupt the relationships that are already established and working for them.

So you don’t sell any products or services to your clients?

I created this business because I felt families needed to be outside of the sales culture when making a selection for any professional. The only way to do that is to have an independent consulting firm that is paid only by the client, that takes no other remuneration in any way. Full stop.

By removing the concept of us selling something, we’re building a higher level of trust. And when there’s a higher level of trust there’s a higher level of engagement.

What key considerations do you take into account when structuring a family office?

Every family is naturally defined by a leading aspect or focus. Some families are focused on wealth first while others are family-first – I always ask.

If you’re wealth-first and more focused on maintaining the security of your business or group of assets, the structure will be around generating wealth, and that may mean there won’t necessarily be a seat for family at every table. If you’re family first, you’re probably more willing to forego some wealth generation opportunities in favour of building a strong family culture.

A growing number of financial advisors and planners are evolving their practices to include a family office. What’s your view of this trend?

The trend is here to stay because families in Canada are rapidly evolving. It’s the advisors and large professional firms who have not evolved and are behind. I have in the past helped advisors set up a family office within their practice, but I found it less successful than when Cole & Associates sets up the family office with the existing advisor, and then turns over a fully systematized platform for the advisors to maintain and run. This makes more sense for the advisors because they get to focus on their area of expertise, and it makes sense for the family because they get what they need: an organized, fully functioning family office encompassing various professionals.

We don’t see ourselves as competition – we partner with advisors for a short term of between 18 and 24 months. In fact, Cole & Associates is growing to support advisors who specifically know that their clients need a family office but recognize they collectively need some help in organizing the foundational components.

A lot of other professionals, like accountants and lawyers, want to enter the family office space. What’s the best way for them to do this?

I believe the most effective way for seasoned technical professionals to become part of the family office space is to be open to working with other professionals in a multi-disciplinary way that allows each professional to provide their expertise for the benefit of the family.

The challenge with that is most professionals work for larger organizations that want them to have control of the client and lead the relationship. This traditional, single-advisor-control approach is not favourable to a collaborative environment, which is what a family office truly is.

What are the challenges for wealthy families when it comes to finding the right professionals to work with?

There are a lot of misconceptions about wealthy people. I watched professionals over the years make snap judgments about someone with a certain last name. Sometimes they talked about them with disdain. In my early adulthood, through my first marriage, I was exposed to multigenerational wealth. Until then, I was unaware of what humble wealth looked like, and what I learned in those years shattered all of the media propaganda of what wealthy people should be like.

As I moved forward in my career, that youthful experience gave me a different lens that has allowed me to work effectively in the world of individuals who build businesses or who have inherited wealth.

What do family office professionals need to understand about wealthy individuals so they work with them effectively?

Most family offices are built through entrepreneurship. It’s important to have a real understanding of what it takes to be an entrepreneur and what it’s like to have a mindset where you’re willing to take that risk to move forward and succeed. Once you understand that it becomes easier to merge that entrepreneur’s perspective with your technical expertise, whether you’re a lawyer, accountant, banker or insurance professional. Most advisors are not naturally entrepreneurial, and shifting views from one’s usual state to that of the client is hard.

Succession and wealth transfer to the next generation are hot topics in the family office and wealth management. What is this next generation like, and are they well equipped to accept the responsibilities that come with their inherited wealth?

We have to look at the different demographic groups in the “next generation.” The rising generation in their 50s are very eager to support and learn as much as they can from more senior family members. They’re seeking structure, they’re seeking knowledge. They want to know, how did Dad or Grandma do this?

By comparison, those in their 20s and 30s may suffer from “last-name shadow,” where the perception that they come from wealth can be damaging to their self-esteem far more than the generations before. If they live in the community where their family is well-known, I often recommend that they move away for school and build their own identity.

I have many requests to help set up a family office from the inheriting generation who are genuinely seeking clarity, support, transparency, education and preparation.

What can family offices do to help the rising generations of wealthy Canadians be better adjusted?

There are a lot of challenges for kids coming from wealthy families. There’s wealth-shaming and feeling like you have to be cautious around your girlfriend or boyfriend. And many among the rising generation don’t want to open up to their parents or to their parents’ advisors.

So I wish more people would be open to putting these kids in a room where they’re all the same, where they can openly talk about getting picked on at school or feeling under so much pressure to uphold the standards expected of their family.

But Canadian advisors are infants at this. They have a lot to learn and we need to work together to address this challenge.

This interview has been edited and condensed.

More from Canadian Family Offices:

• Survey says: How to support clients (or not) when they want alt investments
• Wealth report: Alberta is home to early-stage wealth, opportunities for family offices
• Six more Canadian family-office leaders and the books that inspired them
• Five things that can go wrong at the family office
• Selling the family business brings brave new world, profound yet unsettling

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