Kevin Dehod, president at Calgary-based CWB Wealth Partners, had his own significant liquidity event in 2022.
This happened when CWB bought his remaining interest in the wealth advisory firm, McLean & Partners, that in the nineties he had co-founded and was lead by his founding partner Brent McLean.
The resulting move, he says, from an owner to an investor mindset allows him to help his clients – including business owners, family offices, foundations, and small institutions – do the same.
With an economics degree from the University of Calgary his career started at what became BMO Nesbitt Burns. But it was a kitchen-table conversation at 16 that decided him on his career path, he tells Canadian Family Offices.
What are some key points that led to where you are in your career today?
I can remember being, I think I was 16 years old, and I was sitting at the kitchen table with my mom and dad. They were meeting with their advisor. This would have been … call it mid-eighties, when mutual funds were a new thing.
I can remember … just saying, ‘This is what I want to do. I love this.’
When I went to school, at the University of Calgary, I just was laser focused on this career and this profession. Then, I was just in downtown Calgary, handing my resumes around to investment firms in the early nineties. There was a firm called Burns Fry [now BMO Nesbitt Burns].
A receptionist at Burns Fry called me in for an interview and the advisor wasn’t there at the time. That’s significant in the sense that that advisor became my business partner at McLean and Partners for 20 years, but his assistant hired me.
I joined him in ’93 at Burns Fry. McLean and Partners came about in the spring of 1999.
Brent McLean was a key, massive influence in my career. I was 28 years old when we did this.
My dad ran a glass business in Northern B.C. Growing up in an entrepreneurial family and then connecting with Brent, it was just good chemistry for us to embark on setting up our own firm.
We built up McLean and Partners through the 2000s as a private wealth boutique in Calgary. Then, Canadian Western Bank started approaching us around 2010 because they really wanted to build out their wealth management business.
Brent and I and the rest of our partners just didn’t have an interest, but they were persistent and we got to know them better and saw the cultural alignment. April of 2013 is when we sold a majority position to CWB.
We were at about $900 million [AUM] when CWB bought into us. Today, we’re about $2.5 billion in assets under management, working with about 600 high-net-worth families. It’s been a nice growth path since 2013.
How did your liquidity event affect your career, wealth management decisions, and how you approach your work now?
One of the interests for us in partnering with CWB was to leverage and grow our business. It’s challenging as an independent boutique to grow your business past $1 billion. I don’t want to say it’s easy, but you can get from $200 million to $1 billion fairly easily as an independent firm.
Then, once you hit $1 billion, there’s a bit of a ceiling of complexity and distribution, and identifying larger AUM situations just becomes more complex and more challenging.
Like I tell my clients, ‘At some point, if you have a private business, you have to consider a sale opportunity or a diversification opportunity. You never know when there’s going to be a buyer there.’
I thought I’d take some of my own advice.
I’ve now sold my interest, so CWB now owns 100 per cent of us.
As I got liquidity from my interest in the business, and I think it is one of the things that sets me apart as an advisor, is I do explore other asset classes personally and I try and bring that into my relationships with my clients.
When I put on my advisor hat, I try and put my own personal capital in the same buckets that I recommend to my clients, including not just public-market assets. I find that makes a big difference when I’m sitting across from the family and I say, ‘Hey, we should look at this multifamily real estate fund.’
I’m not saying I’m an expert in all these asset classes – I don’t manage them.
But when I can look [clients] in the eye and say, ‘I’ve done a number of meetings and I’m going to be making a personal investment of X myself,’ that makes a big difference.
I’m very transparent with my clients and what I’m doing with my own capital because I think it’s important they know that and I think that way we’re all aligned.
How did your work with family offices evolve, and does it require a different mindset?
Part of me working with more family offices is just the fact that it’s become more well known … and it’s more organized now than it was 15 years ago. I think families themselves have just become more sophisticated.
We’ve grown with them through the journey. They brought in outside consultants, so I’ve had to learn how to work with outside consultants, and even work with other money managers. Whereas before, you were trying to keep the outside money managers away from your clients, I made a pivot and said, ‘Okay, well, this is a $50 million relationship. … If you were in their shoes, of course, you would diversify and use other managers as well.’
I can follow a scarcity mentality or I can say, ‘You know what? I think you should work with some other managers and I’d love to continue to be one of them, but let’s help you with that.’
I take a really open-minded practical approach that way. I think that’s what family offices appreciate about me. It’s not just, ‘I want to manage all your money and don’t talk to other managers, and there’s no need for other asset classes.’ I take a much more open architecture approach.
Are there any key issues surfacing with your clients today?
Then, how do they impart their values to this next generation?
Also, because they have more than enough wealth, how do they get more proactive and deliberate around their charitable giving?
Do they start looking at structures around charitable giving? Whether they make a 9-per-cent return or an 8.4-per-cent return, that’s not really a deal-breaker for them anymore. Maybe it was 20, 30 years ago, but not anymore.
Who’s going to inherit this wealth? What custody or hands is it going to be going into? What are the values of those family members or enterprises?
Like family offices, donor-advised funds have become a little bit more mainstream and accessible now to somebody with as little as half a million dollars. Once we explain that to our clients, they seem to really embrace it because it’s a more structured, organized way of giving. There’s also a lot of privacy that comes with that because the high-net-worth families really value privacy when it comes to their giving.
How do you work with exiting business owners, to handle the new complexities of their monetized wealth?
Even on the charitable side, for example, we don’t implement the donor-advised fund strategies, but over 25 years, we’ve assembled what we think is a first-class team.
We make referrals and introductions to our clients. They tend to have the conversation with us and we tend to identify the need, but then, obviously, we’re not experts in all areas.
How is your business handling the demographic shift in enterprising families?
One thing that has been really working well with our family office clients is just embracing their children as clients,
I’ve got a next-generation advisor group in my team, and they seem to really culturally connect with the children.
The parents feel comfortable knowing that, while they are not dealing with me directly, they’re dealing with our team, and the culture and client experience and the investment strategy are going to be similar.
Quite honestly, I think we all prefer that their children are dealing with younger members of my team. It just works better that way and I think it’s given us a higher chance of retaining the family’s business than if everybody just dealt with me. Because the children are in their 20s and 30s, and 40s in some cases, and they want somebody new and fresh, so to speak.
I’ve made an effort to really focus on recruiting younger people into our client service team. Then, when they come on board, they know that, over time, there’s a real, viable, cool career opportunity where you could be promoted into a junior advisor role in your late 20s.
Responses have been lightly edited for clarity and length.
Please visit here to see information about our standards of journalistic excellence.