Wealth Management for Multigenerational Families an Interview with Declan Ramsaran
In this week’s blog, I interview Declan Winston Ramsaran, Managing Director at PANGEA Private Family Offices based in Toronto, Canada. Declan talks to us about wealth management for multigenerational families.
Tell us about your background.
I am a 15-year veteran of the Canadian wealth management sector. I dedicated 12 of those 15 years to BMO Financial Group – one of the big 5 banks in Canada. My most recent role at BMO was Director, Private Wealth Planning where I led national-scope wealth planning strategy for BMO Private Banking. Over my BMO career I saw some of the inner workings of several banking operations including: personal and commercial banking, full-service and self-directed brokerage, capital markets and the private client group. Currently, in my role as Managing Director, I am leading the international growth strategy for PANGEA Private Family Offices. In addition to the accomplishments in my professional life, I am a proud father, husband, brother and son, and I believe strongly in serving one’s community through volunteer efforts and contributions to non-profits. My areas of interest are education,science and healthcare, the arts and protecting our environment. Organizations I am involved with are the Junior Achievement of Canada, the FPSC Foundation and SickKids Foundation. I serve as vice-chair on the board of directors for Summers at Sea, a Canadian non-profit dedicated to providing at-risk youth with accredited, marine based educational programs and environmental impact opportunities. I serve on the endowment foundation board of a private Canadian University and I am also member of the Toronto Film Society, the Art Gallery of Ontario and Young Patrons Circle of the Royal Ontario Museum.
How does PANGEA serve enterprising families and provide family support to their wealth management needs?
Wisdom, passion, creativity and integrity form the ethos of PANGEA Private Family Offices. We are a family wealth strategy firm serving first and second-generation creators of significant wealth and their children. We specialize in resolving complex family wealth issues for enterprising global families with thoughtful guidance and insider perspective. Our purpose is to help global families flourish for generations. We believe that wealth transcends dollars and decimals to include personal well-being, family intellectual capital and family and community legacy.
We believe a family's wealth strategy should consider both the qualitative and quantitative elements of family life supported by a team of professionals commanding mastery in their disciplines. Examples of qualitative elements include: family communication skills development, family governance, making use of concierge services to create time and retaining the services of a health coach to increase energy and longevity. While not an exhaustive list, the aforementioned qualitative services are vital to helping the family thrive. The families with whom we partner with are usually intensely private and so discussions about internal family conflict and personal insecurities are approached respectfully and meaningfully, with professional guidance.
Our approach to capital deployment is systematic. First, we evaluate investment opportunities with a high degree of direct family control, and then we consider investment opportunities with lower direct family control. Systematically investing family capital with this approach means we consider the best interest of the family first with an eye on appropriate investments for the family’s wealth strategy. Deployment into investment opportunities that are conducive to a high degree of family control over a majority of deployed capital is our aim.
PANGEA is a privately held firm, meaning we have unrestricted liberty to provide unbiased advice guided by decades of experience and insider perspective. Our clients highly value our independent position because of the candor that it affords in communication and the allegiance it fortifies to the family’s best interest. We’ve eliminated conflicts of interest by centralizing decision-making authority within the family’s thought leadership council/Board of Advisors who are loyal to the family. Furthermore, we’ve separated the strategy from the sale thereby putting the decision making control back into the hands of the family. While we may not be the first to provide breaking news or may not always arrange investments with the highest return rates in the investment universe, our purpose in the relationship is to deliver the most appropriate advice to the family after careful consideration of the available facts about their specific circumstances.
What do you see as the most pressing issues facing multigenerational wealthy families?
The most pressing issues for first and second-generation creators of significant wealth are different than the most pressing issues for fourth and fifth generation stewards of family wealth.
Generally, first and second-generation family members eventually struggle with inappropriate inter-familial communication. Proper education on effective family communication and governance to maintain uninterrupted, long-term cohesion is critical to thrive long-term. At times first and second-generation creators of significant wealth succumb to complacency and apathy borne from an insular existence and the privilege of access. To help the family develop through this process, families need to articulate a clearly defined purpose and live with a vision to move humanity forward in meaningful ways.
In your experience, where do you see families fall prey to conflict or certain pitfalls that could have been mitigated? Describe a specific case anonymously.
Being wealthy doesn't automatically make us the best decisions makers. Unsubstantiated self-confidence fueled by pride and the illusion of power drawn from one's bank account balance can sometimes get in the way of good decision making.
After 30 years of successful operation and explosive growth of a family enterprise that serviced local markets as well as export markets in neighboring countries, the second generation began to experience the effects of selfish-pride as the hierarchical family structure began to disintegrate. The erosion of respect and courtesy within the family created a land-slide into corporate litigation over shareholder agreements, and the contesting of estate intentions that eventually generated public court documents revealing private family information, which was broadcasted over local media news outlets.
Learning to deal with publicized family affairs is difficult - especially when personal friendships and relationships become strained because of the "family scandal." Retaining a spokesperson for the family to communicate with media was a crucial step. The family also needed a counselor to help family members talk through the challenges of the circumstances. Had an effective multigenerational governance strategy and clearly defined family purpose been established from the first generation, coupled with educating the second generation from childhood about wealth and the family history, conflicts like these can be mitigated.
If you were able to have dinner with anyone alive or dead who would it be and why.
I have selected ten people that I would enjoy learning from or just simply observing by being in their presence. The full list can be found by clicking on the link.
What are one or two best practices learned from your experiences over the years working with families that could help other families in similar situations?
I believe a family should privately define their own purpose and vision. This vital process equips the family to be at the helm of their wealth strategy with strong leadership and proactive decision making rather than being subject to reactive decision-making based on random suggestions from multiple advisors- each advisor with their own competing agenda.
Trust but verify. A genuine private family office provides special access to tenured professionals who, in most cases, are no longer bridled by a corporate muzzle. The right relationship with these types of professionals can make all the difference in magnitude and longevity of success of a family’s overall wealth strategy.
Declan Winston Ramsaran, Managing Director at PANGEA Private Family Offices based in Toronto, Canada