The Perspective Blog
Eight Lessons from Eight Years at Northwood Family Office
Earlier this year, I celebrated eight years as a trusted advisor to wealthy families with Northwood Family Office. I started my journey in the family office space way back in January 2017, the same week Trump was inaugurated for his first term. At that time, there was a lot of uncertainty around how the next four years of a Trump presidential term might play out. Eight years later, weâre back in the same place again. On the personal front, in that eight-year period I also got engaged, got married, lived through a global pandemic, welcomed two boys, and became a shareholder and partner at Northwood.
During my time here, Iâve spent a lot of time working with families and getting to know them on a deep and personal level. Iâve learned what makes them tick, what their goals are, and what keeps them up at night. People on the outside looking in often think this business is primarily about managing money and investments for people. While thatâs a big part of what we do, it's also only one facet of what we do. As integrated advisors, we are involved in everything from priority setting to planning to financial management to risk management to family well-being. Iâve seen people cry in meetings when sharing something their family is struggling with, or while relaying a difficult story from their familyâs past. Iâm not ashamed to admit Iâve also shed tears in some of those emotional meetings with families.
With all that in mind, I wanted to share eight things Iâve learned over my last eight years working at Northwood. This list isnât meant to be exhaustive, but it is the stuff that stood out to me.
1. Everyone is worried about their kids and wants whatâs best for them
This one is universal, and Iâve personally seen it play out across the entire spectrum. When I was backpacking in Asia, it was the guy driving the tuk-tuk in Cambodia living with his wife and kids in the one room cement block with no AC. He brought us to his home and introduced us to his family and noted how he wanted his kids to have a better life than he had and was working hard to give them the opportunities he didnât have himself growing up.
Now that Iâm working at a family office, itâs the family in North Toronto worth nine figures with two teenage kids trying to find their way in the world. Mom and Dad are worried about the effect the familyâs wealth is having on their kids and their kidsâ relationship with money. They want them to be able to take advantage of the access and opportunities that wealth can afford, but they worry about the effect that same wealth has on their ambition and social relationships.
2. Everyone wants to know what everyone else is doing
âWell, what do other families do?â
This question comes up all the time and in relation to many different subjects in our conversations with clients. It might be about helping adult children with the down payment on a home purchase or deciding on the split between family and philanthropy in an estate plan. It might be in the context of how to invest a lump sum of cash, or what the right asset mix is for a family with multi-generational wealth.
One of the benefits of working with a multi-family office is that you can ask this question to the team of people you work with, and benefit from hearing what other families in similar situations are doing (confidentially, of course). Thatâs not to say that following the crowd is the right approach, but it can still be very beneficial to get the perspective of other families struggling with similar questions to the ones youâre trying to answer.
3. Money doesnât buy happiness â but it does make your life more comfortable
The academic research on this point has shifted over the past ten years. There was a famous 2010 study by Daniel Kahneman and Angus Deaton that said incomes were correlated with happiness on the lower ends of the spectrum, but that this correlation broke down above $75K in annual income. More recent studies have challenged this finding and said that happiness does continue to increase as people earn up to $500K per year in annual income.
I would lean more towards the $500K number than the $75K number, but Iâd also caution anyone who thinks that money is some sort of panacea that can solve any type of emotional struggle someone might be going through. Money can insulate you and your family from bad outcomes, put a floor under your familyâs lifestyle, and provide you with the security to spend less time worrying about how youâre going to pay the rent/mortgage next month. All these things contribute to emotional well-being but wonât necessarily make you a happy person. Just look at Elon. Heâs the richest man in the World and he doesnât seem very happy about anything.
4. Watch the company you keep
This one predates my time with Northwood but has been reinforced for me over the last eight years. âWatch the company you keepâ, is a saying my mom would say in my adolescent years to discourage me from falling in with the wrong crowd during high school. It also ties into the idea that âyou are the average of the five people you spend the most time with.â In other words, if you surround yourself with smart, driven, ambitious people, youâll inevitably end up reaping the benefits of their influence on you.
In the recent video we recorded (found on the Northwood website homepage) my partner Eric Weir said, âWhen any client comes to Northwood, what theyâre getting access to on day one is one of the best teams in Canada for planning, and for investing, and for all the things a family needsâ. I couldnât agree more, and I think itâs also one of the major benefits of working here. My personal development as an advisor to wealthy families was massively accelerated by being able to work closely with and learn from the incredibly bright and talented people we have working here.
5. Donât judge someone by how they appear
I needed to mix in something lighthearted on this list. If youâve ever walked in the Yorkville neighbourhood in Toronto (or similar places around the world) youâve probably seen some ostentatious displays of wealth. Iâm talking about the guy driving the lime green Maserati with the suicide doors pulling up outside ONE and flipping his keys to the valet. Itâs easy to see this person and assume that they must be very wealthy.
However, if my experience over the last eight years is any indication, that person is likely not worth nearly as much money as you might assume. Maybe itâs a Canadian thing, but most of our clients are quite understated in any outward expression of their familyâs wealth. They dress like normal people, they drive nice but reasonable cars, and they live fairly normal lives (all things considered).
6. Family Offices are a growth industry in this country
In 2017 when I told people I was leaving RBC to join a family office, most people (including those working in the financial services industry) didnât know what I meant by the term âfamily officeâ. Eight years later, the term has become an industry buzzword and a way for many firms to rebrand themselves as integrated advisors to wealthy families. Several big Canadian banks now have family office groups inside of them. So do a few of the âBig Fourâ accounting firms. When you scratch beneath the surface at these firms, you donât usually find a full integrated service offering, but itâs interesting to see how much the term has caught on in a relatively short period of time.
At Northwood, we think this growth in the family office industry is a secular trend, and we think weâre well positioned to benefit from it. Weâve spent the past 22 years doing this kind of work and growing our expertise and skills in this segment of the market. Weâve built a great young team and now have 25% of our staff as shareholders in the business. As our co-founder Scott Hayman recently put it, âI wish I was 20 years younger so that I could be around to see where the next generation takes this business over the next 20 yearsâ.
7. The wealthy are not usually idle
Some of the wealthiest clients I work with are also the hardest workers. In many cases, these people havenât had to work from a financial perspective for decades, but they still want to be engaged in something, and they often find real fulfillment and energy from their jobs or whatever it is theyâre focused on building.
To use a Northwood example, of the 37 people that work here, our founder and chairman Tom McCullough probably ranks at the top of the list from a personal net worth perspective. Financially, Tom could have retired years ago and spent the last decade sitting on a beach drinking something out of a coconut. But if you made another list of who at Northwood is most likely to send you an email on a Saturday morning on an interesting article they just read, Tom would also rank at the top of that list. He isnât reading work-related articles on Saturdays because heâs trying get a raise next year (âI donât think!). Heâs reading them because heâs passionate about what we do and is a true believer in the value we bring to each of our client families.
8. Life is short and donât ever take it for granted
This last one is less lighthearted, but maybe the most important lesson of all.
I have a close friend who works at the world-famous Hospital for Sick Children (SickKids) in Toronto. Sheâs also a mom to two great kids. She once told me she loves what she does and particularly enjoys being part of an organization that routinely provides life-saving care to children from all over the world. She also told me that as a parent, her day job is terrifying, because she now knows about all the different and extremely rare health problems that kids can run into as a result of nothing more than bad luck. When you live in that world all day everyday itâs difficult not to imagine what those sort of scenarios might look like for your own family.
My example is less extreme, but Iâve also heard my share of terrible stories. As a firm we work with roughly 100 families, and in most cases, we know the highs and lows of each familyâs story. Maybe itâs just a numbers game, but when you know 100 families on an intimate level, you hear about all sorts of stories (good and bad). At Northwood, we also lost a friend and colleague in the prime of his life to a heart attack in 2023. He left a wife and two young kids behind. You donât forget things like that.
All of that to say, none of us knows how much time we have left, or how much time the people we love have left. So, if you only take one thing away from these 2,000 words, donât take life for granted and be grateful for every day.