Carol Schleif, BMO Family Office
Carol Schleif has been in the financial advisory space for more than 40 years. Before her current role as chief investment officer at BMO Family Office, she spent more than 27 years at Wells Fargo & Co., where she rose to deputy chief investment officer of their multifamily-office business.
What is a key issue to resolve for families when they arrive at your doorstep?
I think the key issue to solve when families arrive is what it is they’re looking to do. And quite frequently, there’s not necessarily one macro thing you might have as a primary focus.
We're going to talk about generational issues. We're going to talk about his-and-her issues. We're going to talk about types of accounts, locations of accounts and where they need to be held.
Do you need loans for specific things? We arrange everything from aircraft loans to art loans.
So the key thing when we get started is going to be sussing out what it is that the client is looking to do.
What is a common area where families delay important planning?
A lot of times, people will get to the point where they're so focused on selling a business that they don't necessarily think about what happens once that liquidity event occurs.
There's a lot of pre-planning that can go on for years ahead of time before there's a letter of intent out there, whether it's forming a family-limited partnership and putting discounted-valued shares in there, or creating some different charitable accounts early and up front, or having those discussions about what that sale looks like and what after the sale looks like.
Quite frequently, spouses have differing opinions about what their post-sale life looks like. They'll neglect to understand how integral a company or a company title is in their psyche and in their self-identification. Going through that process of understanding what the back side is going to look like is important.
The wisest thing we can do early on in a conversation is ask good, open-ended questions to try to identify both joy points and pain points that clients have in terms of the way their current situation is structured so that we might help offer different alternatives. Our real goal isn't to be prescriptive about it as much as it is to lay out, "Here's the situation, and with this path, here are the potential strengths and potential drawbacks of Path A versus path B versus path C."
What else aren't families expecting when they sell a business, and how do they need to adjust?
When they've just sold a business, they're going through a grief process that many entrepreneurs and executives go through when they go through a business transition. And quite frequently what we'll talk about is they've spent a lifetime building and managing a business, and now they're building and managing wealth. And while there are a lot of parallels, there are also different advisory services that need to come into play. You might need a different suite of accountants and lawyers to help manage some of the liquid assets in and around managing taxes, planning and cash flow.
What comes into play when planning investments for an entire family?
We work with each generation to understand their hopes and dreams and goals, their lifestyles and what it takes to sustain those lifestyles.
Then, we talk about what kinds of asset allocation they're comfortable with — how they may or may not want it tilted. We talk about impact or environmental, social and governance issues.
Someone might come to us with an existing portfolio, and that brings us to other questions: Are there certain assets, certain allocations, certain things in this portfolio that are sacrosanct, where you don't want them disturbed? Are there outside assets that we need to accommodate, such as real estate that's generating cash flow in one area of the portfolio, that we're not going to want to double up with in other parts of the portfolio. It's a very bespoke business.