For centuries, some of the world’s most accomplished and wealthy families have managed their fortunes through what’s known as a customized, holistic, multi-generational “family office” approach.
Quietly and successfully, from offices in Nepean, the boutique firm IP Private Wealth has done the same for the past quarter century through highly personalized, values-based, and integrated advisory services to high-net-worth clients.
The firm brings professionals across a full range of wealth management disciplines under one roof, including investing, governance, tax, legal, liquidity events, family transitions, and philanthropy.
“We apply the family office concept to a client that may have a net worth of $25 million. To achieve it, we rely on our expert internal team, but also long-time, trusted external advisers,” says IP Private Wealth’s founder, Richard Kluska. “Everything is client-driven.”
Many of IP Private Wealth’s clients have a net worth above $10 million, and roughly 180 families represent 90 per cent of the firm’s assets under management. The vast majority of clients are in Ottawa and the Ottawa Valley.
“Ottawa has a tremendous amount of quiet wealth, but it’s not conspicuous,” says Kluska.
IP Private Wealth’s disciplined approach to investing
As business owners, most of IP Private Wealth’s clients have sufficient private equity and own real estate. Investing in public markets complements those asset classes to provide returns that build steadily over time – enabling clients to pass wealth on to the next generation while engaging in philanthropy.
“Our expertise is as a boutique firm that does very well for that target client,” says Kluska.
The firm invests for long-term growth. Think of the movie Moneyball: it looks to win by getting on base often, not by swinging wildly for home runs. IP Private Wealth’s modus operandi is to buy an interest in great companies, selecting Canadian and U.S. dividend-paying stocks using rigorous, quantitative factor-based analytics. It’s a very disciplined process: If a stock fails the fundamental screens, it’s sold.
“We remove the emotions of greed and fear that paralyze most individual investors,” says Habib Saikali, the company’s chief investment officer who has held senior positions at other firms in Toronto and Ottawa. “Our target market really connects with our disciplined and consistent approach to investing.”
It’s a methodology that seems to be working: When Saikali joined IP 12 years ago, the firm had about $120 million invested in public markets. Today it has more than $750 million.
IP Private Wealth inherently understands the challenges and preferences of business owners, Kluska adds, because they’re business owners, too. “Our decisions on the public markets are quite similar to decisions that the business owner makes for their own company,” he says.
The firm often advises on assets north of a billion dollars, after factoring in their clients’ entire net worth.
Typically, a high-end business owner has accountants, lawyers, executives, and a banking relationship – “but everybody’s reporting in their own silo,” says Kluska. “We work with our clients’ teams of advisers and provide a holistic report to help them achieve their objectives.”
The company provides clients with an annual report of their net worth, cash flows, income sources, and much more, on top of quarterly meetings.
‘Professional discovery’ builds decades-long relationships
The firm places extraordinary value on getting to know its clients. In contrast to the investment industry’s standard brief questionnaire, IP Private Wealth’s professional discovery process often involves several meetings over the tenure of the relationship. “You are always learning something new about your clients.” says Kluska
It’s a quantitative process – about the client’s income, assets, and business forecasts – but also qualitative. This allows IP Private Wealth to offer new clients a comprehensive and well-crafted plan that reflects much more than their financial goals.
“I ask who you are, where do you want to be, what’s important to you, about philanthropy,” says Kluska. “We have blue-sky discussions. I ask ‘What keeps you up at night? Where might surprises come from?’”
In that respect, IP Private Wealth’s client onboarding process is more than a transfer of knowledge – and it transcends dollars and cents. Kluska says these ongoing conversations become “philosophical, emotional, and spiritual”.
“Our relationships with many clients have lasted for decades,” he adds. “We know their family members. We get involved in our clients’ lives at deep levels. It’s fulfilling.”
A family-focused, responsible approach to wealth management
For example, the nature of family wealth management for high-net-worth families might mean that “you’re involved in telling an 18-year-old in a meeting that they have a million dollars in an account they didn’t know existed,” he says.
It would be unthinkable for the IP Private Wealth team – or their clients – to do that without also guiding that young person on how to be financially responsible.
“So, we get very involved in teaching them about prudence, discretion, and the responsibilities of wealth,” says Kluska.
Despite his decades of experience, however, he says he doesn’t have a canned elevator pitch when he meets with wealthy families or individuals looking for better management.
“I’m not a marketer,” he says, chuckling. “What I would say is, ‘I’m naturally curious as to why you’re not happy. Why don’t we have a coffee, and see if we are philosophically aligned and if we can help you.’”