Money, Luxury, and the High Life in Vancouver, B.C.

Peering in on the B.C. luxury market and lifestyles of the rich: luxury travel, big giving and even bigger banking.

Let’s face it: things are rough. If the economy were a celebrity, it would be Britney Spears in her head-shaving, rehab-going, strapped-to-a-gurney days. Hit with sagging investment portfolios and declining house values, British Columbians have seen an across-the-board hit to their net worth in recent months and are tightening their purse strings accordingly. But all pain isn’t created equal. The well-to-do, while doing with less, still have a disproportionate amount of disposable income – and, for businesses and organizations catering to the wealthy, figuring out how to get them to part with that cash has become crucial.

Those profiled in the following pages are intimately in tune with the needs and desires of B.C.’s moneyed class: the BC Cancer Foundation, with its intensely focused and collaborative approach to fundraising; BMO Harris private banking, with its personal

and specialized client relationships; and Mason Horvath Inc., with its sky’s-the-limit attitude toward customer satisfaction. Each offers unique insights into tapping a consumer group that’s sophisticated, demanding and extremely valuable. Of course, any marketer will tell you that wealthy consumers are not all alike; Environics Analytics Group Ltd.’s Prizm Marketer’s Handbook, for instance, gives them names such as “Cosmopolitan Elite,” “Furs & Philanthropy” and “Asian Affluence” to differentiate. In recognition of such distinctions, our special package includes profiles (below) of three types of affluence: one who has inherited family wealth, another who immigrated from overseas to build his multimillion-dollar empire and a young entrepreneurial couple just now beginning to enjoy the trappings of success.

High Fliers: The Luxury Travel Provider

There’s no way to find Mason Horvath Inc. by accident: the business has no storefront, no signs, and does little to no advertising. And that’s just the way its president, Dean Horvath, wants it. “We don’t want our time taken up with people who are just browsing,” says the 35-year-old executive, who founded the luxury travel agency a year and a half ago with former partner Claudia Mason, whom he bought out last October. Holding court in his 14th-floor office at Granville and Hastings, Horvath explains the discriminating nature of his business. “We want to selectively choose our clients and have them choose us and spend time working to build the relationship, as opposed to just firing our name out there and getting random people calling us.” Unlike discount travel agency Flight Centre, where Horvath previously worked in corporate travel, Mason Horvath isn’t about catering to the cost-cutting needs of cash-strapped trekkers. Rather, the company is intensely service oriented, specializing in complex business and leisure-travel itineraries for busy corporate executives for whom economy class is not an option.

A low profile is all part of the mystique of high-end travel, where 24-hour individualized service is key and no request is too outlandish. Want to spend a day with a pal taking part in an aerial dogfight with an Italian-built fighter? That’ll run you upward of $6,800. How about 24 hours in Europe pretending you’re James Bond, complete with MI6 training, helicopter flights and a terrorist combat mission? A cool $63,500. Or maybe a flight into outer space? In August, the agency was accredited to represent Virgin Galactic LLC, a division of Virgin Group Ltd. that will start offering passenger flights into space starting in 2010. The cost? A mere $200,000 for a seat on the shuttle. Today’s moneyed exec, explains Horvath, isn’t interested in a comfortable luxury holiday so much as the experience of a lifetime. In an age when airlines have been folding and hotel chains are bracing for sharp downturns, elite travel seems to be in a league all its own.

After $8 million in revenue in his first year of operation, Horvath is predicting he’ll pull in $10 million this year, in spite of the current economic climate; the super-rich may be a little less super, but they’re still willing to splurge. The company has 627 clients, says Horvath, who spend an average of $3,660 per business trip and anywhere from $5,000 to $80,000 per person for a leisure vacation.

“We spend an hour with people when we plan their vacations before we even talk about what or where,” he boasts, “just to find out what kind of trips they’ve gone on in the past, what they’re looking for in this holiday, what their likes and dislikes are.” Mason Horvath will also call hotels before their clients arrive, informing operators that a VIP is staying there and asking them to go above and beyond in serving them. “In the travel industry, 95 per cent of companies are streamlining everything . . . which works for 95 per cent of travellers,” he observes. As for the other five per cent? Well, your space shuttle awaits. [pagebreak]

Big Givers: The Philanthropic Foundation

In a 2006 survey by Concerto Marketing Group Inc. and Stenner Investment Partners of 165 Canadians with a net worth of $10 million or more, entitled the TrueWealth Report, 69 per cent of respondents reported donating more than $100,000 in the previous year. But talk to local philanthropic groups and they’ll tell you the days of hanging out your hat and expecting the well-to-do to simply hand over their cash are gone. Today’s benefactors are more demanding, more involved and more high-maintenance than ever before. “It’s very different than it was 50 years ago, 30 years ago – even 20 years ago,” says Lisa Pullen, vice-president of development for the Vancouver Foundation.

The new philanthropy, she says, “is very hands-on, very now: like, let’s do the project, let’s fund it and let’s do it.” For Nicholas Locke, vice-president of development at the BC Cancer Foundation, the passing of the philanthropic torch to the baby boom generation means that a lot more time and effort is required to convince the well-to-do to give – and keep on giving: “What we’re seeing now is the boomer population starting to become more active in philanthropy, and it is a different experience than dealing with their parents, who tended to be much more trusting of organizations.” In its last fiscal year, 92,000 individual donors gave a total of $27.5 million to the foundation, the largest of these being three gifts between $500,000 and $1 million, according to the organization’s 2008 annual report.

The way Locke describes it, the recruitment of wealthy donors is something of a courtship. It starts with looking at the current donor base: those who have contributed via lotteries, via tribute giving to honour a loved one or those who have felt compelled to give because of a personal experience with cancer. The database from themed events such as the Weekend to End Breast Cancer or the Ride to Conquer Cancer is another treasure trove of leads, as these events tend to attract “well-educated, higher-income, type-A personalities who set high targets for themselves,” according to Locke. “You try to identify [wealthy] individuals because of where they live, what their name is, their pattern of giving over the years. Those kinds of things indicate whether, perhaps, they have the linkage and the ability and the interest to make a larger gift.”

Then comes the phone call and an invitation to a meeting or even a private tour of the research centre, including a one-on-one with top-level physicians or scientists. Finally, there’s the delicate matter of money. “Gifts don’t happen unless you ask,” notes Locke. “That said, the ask, at the upper level, has to be strategic. You can’t ask unless the person is ready.” But it doesn’t end there. “After the gift has been made, there’s the stewardship, which is proving to the donor that their funds have been used in the way they were intended,” says Locke. The boomers, he notes, have different expectations and less patience. “This was the generation that questioned the country, their government organizations. . . . They’re going to want to see results and accountability back if they’re going to continue with that relationship. And if not, they’re going to go somewhere else.”

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Legacy Builders: The Private Banker

“The ’80s are over,” opines Diana Reid, senior vice-president and managing director of BMO Harris Private Banking, in her large company boardroom. “People are really focusing on values and not on keeping up with the Joneses – it’s quite the opposite.” Today’s wealthy families, insists Reid, are more interested in philanthropy and ensuring the security of their children than living extravagantly and showing off their bling. “I’ve never known anyone to say money is the most important thing in their lives,” she adds. “It is always family.” As Reid explains, there are four c’s to wealth – create, consume, conserve and convey – each representing a kind of life stage for the well-to-do. But helping clients navigate the four c’s isn’t a cookie-cutter process for BMO Harris, which as of Oct. 31, 2008, was managing over $10.8 billion in assets for high-net-worth Canadians with an average investment portfolio of just under $2 million.

“We’re very specialized, very focused,” says Reid. “We’re not trying to be all things to all people. . . . The main thing for us is families and succession planning.” The biggest challenge, according to Reid, is getting those high-net-worth families to walk through the door. That’s where community involvement comes in. Rather than blow wads of money on expensive marketing campaigns, Reid explains that sponsorships and community involvement is at the heart of BMO Harris’s brand awareness strategy. “We want to be involved in organizations where it makes sense for us to be, like the Canadian Association of Family Enterprise,” she says, referring to a major national member-driven organization that assists families in business. “We’re very much involved in professional associations, like the Society of Trust and Estate Practitioners,” she goes on. “We have been supporters of UBC’s Sauder School of Business and their Business Families Centre from the get-go.”

BMO Harris sponsors the Business Families Centre’s Family Legacy Series, which hosts discussions by prominent families that have included, in the past year, the Molson and Shaw families, among others. In addition, the firm puts on its own seminars, including full-day workshops on financial fluency for the heirs of large fortunes. As Reid points out, if BMO Harris is involved in organizations that are valued by its clients and prospective clients, it goes a long way to attracting and ensuring long-term loyalty. “If we’re there contributing sweat equity as well as dollars, that is the best way of growing our business,” she says. “It’s not just showing up and having a glass of wine. That’s not going to get you anywhere.”