The Key Steps for Enacting Positive, Sustainable Change

Across the country, the receipt of settlement proceeds in indigenous communities is bringing with it opportunities as well as challenges. As the T.E. Wealth indigenous services team has discovered, effective stewardship of this newfound wealth requires much more than prudent investment management.

Changes of historic proportion are taking place in indigenous communities across Canada with the creation of trusts resulting from Specific Claims Settlements, Gaming Revenues, Impact Benefit Agreements and other resource sharing opportunities. From our existing relationships with many indigenous communities across the country, we know that the resulting income and capital generated from within these trusts have the potential to transform a community into an economically self-sustaining and self-governing entity, but only when managed effectively. We also recognize that the opportunity can easily be lost, especially if the community and its leadership are not equipped or prepared for the coming change. As a result, the role of T.E. Wealth indigenous services goes well beyond traditional investment management to be part of the larger solution of helping these communities realize positive and sustainable change.

Assessing community readiness

Effective investment solutions remain a key component of what we can offer indigenous communities but before making any recommendations or suggesting strategies, there needs to be a thorough understanding of the community’s needs and wants. In our experience, it is crucial that there is an understanding of the community’s immediate and long-term priorities. Whether or not there is a vision for the community and a plan, the community’s capacity for, and knowledge of, financial management, how the community is organized and what the mechanisms are for gaining consensus and reaching decisions are all important considerations that must be addressed. We continue to work with indigenous communities ranging from a few hundred people living in an isolated locale to several thousand people operating within a thriving resort community. The pictures that emerge from our assessments are as diverse as the communities themselves. Yet it is only from this vantage point that a realistic assessment can be made as to what needs to be in place before money arrives, if a lasting legacy is to follow.

In our view, it is vital that leadership within the community develop a vision and community plan that is understood and agreed to by the collective. This will involve much discussion, research and communication with the broader community before consensus can be reached. Our independence and objectivity allows us to work collaboratively with community leadership and trustees to initiate the necessary due diligence and identify external firms that have the experience and appropriate expertise to assist in the development of a comprehensive community plan that is capable of capturing the community’s priorities, aspirations and addresses its challenges.

Educating the community

In most cases, we have found that for community leadership and community members to be involved in effective governance and the responsible management of the settlement proceeds, education is critical. Settlement proceeds will be put into a trust for the community’s benefit and this requires that roles and responsibilities associated with the trust be established and accountabilities clearly understood, especially if members of the community are to play an active role as trustees. Depending on the experience within the community, a formal education strategy that addresses the knowledge gaps may be a necessary. To be effective, education programs can be designed to accommodate a variety of learning styles, demographics, delivery logistics and cultural priorities. In this regard, we have tapped into the expertise of our Financial Education & Employer Services group, to work with indigenous communities in the development of a comprehensive education strategy to meet their specific needs. As corporate partners of indigenous-based, not-for-profit organizations, such as the Aboriginal Financial Officers Association (www.afoa.ca), the National Aboriginal Trust Officers Association (www.natoa.ca), and the Canadian Executive Services Organization (www.ceso-saco.com), we are dedicated to extending our support of financial education and capacity building to the member communities of these organizations across Canada.

The Peguis First Nation Treaty Land Entitlement (T.L.E.) Trust is proud to be partnered with T.E. Wealth. The indigenous services team at T.E. Wealth was able to provide objective assistance and advice relative to the planning, preparation and implementation of our Trust. Well beyond just investment support, they helped us assess our community readiness and have provided education to the Trustees, government leaders and to the community members. We have followed a stringent process in order to ensure the successful implementation of the T.L.E. Trust, which has included policy development, formal manager searches, development of operational procedures and professional development. The support and guidance of T.E. Wealth has been evident and appreciated in their sense of community involvement and concern relative to the overall health of the Peguis First Nation.

Sharon Stevenson, Chairperson, Financial Trustees
Peguis First Nation T.L.E. Trust
Peguis, Manitoba

Formalizing the investment process

It has been our experience, that for prudent investment management, a formalized investment process, beginning with an investment policy statement, is best. The investment policy statement outlines the investment objectives and expectations of the trust and is in keeping with the community vision and plan. The policy statement will guide investment strategies including spending policies, return objectives, acceptable risk, eligible investments and the general portfolio construction. Other key components of an effective process include the ability to look objectively at the wide range of investment management firms that are available to the trust. Selecting investment counsellors who can offer unbiased, objective advice ensures that the needs of the community always come first. And throughout the process, they should be able to provide leadership, trustees and other key decision makers with clear reports, including the analysis of investment performance, to ensure the trust and community remain on track to meet their long term goals and objectives.

Ongoing governance and monitoring

Accountability to the community is paramount and that means ensuring both good governance and effective monitoring of all aspects of the community plan, including managing settlement proceeds. A fully transparent governance process supported with clear and frequent communications to the community membership will go a long way in building trust and continued support for the vision of the community and its long-term plan.

When these key steps are followed – assessing community readiness, providing education, formalizing the investment process, and ongoing governance and monitoring – the community is more likely to capitalize on the opportunities that accompany these historic settlements, bringing about positive, sustainable change for generations to come.

T.E. Wealth indigenous services works collaboratively with indigenous communities and their other advisory partners to ensure settlement proceeds can be managed effectively to further the community’s long-term goals. For more information visit our indigenous services section.

Jack Jamieson, Vice President, indigenous services, T.E. Wealth, Waterloo, Ontario

Ismo Heikkila, CFP, National Director, Financial Education & Employer Services, Toronto, Ontario

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