Michael Greer, the new president of FundEx Investments Inc., says he’s tweaking the dealer’s business model in a change that reflects the industry’s trend toward the mixing of product development and distribution.

“It’s a change from the previous model — fair enough,” says Greer, who is well versed in marketing lingo from his long career on that side of the industry. “But I believe it’s a positive. We are in the process of enhancing the overall value proposition for advisors.”

FundEx advisors could always say they were as independent as possible, free from the pressure to buy certain products that support their dealer’s bottom line. They paid a flat fee for back office and compliance in exchange for 100% commissions, while the company’s 83% majority shareholder, Industrial Alliance Insurance and Financial Services Inc. , remained at arm’s length, never close enough to float products across advisors’ desks.

Now, with Greer’s arrival at the Markham, Ont.-based firm, that’s set to change. Greer says he’ll provide the company’s advisors with products — such as best-of-breed retail wrap products and other products and services that might work in a fee-based platform — after seeking their input. And even though the topic of advisors owning shares in the firm has not been up for discussion at this point, he says, “Everything’s possible.”

Currently, FundEx advisors pay $18,000 annually for back office and compliance. They will still be required to pay the same amount after the dealer’s business model is changed but, Greer says, he wants to make that money work better. He’ll introduce more services — such as sales training and tax and estate planning — to help advisors go after more assets from wealthier clients.

“In other words, I’m not putting any old product on the shelf. [The offerings are] going to reflect the input and thought of advisors and what it will ultimately be that they need to battle for market share,” Greer says.

If the edict has come down from Industrial Alliance, it’s being met with ground support. Some FundEx advisors say they’re willing to taste homemade jam as long as it’s not force-fed; for his part, Greer says, he has met with most of the 250-member strong sales force and they say its high time they tried selling their own products.

“The overall comment I had was that FundEx and [Industrial Alliance] have already missed an opportunity to build products that represent the needs of associates,” he says.

The 42-year-old Greer, who has lived in Toronto all his life, arrives at FundEx after a short stint with Marquest Investment Counsel Inc. , a small institutional firm.

He met executives at Industrial Alliance a few months earlier, near the end of his sales and marketing experience at BLC-Edmond de Rothschild Asset Management Inc. Greer helped broker the $79-million sale of BLC to Industrial Alliance from Laurentian Bank of Canada in 2005.

“We launched six international funds in 2000,” recalls Greer of the joint venture between BLC and Laurentian. “We grew that from zero to about $2 billion in [institutional and private client] assets.”

It’s that sort of experience in growth and expansion that some FundEx advisors like about Greer, who started in the business as a broker in 1986. He had been with Strategic Value Corp. from 1996 to 1999 — a time in which the firm’s assets grew from $1.8 billion to $3.7 billion. He was involved with the integration of O’Donnell Investment Management Corp. and led that firm’s sales and marketing team for a short time before the Vancouver-based Nova Bancorp Group bought it.

“I bring more of a sales and marketing skills set, based on where I’ve been over the years,” says Greer, adding that FundEx has added a dozen advisors since he started at the beginning of January. “An executive’s job is to grow the top line, and that’s what my goal is.”

It was in the middle of December 2005 that Greer, who is married with two sons, took the call from Industrial Alliance. David Vowles, who had been president for just less than four years, was on his way out. The writing was on the wall, perhaps, when Quebec City-based Industrial Alliance bid in early December for Clarington Corp. , the mutual fund manufacturer it soon bought for $214 million. Vowles had been a staunch supporter of the “absolute independence” model.

@page_break@Vowles had taken the reins at FundEx in April 2002, about the time Industrial Alliance increased its share of FundEx to 75% from 25% and the Ontario Securities Commission had recently slapped a “cease hiring” order on FundEx after it discovered some basic problems during an audit in 2002.

“I was brought on to steward FundEx through a transition period and to re-engineer it, to some extent, to raise the standard of compliance in the dealership to meet challenge of a new decade in this industry,” says Vowles, who has remained at FundEx as an associate. “That was my big accomplishment.”

Increased regulatory vigilance followed the dot-com boom and bust; and some advisors say they saw the outgoing president as a good cop and an administrator but not a deal-maker. Vowles beefed up compliance, making FundEx somewhat of a model for the OSC. As a result, he joined the committee struck by the regulator last year to sort out the Portus Alternative Asset Management Inc. scandal.

Although FundEx appears to be drastically changing the way it does its business, other dealerships under the flat-fee model, including Oakville, Ont.-based FundTrade Financial Corp. and Independent Planning Group, will carry on with the way they do business currently. IE