Although many financial services companies are struggling in the current economic environment, Markham, Ont.-based E.E.S. Financial Services Ltd. is welcoming new clients.

That’s because — as clients search for unbiased financial advice — E.E.S. is leveraging its position as one of Canada’s oldest fee-only financial planning firms. E.E.S. celebrated its 40th year in business in 2008.

“Right now, people are frightfully concerned about whether they can afford to retire,” says John Gibson, president and founder of E.E.S. “We can help them identify financial independence. We are getting all types of business referred to us by other clients, as well as by the investment community.”

So, what makes E.E.S. so referable? The reason, says Gibson, is that E.E.S. doesn’t sell any products. Similar to lawyers or accountants, E.E.S consultants sell only their time. In fact, all E.E.S. advi-sors are required to give up any sales licences they hold the minute they join the firm.

It is a requirement about which Gibson is passionate. Not once has he been tempted by the prospect of the rich commissions that come with selling products.

“‘Vive la difference’ is what I always say,” Gibson says. “And the difference is that we don’t sell anything. That gives us a wonderful advantage.”

A client’s cost of service is based on the amount of time the advi-sor spends with the client and the hourly rate of the advisor developing the financial plan. Hourly fees range from $150 to $450. Or clients can opt for a fixed fee-for-service. Gibson says the latter is the choice for the majority of E.E.S.’s clients, who range from individuals to corporations. Corporate clients especially find the flat fee convenient.

“Clients who may have a complicated situation, or who just like to talk, don’t want to be paying an hourly fee,” he says. “They prefer the up-front, all-inclusive fee.”

E.E.S. employs 25 staff who offer a wide variety of services in additional to financial planning, including tax returns, wills and estate planning, divorce finances and retirement planning.

Although many firms advertise themselves as fee-only, Gibson says, they still have a sales component to their platforms. Ac-cording to a survey conducted by the Toronto-based Financial Planners Standards Council, only 10% of advisors offer advice on a fee-only basis. Some firms charge for their services based on assets within the portfolio, or get additional compensation for referrals. As far as Gibson can tell, E.E.S. has few real competitors.

“I don’t feel we have any strong competitors in the marketplace because there are a number of people who play with the terminology ‘fee-only’,” Gibson says. “Our fees are not in any way, shape or form based upon the underlying value of the assets.”

E.E.S. does work closely with the brokerage community. If clients want to know where they can go to buy an investment product, E.E.S. advisors are able to introduce those clients to firms that suit their needs. If the clients don’t find any of those firms suitable, they have the option to go elsewhere.

PART OF THE PROCESS

“We act as the buffer in the set-up. If the client has an existing relationship with a broker, we don’t want to upset that relationship,” Gibson says. “We just want to become part of the relationship and the decision-making process.”

E.E.S. often serves clients who are having a hard time understanding their own advisors, or who have money at multiple institutions and do not want to disclose the whole portfolio to any one advisor. By consulting with E.E.S., clients are able to get a comprehensive overview of their finances and goals, as well as avoid duplicating their investments.

“The key to what we do,” Gibson says, “is that we become the clients’ chief financial officer.”

In today’s turbulent markets, Gibson knows that people are worried. Advice with no hidden agenda, he says, gives clients who may have fundamental flaws in their portfolios the ability not only to receive solutions that are inexpensive and completely confidential but also to be at ease that they are discussing their portfolio with a consultant who doesn’t push products.

Gibson is such a staunch believer in unbiased advice that E.E.S. launched its own financial planning software this past year. For a $300 fee, the average client completes an extensive questionnaire, then obtains a personalized financial analysis from his or her consultant that runs 50 to 60 pages in length. Gibson calls the resulting analysis a “personalized version of the Wealthy Barber”; it shows clients where they are, where they are going and where they must be to achieve their financial goals.

@page_break@Gibson, 68, began his career in 1961 at Montreal-based National Trust Co. as an executive trainee. It was during this experience that he conceived with the idea of providing “objective, unbiased advice that was completely free of outside financial influence or incentives.” The light bulb switched on when a client asked him where he could find such a service.

After extensively researching the Canadian market, Gibson realized that although such a firm didn’t exist, there was definitely a need for it. So, being a young, aspiring 28-year-old, he says, he jumped in with both feet, even making a trip to a U.S.-based fee-only firm to learn about its philosophy and practices.

Gibson quickly decided this business model was for him and subsequently opened Executive Estate Services Ltd. in Montreal in 1968. In 1979, he relocated the firm’s headquarters to Toronto and in 1993, changed the company’s name to E.E.S. to reflect more closely the company’s growing focus on financial planning.

In 2000, Gibson moved the firm to the Toronto suburb of Markham, which reduced his commute and allowed him to spend more time with his family.

Along with golfing and travelling the world, Gibson, his wife Diane and their three sons are all avid scuba divers who have a passion for shark dives. In fact, to celebrate E.E.S.’s 40th anniversary, Gibson took his staff on a week-long Florida vacation during which everyone was able to dive together as a team.

Gibson and his wife also have donated $500,000 to the Markham Stouffville Hospital in honour of the firm’s 40th anniversary. The money will help support the hospital’s expansion and redevelopment.

IE