With potential regulatory changes in Australia and Britain that could result in the elimination of commissions-based selling by 2012, a Toronto-based planning firm is positioning itself for the day that trend hits Canada. Weigh House Investors Services Inc. is aiming to become a leader in fee-only financial planning.

“We are definitely ahead of the game,” says Warren MacKenzie, president and CEO of Weigh House. “We think we are providing a leading-edge service in financial planning. And, right now, it is almost like a perfect storm for our business. The changes that are happening overseas, and even in the U.S., will eventually happen in Canada, and when they do, we will be ready for them.”

Weigh House, formerly known as Second Opinion Investors Services, was established five years ago, when MacKenzie observed an increasing demand among investors for third-party consulting on their investments.

“Canadian investors are overwhelmed and disillusioned by the complex array of investment products being sold today,” MacKenzie says. “There is a very real need for expert investment advice that is sheltered from marketplace incentives, product development and sales targets.”

MacKenzie had found that investors were hesitant to approach their financial advisors with questions about their investments because it was those advisors who had recommended the investments.

“There are millions of people who are looking at their investment statements and wondering if they are doing the right thing,” MacKenzie says. “I felt there was a need for a plain consulting service that provides completely unbiased, common-sense advice.”

The firm has approximately 400 clients across Canada and functions the way a lawyer’s or an accountant’s practice does. Weigh House works on a fee-only model in which consultants charge clients $250 an hour for financial advice. Clients receive an up-front quote of total services needed, which may include financial planning, investment monitoring, portfolio assessment, insurance analysis programs, searches for investment managers and a do-it-yourself coaching program.

The firm does not accept referral fees from money managers or financial advisors, and it provides clients with a choice when making recommendations.

Weigh House advisors can reduce clients’ fees and taxes by an average of $8,700 per year, MacKenzie says, because the firm’s advisors have no vested interest in financial products.


(The firm name refers to “weigh houses,” central locations that provided objective weighing services to evaluate grains and other goods prior to the 1800s, when there were no international standards for weights. Without weigh houses, farmers would have been dependent on the owners of the scales.)

MacKenzie expects to add tax planning, retirement planning and wealth and estate planning to Weigh House’s slate of services. For the upcoming tax season, MacKenzie is in the process of partnering with a group of accountants to provide tax returns for clients.

“A lot of people have a misconception that a business like ours is a one-off situation, in which someone comes to get a second opinion and then they are gone,” he says. “But that is definitely not the case. More than half of our clients stay on to take additional services because once they see the difference [made by] getting advice they know is unbiased, they want to maintain that relationship.”

Weigh House has 24 employees, including 14 consultants, in 12 offices. MacKenzie is looking to expand the company to 250 consultants over the next five years.

This past summer, the firm announced the opening of an office in Halifax — its first in Atlantic Canada — and hopes to announce additional offices opening in Western Canada soon. This year, the firm hopes to bring on 40 to 50 more consultants.

“We have clients in every province,” says Clive Smith, the firm’s vice president of business development. “So, what we want is consultants in every province so we can service our clients locally, as opposed to servicing them all from afar.”

Weigh House has already added a new management team and has recruited approximately 30 new consultants.

“We are getting the best people in the industry approaching us,” says Smith. “We are getting people who are highly ethical and want to get out of the conflict of interest that they are in right now. It is an unavoidable spot to be in because [advisors] are getting paid on what they sell, not their advice.”

Weigh House does not require its advisors to have a financial advisory background, but they must have experience in the financial services industry and they must hold, or be in the process of earning, the certified financial planner designation.

“We do not sell or manage investments,” MacKenzie says. “Rather, we employ proven strategies utilized by institutional money managers to strengthen clients’ portfolios, improve their financial posture and help them achieve their lifestyle goals with minimal risk. We have a model, and a lot of our analysis is done at head office, so the consultant’s role is to bring in the clients and gather the information, which then gets combined with management’s expertise.”

The firm provides training for all consultants coming into the firm and has been running regular training sessions to accommodate the new talent that has been recruited over the past few months.

Five senior executives were added to the management team this past summer. The team will not only help reposition the firm’s image but also support the national expansion plans and added services.

Smith is well known in the financial services industry, with experience in both the investment and insurance worlds. Previously, he was vice president of wealth and estate planning at Assante Wealth Management (Canada) Ltd. Prior to that, he was president and CEO of Toronto-based Royal & Sun Alliance Insurance Co. of Canada.

“When I saw what Warren [Mac-Kenzie] was trying to do,” Smith says, “I saw that there was a real opportunity to provide something to investors that isn’t being offered at the moment, and I wanted to be a part of it. I hope to bring [my] experience in the industry along with quite a few connections and the ability to strike some alliances.”

Michael Colohan, vice president of service development and investment research, had spent 15 years managing a large book of clients at RBC Dominion Securities Inc. and brings a wealth of investment knowledge to Weigh House. Other managers include Ken Bradley, vice president of operations; Robert Miskimmim, vice president of marketing; and Enrico Visentini, vice president of finance.

Although Weigh House’s management team is focusing on building its base of individual clients, the firm is also looking toward entering the corporate space, Smith says: “We believe there is a real market in corporations, especially those that have defined-contribution pension plans and need to educate their employees, [to] help them invest properly and construct portfolios on their own.” IE