December, 2009 | Straight answers

Second Opinion Rebrands as Weigh House Investor Services

On November 4th, Second Opinion changed its name to Weigh House Investor Services. This change is reflective of our growth as a company and the increasing breadth of our client-centric services.

When Second Opinion was formed, it was one of the few organizations asking investors to take a serious second look at how their portfolios were performing. Overtime, it became increasingly apparent that investors need more than second opinions, more than a reliable source of sober second thought.

We discovered they needed us first – at the beginning of their investment process – to design strategies tailored to their financial goals, but rooted in sound investment principles.

Realizing the benefits of our independent counsel, clients began asking us to address a wider range of issues related to their financial well being and we have expanded our advisory services to meet their evolving needs.

Our New Name

Weigh House Investor Services takes its name from history.  Weigh houses were built before international standards for weights were established. Local goods were brought to a central location where they were accurately measured and valued.

What would it have been like for farmers before standardized weights and measures – a time when a single sack of grain carried differing values depending upon who owned the scale upon which the sack was laid?

This is where most individual investors find themselves today. They have few – if any – independent measures by which to assess the strength of their investments and gauge their financial progress. This is where we can help.

The Weigh House Promise

Like the Weigh Houses of the 1600s, we are a source of true and honest assessments. We deliver straight answers to Canadian investors. Free of incentives to sell investment products, we stand with them to ensure they understand the real value of their current positions and give them expert counsel as to how they can get to where they want to go.

No financial product pitches. No hidden fees or commissions. No biases. We are free to tell the truth.

New Name for Our Company, New Look for Our Newsletter

As you have no doubt noticed, our newsletter has a new look and a new name as well. Straight Answers is our promise to Canadian investors – we are uniquely positioned to deliver the ‘unvarnished truth’ to our clients, and our newsletter is one of the many mediums by which we do that.

This special edition of the newsletter is different than most in that it focuses on recent developments within our company. Future editions will continue to address topics related to personal finances, investments, capital markets and other issues that are of interest to our readership.   

The Differences That Make Us Credible

Weigh House’s unique position within the investment advisory industry is the result of a number of factors that characterize the company’s service offerings and business model.   

  • We solve investment problems without selling investments. Our counsel is therefore untainted by conflicting interests or hidden agendas to earn sales commissions or trailer fees for ourselves.
  • We offer greater transparency in our client relationships. We provide a clear presentation of investment returns (against appropriate benchmarks), risks and our fees.
  • We enhance clients’ understanding of investments. We do not gloss over the fine points or hide behind jargon. Our desire is to coach, educate and explain. In doing so, we hope to empower clients to take control of their financial security and better manage other advisory relationships.
  • Our investment advice is rooted in universally-accepted investment principles, favoured by institutional money managers. These principles were designed for the benefit of investors, and are contrary to the best interests of commission-based investment brokers.
  • We are a fee-for-service company and work only for our clients.

Weigh House Investor Consultants – Today’s Customers’ Men and Women

“No one can serve two masters.”  Mathew 6:24

In renaming our organization Weigh House, we searched for a historical metaphor to symbolize our value – our promise – to investors. Similarly, in selecting Investor Consultant as the designation for our client service representatives, we again looked to history for inspiration.  Not the European Middle Ages this time, but the early part of 20th century North America.

Individuals we know today as Investment Advisors were referred to as Customers’ Men in the 1920s and 30s.  But there are some significant differences between investment dealers then and now. The Customer’s Man worked for his or her clients, and represented them in their dealings with the firm.  In contrast, today’s Investment Advisor represents the firm in its dealings with clients.  

The Customer’s Man worked in a simpler time, with fewer investment products and less pressure to generate revenues for the firm.  In those days, investment firms were organized as partnerships with the principals’ names over the door.  Wood, Gundy, McLeod, Nesbitt, Burns were real people back then, not suffixes to faceless bank-owned subsidiaries like CIBC Wood Gundy, ScotiaMcLeod and BMO Nesbitt Burns.

The Customer's Man had clients' best interests at heart, and would marshal the firm’s resources for their benefit. Clients’ objectives and needs were first and foremost, and solutions were crafted to meet those objectives and needs. The Customer’s Man took pride in the position as the title was considered a badge of honour.

Today’s Investment Advisor cannot be yesterday’s Customer’s Man. The retail investment business has transformed from a tradition of personal relationships to a mass-market sales model. Advisors are no longer entrepreneurs working for clients, but rather employees of their firms. They operate in an environment where the firm’s commercial interests take precedence over all else. Their main objective is not to serve clients’ best interests, but to get a bigger share of their wallets.

In 1936, William O. Douglas then Commissioner of the Securities and Exchange Commission, gave a speech at the New York Stock Exchange Institute. Many young employees of the Exchange and its member firms were in attendance.  He warned them about the “subtle and subversive influences at work to corrupt the high functions which business, finances, and other professions perform”.  When he talked about corruption, he did not mean “gross extravagances in the form of larceny and the like” but rather “the practice of gentlemen teaching youth gentlemanly ways of redistributing the wealth of the clients so that they may get an inordinate share of it in extravagant ways.” He ended the speech by talking about the conflict of interest in the industry and the ethical way in which Customers’ Men must conduct themselves.

“In sum, if the institution of Customers' Men is to survive,
it must have meticulous regard for the standards of conduct governing fiduciaries. It cannot survive if it ostensibly serves the customers, but actually serves the employees and employers. It must redefine its functions. It must forsake
the idea of salesmanship and concentrate on investment service”

Weigh House Investor Consultants embody the idealism of yesterday’s Customers’ Men. They eschew the systemic conflicts of interest that stigmatize today’s Investment Advisors, and believe that the only way to build mutually-beneficial, long-term client relationships is to always put clients’ needs first. Only after objectively evaluating the full spectrum of their short and long-term interests, is it possible to make genuine recommendations from the heart. In short, Weigh House Investor Consultants realize they can only serve one master.

Do You Really Know Who You’re Talking To?

Over the course of the last 40 years, the stock broker has gone by a number of different monikers, depending on the firm and the popular terminology of the time.  Investment Executive, Financial Planner, Wealth Advisor, Investment Advisor – each of these euphemisms was designed to obfuscate the fact that the title-holder was in fact an investment sales professional, compensated not for the quality of his or her advice, but for the quantity of investments sold.

Obfuscation is never helpful, particularly since choosing the right advice channel and hiring a compatible financial advisor are key investment decisions. An ideal advisor-client relationship should last for many years, so clearly there must be a high degree of trust on both sides of the desk.

At a fundamental level, most investors have a simple choice. On one hand, they can choose to establish advisory relationships with investment sales professionals. Due to the nature of their compensation, sales professionals have influences and motives that do not align completely with your needs and objectives. This conflict of interest is not a manifestation of ill intent.  Rather it is systemic, built into the compensation structures and incentives prevalent throughout the industry. As a result, it is virtually impossible to ignore or avoid.

Alternatively, investors can choose to work with consultants acting as fiduciaries, who operate in environments that are free of conflicting interests. These consultants are at liberty to offer expert counsel that is always in the client’s best interest. Weigh House, with its fee-for-service business model, represents this alternative.

Preparing for Growth

Weigh House Investor Services recently announced the addition of five key executives to its management team. The added senior executive strength comes as part of the company’s national expansion strategy and repositioning as a first source of straight answers for Canadian investors.

Based in Toronto, the company’s management team includes the following recent additions:

  • Clive Smith, FCIA, CFP – Vice President, Business Development. Former President and CEO of Royal and Sun Alliance Financial and Vice President, Assante Wealth Management.
  • Ken Bradley, CMA – Vice President, Operations. 15 years in business process design, large-scale systems implementation and project management.
  • Michael Coholan, CIM, FCSI – Vice President, Service Development and Investment Research. 15 years with RBC Dominion Securities as an investment advisor and portfolio manager.
  • Enrico Visentini, CA, CFA, MBA – Vice President, Finance. Former Chief Financial Officer, Integral Wealth Management and Kingsgate Wealth Management Services; former director, IBT Trust Company.
  • Robert Miskimmin, MBA – Vice President, Marketing. 20 years in marketing, business development, sales and product management.

‘Tis the Season for Good Cheer ...

Finally, all of us at Weigh House Investor Services would like to wish you and your family a joyous holiday season, and a healthy and prosperous 2010.