“Oh, you’re the fee-based guy.”

Marc Lamontagne hears that phrase a lot. Sometimes the tone is friendly; more often, it’s not. And he understands why. Lamontagne knows the vast majority of financial advisors in Canada make their living largely through commissions on the products they sell. And many advisors view the fee-based alternative as a challenge.

Lamontagne, 48, certainly doesn’t mind the branding. The Montreal-born certified financial planner, registered financial planner and financial management advisor is one of three partners in Ryan Lamontagne Inc. , a fee-for-service financial planning firm based in Ottawa. Six years ago, Lamontagne self-published To Fee or Not to Fee, a step-by-step guide for setting up a financial advisory business based on charging clients for advice rather than receiving commissions from product sales. A second, expanded edition was published in 2007.

The guide’s basic premise: it really is possible to convert from a product-based practice to one that depends on fees.

“Many are surprised to discover that fee advisors actually make more,” says Lamontagne. “It’s because we can set the price for the service.”

Lamontagne did not set out to be a financial planner, let alone one with a reformer’s bent. He left high school after Grade 11 to study political science at Mount Allison University in New Brunswick but didn’t finish the program. “I was too young and restless,” he says, adding that he spent the next couple of years traveling across Canada and supporting himself with odd jobs.

At one point, he set his sights on a position on Parliament Hill. His older brother, Paul, worked there as a special assistant for Don Johnston, a member of Parliament for a Montreal riding. However, Paul suggested that Marc try banking instead. Lamontagne gave it a shot, eventually persuading a Royal Trust branch to hire him as a trainee teller in 1989. He rose through the ranks, looking after clients’ mortgages, investments and personal banking.

However, Lamontagne saw little opportunity to do truly rewarding work. “The pay wasn’t great,” he says, “and there was always a sales campaign of some sort going on.”

Even the branch manager’s salary looked meagre. One day, a financial planner walked into the branch and told Lamontagne he wanted to buy some guaranteed income certificates for a client. “Here was a guy doing what I wanted to do,” Lamontagne says. “He was providing financial advice but working directly for his clients.”

In 1994, Lamontagne joined Regal Capital Planners (now part of Bank of Nova Scotia) to pursue his new career. After two years, he realized he wasn’t making much money. “I thought I was in the business of selling financial advice, but I was really being paid for selling mutual funds on a deferred sales charge basis,” he says. “I wanted to work under a model in which my interest would be directly aligned with the client’s, not that of the mutual fund or insurance company.”@page_break@Lamontagne met Thomas Ryan, CFP, during a job interview. Ryan advised corporate clients and also ran a fee-based financial planning and tax practice on the side. That business included providing retirement seminars to members of the Canadian Forces.

Lamontagne joined Ryan’s business as an associate in 1996. Two years later, the two men formed Ryan Lamontagne Inc. At first, Lamontagne found himself giving financial seminars at military bases across the country and in Germany — an unexpected gift for someone who had rarely travelled overseas. “I thought I’d died and gone to heaven,” he says.

The military seminars led to contracts with Shoppers Drug Mart Inc., Nortel Networks Ltd. and other corporate clients. During the tech boom in the late 1990s and 2000, Lamontagne conducted more than 100 retirement seminars, all the while managing a growing practice. The seminars were key to building up his firm’s business, which now includes managing the financial affairs of more than 200 high net-worth families.

Indeed, the firm had added so many clients that its focus shifted entirely from corporations to individuals. The load is shared by three partners — David Burnie, an ex-soldier, came on board in 2000 — and an associate with a background in corporate accounting. There are four support staff.

So, what sort of client pays a retainer of $750-$2,500 annually for financial planning and tax advice? Roughly one-third of the firm’s clients are self-employed, one-half are professionals and the remainder are retirees. The partners also earn asset-based fees for managing their clients’ investments. The firm earns 1.5% on the first $500,000 of assets, 1% on the next $500,000 and 0.75% on portfolios in excess of $1 million.

“We earn no commissions or any third-party compensation for managing the portfolios,” Lamontagne says, “The only fees we earn are those we charge the client.”

Lamontagne personally looks after about 70 families; but, he points out, the clients actually belong to the firm, not the individual partners. He says this approach encourages more teamwork on the various files. For instance, Lamontagne is the go-to guy when the issues involve stock options and exchangeable shares. “I do well with busy, high-tech professionals,” he says.

Lamontagne hosts workshops promoting the fee model, and he also promotes his ideas to other advisors on the seminar circuit. He is scheduled to speak in May at the annual meeting of the Conference for Advanced Life Underwriting, being held in Ottawa.

Lamontagne’s wife of 10 years, Diana Bourke, is a CFP with TD Waterhouse Canada Inc. but has no role in Lamontagne’s practice. Says Lamontagne: “It is nice to come home and talk about your day with someone who understands what you do” — even if she does work for one of those operations that depend on commissions. IE