The Rural Voice, 1986-02, Page 8A DIGNIFIED SOLUTION
TO FINANCIAL WOES
Ron Phillips, president of Kingsmount Financial Services Ltd., and his
staff, are part of a growing breed of farm financial consultants
assisting farmers.
by Alice Gibb
Ron Phillips, president and
founder of Kingsmount Financial
Services Ltd. of Arva and a
popular speaker at farm con-
ferences, looks more like a slightly
harried businessman than the pro-
verbial knight in shining armour.
But for many southwestern On-
tario farmers, Phillips has at least
partly fulfilled the knight's role by
coming up with "dignified" solu-
tions to their financial woes.
Phillips and his ever-expanding
staff are part of a growing breed,
farm financial consultants, who
are a visible sign that falling land
prices and poor commodity prices
are making life on the farm even
more challenging.
Ron Phillips is not, nor has ever
been, a farmer. In fact, for 17
years, he worked in banking, first
as a branch manager and then in
Toronto at the divisional office,
where he specialized in agricultural
credit. In 1978, he amicably left
the bank and studied for his mort-
gage broker's licence. He returned
to London and opened an office,
planning to arrange mortgages for
apartments, large residential
developments, and shopping cen-
tres. His timing couldn't have been
worse, for the recession tightened
and "there was just no work along
those lines whatsoever."
Ironically, the poor economy
meant work for Phillips. "I had a
number of farmers coming to me
asking me to assist them in getting
new mortgages on their farms.
They were trying to get mortgage
money to pay off banks'for current
debt or for equipment loans."
Philips, turned into an instant
farm consultant, soon discovered
it wasn't appropriate to treat these
situations the way a mortgage
broker would. "In most instances
it was not a mortgage we were talk-
ing about. It was more appropriate
to make arrangements with their
creditors."
6 THE RURAL VOICE
In 1981, Phillips, with the
assistance of a secretary, opened
his farm finance consulting
business in downtown London.
From the first he has depended en-
tirely on word-of-mouth advertis-
ing and referrals. In four years,
Kingsmount Financial Services has
handled over 800 files — some of
them more than once, Phillips
adds. Today, the consulting firm
employs 12 people, including a
lawyer with an agricultural
background and an acountant, and
is located in spacious quarters in
an Arva plaza. The fact that
business is booming, Phillips
ruefully admits, means that
"things just keep getting tougher"
in rural Ontario.
The Arva office also houses a
sister company, Kingsmount
Management Services Ltd. When a
lending institution, like a bank or
the Farm Credit Corporation
(FCC) wants a farm liquidation
supervised, the management firm
will act as receiver -manager.
Phillips emphasizes, however, that
"Kingsmount Management will
Kingsmount projects
the (farm) operation
over a 12 -month
period to determine
whether it is pro-
fitable or even can
be.
never act on behalf of a lending in-
stitution (as a receiver) without the
farmer's written consent." And
staff will advise farmers to get in-
dependent legal advice before sign-
ing any voluntary liquidation
papers.
When a client seeks assistance
from Kingsmount Financial Ser-
vices, the first step is a one-hour,
no -cost meeting with Phillips or
one of his staff. The hardest part
of the job, Phillips notes again and
again during the interview, is try-
ing to determine exactly what the
farmer's expectations are in seek-
ing outside advice. "Some simply
want you to do a deal like you did
for Joe Smith," says Phillips.
"Often that just isn't possible.
Every single situation is different,
and each requires an individual
solution."
After the client decides to pro-
ceed and has paid a retaining fee,
the next step is an on-farm visit so
that Phillips or his staff can pro-
duce a detailed analysis of the
client's farming operation. Then
the consultant requests the
farmer's written permission to
contact his lenders for copies of
their security documentation. That
lets the Kingsmount staff know
who ranks ahead of whom in the
event of a liquidation. Then, using
information provided by the
farmer, Kingsmount projects the
operation over a 12 -month period
to determine whether or not it is or
even can be profitable.
"There are farmers out there
that, in my opinion, should con-
sider getting out of farming,"
Phillips says. "But they are cling-
ing to a false hope that I believe is
put forth, well, I guess the best
way of putting it is the politicians
who make announcements saying
... that they're finally going to do
something. And I just don't
believe that it is possible that there
can be a general write-down of
debt. So I think that a farmer