Peter Watson Investments - 5 Step Process

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Five Step Wealth Management Consulting Process

We take the time to get to know you and your needs. The foundation of our client relationship process is the Five Step Wealth Management Consulting Process, a systematic consulting process for uncovering your most important goals and for designing and implementing appropriate solutions. We believe this process will help us gain a better understanding of your goals and establish our long-term relationship. As your Personal Wealth Manager, we help you make smart decisions about your money.

Discovery meeting:

We examine your current situation, the goals you would like to achieve and the values that are most important to you.

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Investment Policy Statement Meeting:

We summarize your goals and objectives and make recommendations concerning your asset allocation between various classes of investments. We provide a written Investment Policy Statement that forms the basis of our investment recommendations.

In the Investment Policy Statement, we design a S.M.A.R.T. Portfolio, which is focused on short and long-term financial goals.

Based on the Five Step Wealth Management Consulting Process, your S.M.A.R.T. Portfolio addresses:

Suitability: We invest a great deal of time to understand your needs and goals so your portfolio is right for you.
Managed Risk: While risk and investing go hand in hand, some elements of risk can be eliminated or reduced. Our approach to portfolio construction seeks to minimize risk, given your investment objectives and your tolerance for risk.
Asset Class Diversification: We utilize different asset classes to carefully construct your portfolio in order to maximize returns for a given level of risk. Your portfolio is diversified by many factors including geography (Canada, United States and International) and asset class (equities, fixed income and short term investments).
Reduced Tax: What ultimately matters to you is your after-tax return. Your portfolio is designed to minimize and defer taxes, thereby increasing the after-tax value of your portfolio.
Transparent Fees: We clearly disclose our fees separately and summarize them for year-end tax reporting. Our fees may be tax deductible on non-registered accounts.

A note about passive investing Empirical research has confirmed that the vast majority of skilled professionals do not beat the market over long periods of time. For those few winners, it is impossible to identify them in advance. Research also shows that there is little correlation between investment managers' earlier successes and their ability to produce above-market returns in subsequent periods.

This is why we are passive investors.

Passive investing assures that a portfolio's performance will be no worse, or better, than the market as a whole. Passive investors have historically enjoyed stronger returns than active investors over the long term.

We believe that many investors would do well to avoid active investing and focus on portfolio diversification instead. Research has indicated that, on average, 94% of the variability in your portfolio's return over the long term can be attributed to asset allocation, with only 6% attributed to market timing and security selection. We would be pleased to describe how this can benefit your investment portfolio.

Mutual Commitment Meeting:

We arrive at a mutual decision on whether our firm can provide substantial value to you and whether we should proceed. Should we choose to work together, we commit to each other to work toward achieving everything that is important to you and your family. We also execute the documents necessary to put the recommendations in your Investment Policy Statement into motion.

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Financial Priorities Meeting:

We identify and prioritize your important financial issues. For example, a priority may be financial independence projections, tax planning, estate planning or an insurance analysis. The financial issues identified will be addressed in future Regular Progress Meetings.

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Regular Progress Meetings: An Ongoing Process

These meetings provide us an opportunity to review major changes in your personal or financial situation since our last meeting. We also review your overall progress toward your long-term financial goals and make changes to your investment plan as required.

As your Personal Wealth Manager, we also implement appropriate wealth management solutions during these meetings. We present our Wealth Management Plan at our first Regular Progress Meeting so that we can prioritize key areas and begin to address them systematically.

As necessary, we will have our network of external professionals work with your existing professional team on specific financial issues.

The Wealth Management Plan involves:

Wealth Creation and Preservation: Our goal is to produce the best possible investment returns consistent with your level of risk tolerance.
Tax Management: We construct a portfolio with emphasis on tax strategies designed to minimize the tax impact on your investments.
Risk Management: We analyze your insurance needs in the areas of life, disability, critical illness and long-term care insurance.
Wealth Transfer: We find the most tax-efficient way to pass assets to succeeding generations, and to do so in a way that meets your wishes.

In accordance with your stated priorities, we raise these issues and make our recommendations to you during our Regular Progress Meetings. Over time, this allows us to implement a complete wealth management solution with you.

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