The Client Experience
Step 1
Getting to Know Each Other— In your first interaction, we will spend some time getting to know each other to ensure there’s a good fit on behalf of both parties. Marco then takes a detailed inventory of where you stand financially right now and discuss your future goals. He then helps you prioritize your goals and determines what it will take to achieve them.
Step 2
Present a Tailored Plan— With that information, Marco develops a strategy for you and presents a personalized Financial Plan and Investment Proposal. He lays out all your investment options including your fee schedule. You’re then free to decide whether you’d like to proceed. Don’t worry, he doesn't pursue any high pressure sales tactics. He's in the business of building long term relationships; not flipping used cars.
Step 3
Implement & Monitor— Once you decide to proceed, Marco takes care of everything; including opening new accounts and transferring your existing accounts. This means no awkward conversations with your bank or current advisor. From this point forward, he monitors your investments and meets regularly to discuss your progress. This allows time to re-calibrate your plan and re-balance your investments to ensure you stay on track.
Step 4
Provide Ongoing Counsel— You can call/email Marco anytime you have a financial question or issue. He acts as your counsel for any financial decisions you’re faced with. Services cover a wide range of areas and he has a deep pool of trusted professionals that can be made available upon request.
Prudent. Rigorous. Disciplined.
Marco brings an institutional approach to his practice. This means a more thoughtful and rigorous process than is typical in the retail investment industry.
His process has been created and refined through 25+ years of experience in the industry working and advising clients with varying objectives and needs. Furthermore, he has attained the Chartered Financial Analyst designation; a globally recognized designation that is the gold standard in the investment business.
His investment approach combines a thoughtful philosophy with a rigorous and disciplined process. His investment philosophy is how he thinks about investing while his investment process is how he executes that philosophy.
Investment Philosophy
Marco's investment philosophy is based on the following core principles:
Protecting Your Capital
He makes protecting your investments his primary concern when investing. He applies a disciplined investment process to construct portfolios that will meet your return objectives while limiting the amount of risk you’re taking.
Buying at the Right Price
One way we mitigate risk is by ensuring he buys attractive assets at reasonable prices. This provides a margin of safety for your investments. There are many companies and products that appear to be of a very high quality but simply cost too much. He is a patient investor who will wait to buy investments at an attractive price.
Getting the Big Calls Right
It is often said that life comes down to a few moments. The same can be said for investing. There are moments in history when large macroeconomic events (e.g. the financial crisis) have a dramatic impact on all asset prices. Narrowly focusing on the quality and price of an investment while ignoring the bigger macroeconomic environment can lead to disastrous results.
Ignoring the Benchmark
It is common in the industry for portfolios to be constructed in such a way that closely mirrors the benchmark index. This way, the client’s portfolio never looks much better or worse than the benchmark they are comparing their returns against. This reduces the odds of the advisor ever getting fired for poor performance. And it typically results in clients receiving sub-par returns. Marco ignores benchmarks and constructs tailored portfolios that best helps his clients meet their goals.
Fighting Human Nature: Remaining Patient
An investor’s worst enemy is often himself. The relatively new field of behavioral finance has clearly demonstrated how human emotions lead many investors to sell at the bottom of the market (fear) when assets are trading cheaply and buy during market peaks (greed) when assets are expensive. He doesn't invest his clients’ assets on a whim or what feels right. He removes emotion from the equation by sticking to his rigorous investment process at all times.
Investment Process
Marco crafts customized portfolios with his clients. He makes use of both managed products (e.g. mutual funds, ETFs, closed end funds, etc) and individual securities (e.g. stocks, bonds, GICs, etc) depending on the particular situation of each client. As such, he has two distinct research processes: one for funds and the other for stocks.
Fund Selection Process
His fund selection process utilizes a five pillar approach. These five pillars include:
Here, he spends time getting to know the people running the fund and the team supporting them. He likes to see they have an impressive pedigree (academic credentials, past experience, and track record). He also wants to ensure they receive the appropriate resources; including support staff, computer systems, and access to data/research. It’s also very important to ensure the managers are investing in any fund he's considering selecting for his clients. Co-investment ensures a proper alignment of interests between the fund manager/company and his clients.
As Morningstar’s Don Phillips says about funds without any co-investment, “after all, no one washes a rental car.” – Source: Globe and Mail, Oct. 25th, 2015.
Most people and even most professionals pick funds solely by looking at past performance. In practice, this area is often the least fruitful for identifying which funds will outperform in the future. Marco still conducts thorough performance analysis with two distinctions. First, he focuses on long term results (at least five years) rather than chasing short term performance. Secondly, he doesn't just look at the level of the fund’s returns but at how the fund performed during various market environments to assess whether it is consistent with what he would expect given the firm’s stated investment approach. This can be valuable in determining whether a manager is consistently applying his or her process over time.
A robust and consistently applied investment process is one of the most important drivers of long term investment success. It’s the reason why Marco is so transparent about his own investment process. So he spends a lot of time speaking to fund managers and getting to know their processes. This allows him to better anticipate how the fund should behave in various market environments and helps him identify winning funds.
Successful investing requires the fortitude to stick with your approach even when it is out of favour. Much like when you’re sitting still in traffic and watching the lane next to you moving, by the time you make the switch, it’s often too late and you’re further behind than if you’d just stuck to your lane.
There is no better single predictor of future performance than price. The more you pay for a fund, the less return you receive. Marco strives to find the cheapest possible offerings without compromising on quality. This means he doesn't practice any religion when it comes to active or passive investment management. Quite simply, he selects what he believes is the best investment in its class whether that’s an actively managed fund or passively managed fund. Also, he flatly rejects performance fees. Ostensibly their purpose is to align the interests of the fund manager with those of the investors. However, performance fees are often complicated, lack transparency, and serve only to benefit the fund company. Before ever considering investing in a fund with a performance fee he would have to conduct extensive due diligence to ensure it isn’t disadvantaging his clients.
Marco partners with firms that share his belief that the investor comes first. And while every firm will tell you they do in many cases their actions speak differently. This is because many firms are more interested in salesmanship and short term profitability than stewardship. The firms he partners with realize that their long term success is dependent on providing a great investor experience. He puts a lot of time and effort into assessing a firm’s stewardship and where their priorities lie. This will often include site visits to meet the leadership of these firms so he can assess where their priorities lie. Morningstar has produced interesting research that demonstrates that firms that practice good stewardship also produce better investment performance.
Stock Selection Process
His stock selection process is fundamentally driven and selected on a bottom up basis. He aims for clients to own a concentrated portfolio of quality businesses trading at reasonable prices that complement his client's existing portfolio. This allows him to fill in any gaps in their portfolio to reduce their overall portfolio risk. It also allows him to utilize tax strategies that would not otherwise be available through fund investments alone.
He begins with a quantitative screening process to narrow the eligible universe of investments. He focuses on high quality businesses that have strong balance sheets, a sustainable competitive advantage, an ability to consistently generate high returns on equity (ROE), and are trading at an attractive price.
Once he narrows the list, further research is done on any candidates operating in industries or countries where he would like to gain additional exposure for his clients. He digs behind the published data to understand the business, its opportunities for continued growth, any risks that lay ahead, and the upside/downside potential associated with it.
