How veteran portfolio manager has built a lasting practice

James Burton: [00:00:05]

Hello everyone, and welcome to this WP TV special. My name is James Burton, managing editor of Wealth Professional Canada. Today I'm delighted to welcome John Soutsos, Portfolio Manager at Med-Wealth Financial of IPC Securities Corporation. John, thanks for joining us.

John Soutsos: [00:00:22] Good morning, James. And it's my pleasure.

James Burton: [00:00:26] Now, John was recently named an excellence awardee of the WP awards in the Portfolio Discretionary Manager of the Year category, sponsored by Avenue Living Asset Management. So with that in mind, what better time to pick John's brains about how he's managed to deliver such a top class service to his clients. First up, John, I want to ask you, your portfolio strategy outperforms the S&P 500. So can you lift the lid a little on how you managed to achieve that?

John Soutsos: [00:00:55] Well, without releasing the secret sauce, essentially, there are three elements to my portfolio. First of all, it's a more concentrated portfolio than what investors are accustomed to it from, whether it be ETFs, or mutual funds or other private wealth management solutions. That's part of the strength of the model portfolio. The other aspect is we have our elements of growth stocks in there as well as defensive stocks and the portfolio is Connor is focused in the United States and for purposes of liquidity, and growth potential. So between those three, four, I should say four elements, because that's a geographic allocation playing a role as well. That is how the portfolio managed to outperform the index. Keeping in mind that was the exposure to the US there is the currency volatility, but it has been my experience over the course of time, whenever there's trouble in the market, money flows to the US dollar. And therefore, as a Canadian domiciled investment community, we benefit from that, and it provides additional protection for investors.

James Burton: [00:02:11] Thanks, Johnny, you alluded there to various model allocations, maybe we can dig a little deeper into how you use those to help your clients.

John Soutsos: [00:02:21] So there are a variety of model allocations now the core portfolio is 100% equities. And in fact, I designed it to be an all in one portfolio solution for seasoned portfolio solution. In fact, when we look at their risk metrics of the model portfolio, even though it's 100%, equities, and actually behaves more like a 70% stock 30% bond portfolio, that allocation would probably suit the vast majority of the investment out of the investment public. So we don't necessarily need to have different model choices. That being said, due to convention, I did create additional model selections. So for example, we do have our defensive model, we have a balance. And let's define the asset mix, a defensive model is 5050, half stocks, half bonds, be a balanced portfolio is 65% of stocks, 35% bonds, the growth model is 80 20. And of course, the core portfolio itself is 100% equity so we run a questionnaire to identify people's risk reward, trade off preferences, and then from that information along with a detailed interview or an understanding of the clients now it works at anytime we determine which model would be most suitable.

James Burton: [00:03:49] As you know better than me, John, communication is key for not just client relationships, but also client retention. So how do you stand out in that regard?

John Soutsos: [00:03:58] Well, given the fact that I've been in this business since 1986, I've learned a few things about communication. And the first and foremost being that you have to stay in constant contact with your clients. Now, my first client way back in 1986, was a woman who handed me a check after opening up an account and said, I'm leaving for Florida now for six months, make sure you take good care of us. And it was quite an intimidating experience and interaction. I was very young at the time and she was a very successful business woman was quite wealthy. So I since I didn't have any other clients, I basically wrote her a letter in, this is 1986. So we don't have emailing. And telephone calls are a little bit expensive. So I wrote her a letter on a typewriter and mailed it to her once a week at providing her with portfolio valuation updates. And by the time she got back to Toronto from Florida six months later, she was thoroughly impressed with my degree of communication And from her, I came to other major referrals that turned out to create a lineage of clients over the course of generations. So communications have been achieved with me from the very outset. So on the lines of communicate along the lines of communication. Currently, what I do is I write a weekly newsletter. So the newsletter is a recap of what's been happening in the markets over the preceding week, as well as some insights as to what I believe how things will be unfolding in the in the near future, obviously, while we can predict the future, but we can project trends and into the near future. So there's some of that in in the newsletter, I also provide my personal opinions on what's going on in terms of media's new off the markets and other matters. In addition to that I meet with my clients on a quarterly basis, or semi annual basis, depending on the person's preferences. Oftentimes, these meetings are not at the office, actually, most of the time, they're not at the office. Typically we'll meet with people at a restaurant, or at my golf club, where we will share a meal, or just during the summer time, as we're doing today, we're going to be having around the Golf with one of our clients. So that's the type of communication we have on an ongoing basis on a personal level. In addition to that, I host several dinner presentations, typically between four and six dinner presentations throughout the year. And I invite both clients and prospective clients to these presentations in order to both grow our business and submit the concepts of the portfolio in the minds of our existing clientele, and so they can better understand what we're doing, and that goes a long way to helping people existing clients understand and also introducing the model portfolio to prospective clients.

James Burton: [00:06:55] I can't help noticing John three miniature busts positioned either side of you. Please tell me more about the significance of these?

John Soutsos: [00:07:05] Well, two of the busts are of ancient Greek philosophers, Aristotle and Homer. And the third one is Sir Winston Churchill. I'm someone who's an avid fan of history, and my heritage is Greek. I was born in Greece. And I love to learn and one thing I also enjoy doing and I introduce all my newsletters was a quote from accomplished individuals or people who have displayed overlap spoken philosophically, throughout history. So I Sir Winston Churchill is one of those individuals and he has been quoted are very useful in today's world. But certainly the respective of the ancients from from Greece are also very useful. I think one of the qualities that I bring to the relationships I have with my clients is perspective. Today, we are inundated with information and it is very difficult for people to sort out information. So I like to place things into perspective and nothing places things into perspective, like a good quote from someone in history, and also sometimes someone who's currently living

James Burton: [00:08:20] from typewriter to emailed newsletters. It’s great story, John. Now, succession planning is critical for clients peace of mind, how does your family dynamic work with regards to the business?

John Soutsos: [00:08:32] For the longest time a succession plan was non existent? First of all, I love what I do. It is my business. And that doesn't involve digging ditches. So physically, it's not taxing. And I can do this for I look at models like Warren Buffett and Charlie Munger who are in their 90s. And now, Charlie, I think he’s turning a 100 this year. And I think, well, If they can get to that stage, why can't I But that being said, I understand that clients and prospective clients have concerns about succession planning. And so our firm and IPC securities does have the capacity to take on accounts, following the retirement of an advisor or in my case, a portfolio manager and continue on with them through a head officer arrangement that being said that is not optimal. And so after being in the business world for about eight years, and so on, my eldest son Alexander Soutsos has joined my practice and he's currently working with me very intensely to learn about portfolio man renting although that being said, He's already a level one CFA charter holder no not a charter holder but he’s completing level one of the CFA Program. So he's working with me to learn about portfolio management. But he's also working with me, too, in meeting all of my clients and prospecting to get new clients. So Alexander has been working with me for the last year in order to get to know my clientele, and to develop his own clientele and to learn the ropes each other's portfolio management. He's also very analytical by his nature, he worked at KPMG for a couple of years as a senior consultant, and as an analyst with CI investments. So he does provide analytical services as well for prospective clients trying to break down their portfolio and allowing me to give a recommendation.

James Burton: [00:10:41] Thanks, John. And finally, the more immediate future, what's next for your practice? What goals have you set for the year ahead?

John Soutsos: [00:10:49] Well, it's we're very excited. We're launching a podcast my son and I, it's called prescribing prosperity. And it will be launching sometime in the next month. And we'll be bringing on guests from various fields of interest, it will not be exclusively about financial matters, although we will introduce the podcast and exit the podcast every week with some financial information. But the meat of the podcast is going to focus on other areas, our experiences, travel, dining lines, etc, etc. So lifestyle interests, we're very excited about it. We have some guests lined up. And our goal is to expand our exposure to the marketplace. Using this podcast, we will continue with the dinner presentations as well. And the objective, the objective is to increase our business by at least 20% Over the coming 12 months. We also have an ambition to potentially launch a fund. Right now our services in the private wealth management area. So clients have direct ownership of the underlying securities. Oh, we're also interested in lending, launching a fund version that will open up a portfolio on to investors on a broader scale.

James Burton: [00:12:10] Thanks so much, John, for your time and insights.

John Soutsos: [00:12:13] James, thank you very much.

James Burton: [00:12:15] And if you want more information on John and his team, please go to johnsoutsos.com And don't forget to go to wealth professional.ca For all the latest news and views on the industry. Join us next time on WP TV.