國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
______________________________________________________________________________________
Se S er rv vi ic ce e S St tr ra a te t eg g y y
Principle of Elegance: Maximum strength with minimum materials.
~ Ren Zaphiropoulos
Current Portfolios and Services
Parsec currently offers stock portfolios with the appropriate risk for the HNWI markets including:
Growth, a portfolio designed for younger clients, or clients with a larger risk appetite and higher returns
Balanced, a portfolio designed for working professionals with a lower risk appetite
Growth and Income, a portfolio designed for older, retired individuals or those whom are risk adverse
Each of these is a well-diversified portfolio. The growth portfolio is 100% equities. The Growth and Income portfolio is 100% equities, but with an emphasis on higher dividend stocks. The Balanced portfolio includes 80% equity with 20% fixed income. For the Chinese market, these portfolios will be adjustable, but our competitive fee schedule will remain the same. These will have to be adjusted to fit the market as the QDII regulations only allow 50% of assets to be invested in equities. This means that our local Parsec International staff will have to adjust to these regulations and manage client’s assets without loosing our competitive edge. The other 50% of non-securities will be traded by our experienced bond trader, Vincent Chen.
The Growth Portfolio provides high risk, high return features that give customers who have a higher threshold for risk a very profitable return.
The Growth and Balance Portfolio provides moderate risk, moderate return features that provide diversification of risk for customers that are slightly more risk adverse.
The Growth an Income Portfolio is a comparatively lower risk product. For example: one of Growth and Income’s features is its ability to ensure investors that some of their return is certain. The Growth and Income Portfolio allows users to cost effectively and easily diversify their portfolio into safer investments without sacrificing potentially higher returns from equity investments. The G&I portfolio is ideal for older investors who need a certain return to support their nest egg or for those investors that are more risk adverse.
Compared our similar competitor portfolios, all of Parsec’s portfolios charge approximately half the investment fee as the competition. (our .9% compared to their 1.5% for equities)
The major benefits of all Parsec’s portfolios are constant analysis, financial savvy, proven
‧
statistical methods and in-depth research.
Around 70% of the funds managed by foreign fund managers are placed in the equity markets. But, because of the current global financial crisis, many Chinese are allocating their funds into more safe, fixed vehicles for their money. Despite this recent trend, the foreign equity market is expected to expand again in China as the crisis subsides. Parsec International is aware of changing preferences of Chinese investors and will adjust accordingly.
Customer Return on Investment
Bart Boyer founded Parsec with a vision of helping others become independently wealthy.
His sound investment philosophy is not solely based on “just making money”. Bart believes that if an individual saves and invests 10% of their gross income over a 30-year period, after that period they can be “independently wealthy”. This does not mean they are automatically rich. What this means is that this individual, after 30 years of saving and investing, can comfortably live off their investment earnings for the rest of their life.
They can retire and maintain the same standard of living as if they were working. When 10% of gross income invested is increased to 20%, a person can achieve independently wealthy status in only 20 years.
Historically, the best investment to accomplish this goal are equities. No other investments (including commodities, gold, bonds or fixed income products alone) accomplish the goals of the “independently wealthy” philosophy as well as US equities.
History proves this to be true (see inserts from Parsec Financial Brochure).
The beauty of this philosophy is that historically it is proven to work. It also keeps client on a well-defined track of exactly how much they should save while helping them attain a logically sound investment goal. In fact, such a well-defined goal encourages customers to keep investing money with Parsec. Once a customer has the knowledge of how to become independently wealthy, they are more committed to their financial goals and will be more likely to repeatedly invest 10% - 20% of their gross income with Parsec.
As a whole, this keeps customers satisfied, because they and Parsec are committed to the same goal. As customers deposit funds into their Schwab account, it assures a constant revenue stream of assets for Parsec to manage month after month, year after year. This is impressive when you realize that Parsec has maintained a whopping 2-3% attrition rate, even through the recent financial crisis. In the end, clients trust their money to Parsec Financial because Parsec is more that just an investor; we are partners in each client’s investment strategy.
Useful Features / Benefits
The unique benefit that Parsec offers its clients is its core belief in customer alignment.
Competitors earn commissions through selling or pushing financial products onto their clients, which may not be in the clients’ best interest. Not at Parsec.
Parsec’s normal attrition rate is 2-3% annually and remained the same during the financial crisis. Parsec typically gains about 8-10% of new clients for a net gain of 6%
‧
more clients each year. Over the last ten years the S & P 500 grew about 10% annually while Parsec grew at an impressive 14%. What is important to note here is how Parsec earns its management fees.
If Parsec makes smart investments and earns its clients money, Parsec enjoys the earnings too. Whenever client portfolios move upward, so do Parsec’s revenues and profits. This is how Parsec stays true to its customers and what makes it stand out against the rest of the financial industry that may push unnecessary products to gain a quick commission.
Portfolio Selection
The idea is to keep our customers forever, by continually offering them a valuable service, thereby diminishing our costs of appealing to new customers. Wise portfolio selection and positive customer interaction is therefore critical to Parsec International’s success.
When a customer comes to Parsec, we do not only focus on the amount of money they will give to Parsec to invest. Instead Parsec takes a 360-degree angle analysis on what are the best financial options for our clients. Sometimes clients are over-insured in life insurance, disability insurance, health insurance or are too heavily invested in fixed income products. To remedy these situations Parsec looks at each customer’s financial story as a whole and dedicates a least two-team members to create a unique solution for each client.
China is a different country than the States, and Parsec International acknowledges this difference. However, sound financial advice is the same. Treat each customer as an individual, help them decide what focus is best for them and how much is appropriate to invest. Make goals together and pave a way to meet those goals. The fundamentals of solid financial advice is the same in the US and in China.
Parsec International is willing to add new financial portfolios to our product line to meet new opportunities (and QDII regulations) in Xiamen, China.
It is our philosophy that a financial product, and our portfolios, must be consistently analyzed weekly in order to maintain our competitive position and market value. We must maintain our flexibility to adapt as the environment, market demand, our customers' needs and our capabilities change.
Each week the Parsec Investment Policy Committee meets and follows a bottom-up stock selection process focusing on several fundamentals including:
Current valuation relative to projected earnings growth.
Price/earnings ratio relative to the overall market and to the company’s own historical range.
Degree of financial leverage, avoiding heavily indebted companies.
Level and consistency of profit margins.
Joint Development Efforts
Parsec is considering joint development efforts with Lee Financial in Dallas, Texas. Lee Financial of Dallas, Texas is a perfect fit. Not only do they share Parsec’s investment,
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
fee-only investment philosophy, but they currently have USD $1.1 billion in assets under management. Lee management is excited about the new opportunities that lie ahead in the Chinese investment market and is prepared to join Parsec in this venture. Financial and technical responsibilities will be shared 50% and 50% between the two companies if an agreement is reached.
Talent Costs
Parsec International will open its doors with five employees in Xiamen. The financial advisors hired are each paid a salary of $25,000 USD a year and has an employee stock program that each employee can take part in. They will also be paid an ongoing rate of .05% bonus of any new business they attract and manage (i.e. AUM). In addition, Parsec International is committed to each employee and encourages continuation of education, especially as it pertains to the financial sector. Salaries and bonuses are expected to increase as the assets under management increase. Parsec will base salary increases, to non-owner employees every year, on both performance goals and newly acquired assets under management. Each hired employee will spend six months of training at Parsec Financial in the United States to learn first hand how a top-notch wealth management company is operated.
‧ 國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
______________________________________________________________________________________
M M a a r r k k e e t t i i n n g g P P l l a a n n & & S S t t r r a a t t e e g g y y
Marketing: Creating an environment where sales can occur.
~ Unknown
Strategy: The science of planning and directing large-scale operations, specifically of maneuvering forces into the most advantageous position prior to taking action.