When Simpson first started Synchronicity, he would touch on investment management, but most of his efforts were directed at helping advisors build strong practices. However, over the last three to four years, with the growing transition in the advisory business from non discretionary to discretionary services, the investment management part of his service has become increasingly important.

Simpson comes from a successful investment background. Over an eightyear career with Nesbitt Thomson Inc., he built a $120M book and was one of the top dozen advisors (ranked by production) in Canada. (To put that in perspective, at the time the average advisor in Canada managed less than $5M in client assets.) With his experience, he knew he could add real value to advisors’ investment management capabilities.

Initially, he worked with a single-factor technical analysis research tool to develop his investment strategies, but that had a limited, one-dimensional approach.

“I looked for a more functionality-rich program for more than a year,” he ecalls. “After an exhaustive search over the Internet, I found YCharts. I signed up for a trial, did a demo, instantly recognized its huge capabilities, and became a subscriber.”

YCharts is now the engine powering Simpson’s business. “It allowed me to transition to a multi-factor fundamental and technical approach, which provides far superior results for advisors from both a performance and business development standpoint.”

For Simpson, successful investment management is more about elimination than selection. For example, an investor who bought the S&P 500 in 2000 would have been under water until two years ago, and suffered a rollercoaster of 54% losses in one period and 45% in another. Instead, he contends that investors want a smoother ride, one that provides a decent return with a reasonable level of risk.

“By eliminating mistakes, your overall performance will be more sustainable and predictable. With YCharts you can conduct fundamental analysis to avoid those stocks with problematic fundamentals, and then apply technical indicators to filter out stocks based on price movement. The result is a rules-based program that manages risk first, to minimize those drawdowns in the bad years, and generate positive returns in the good years to potentially outperform the indices.”

At Synchronicity, Simpson uses YCharts’ powerful screening tools -sophisticated filters driven by thousands of metrics—to develop a “fundamental sandbox” that identifies stocks with strong and predictable earnings growth, a decent return on equity, that are not overexposed to debt, and so on. He then applies a trend analysis to see if the trend is positive, followed by a momentum analysis to identify the strongest and weakest stocks in the short term. He eliminates stocks that are trending lower, those with too much risk, and those that are more or less flat.

“At the end, we’ve narrowed down to a small number of securities that have a high probability of doubling over the next five years. By only owning those stocks, we create far stronger portfolios than by playing a game of selection.”