The idea behind the Bucket System is to use market gains to fund a client’s retirement paycheck. The client has peace of mind going into retirement, knowing that three years of their income is NOT reliant on the equity markets. Here’s how it works.

After George and Scott have completed a thorough financial plan for their clients they know what the retirement income needs are, and when the funds are needed. Let’s say the clients, Mr. and Mrs. Smith, have determined they require $60K/year (over and above government funds CPP etc.). The idea is to create three years of retirement income which is set aside from the portion of their portfolio that will continue to grow.

Why three years? The average market cycle for a downturn is about three years. By setting these income needs aside, the Smiths know that once they start drawing on their $60K, they won't be drawing from investments that are still growing - George and Scott call the non-retirement buckets the Magic Bucket. Based on the foregoing, the Smiths would require $180K (three years of $60K per year).

“One of our core beliefs is this, if we can’t explain it on the back of a napkin, it’s overly complicated and inefficient. Clients appreciate this and George and I have unbelievable client retention. In fact, we still have our first clients - 20 years later!” Scott adds.

Whenever possible, both partners participate in all ‘discovery’ meetings. Open-ended questions help George and Scott identify, among other things, what money means to their potential client, the client’s belief systems around money, and any expectations. The partners’ discovery process is so detailed and specific that it even defines how often the client wants to be contacted. “Everything we do is focused on what the client expects to see 6 months down the road, 1 year, 2 years, 3 years etc.,” George adds

After the meeting, a Memorandum of Understanding is prepared. There may be some follow up meetings to determine if anything was missed. Once the prospect has agreed to become a client, a Memorandum of Commitment is prepared.

As a final word, Scott says, “Our clients know we’ve uncovered their wants and needs and have customized a program that will allow them to retire stress free.”