BCS Consulting Financial Services

INVESTMENT ADVICE
I am a Registered Investment Advisor offering brokerage and consulting services in the allocation and investment of your money. My primary focus is Capital Preservation and Growth. In the pursuit of this objective I use an Affinity Wealth Management System, Fixed Annuities, including Equity Indexed Annuities and a constantly changing portfolio of stocks, bonds and no load mutual funds. My overall performance has generally exceeded that of the major US market indexes. A sample portfolio and performance figures are available upon request.

I act as an agent, a solicitor and a consultant. I do not ever charge a fee for these services. All my compensation is paid by the insurance companies, investment managers and financial planning services and all my investment advice is free. I am "commission blind" when it comes to these investments. I recommend the things that I personally invest in, or would invest in myself and always put my client's needs at the heart of all my recommendations.

Even if you like to manage your own investments and just want greater protection against the losses suffered in the last bear market or more recently in the market correction of 2008, I will help you develop and implement a plan to achieve the goal of Capital Preservation and Growth for and provide you with regular updates on the investment choices I am making and the results I am achieving.

AFFINITY MANAGEMENT SYSTEM (AWM)
I am a solicitor and a client of Affinity Wealth Management Systems. They are uniquely suited to help help you achieve your investment objectives. This is an effective approach to investing that was informed and refined by the experience of the severe market losses in 2000 - 2002. AWM designs a model portfolio to suit each client's investment objectives. AWM then invests using i-shares and low or no load mutual funds to provide both the protection of diversification and low transaction cost. They make quarterly changes designed to follow the momentum in their chosen markets in an attempt to maximize client returns. If the market shifts to bearish, the quarterly adjustments strategically reallocates funds from equity shares to bond shares.

This system would have generated positive returns in the worst years of the most recent bear market and has the potential of doing so in the future (although past performance is no guarantee of future results). One beauty of this system is the potential freedom from holding significant assets in fixed income vehicles for safety and reduced risk at times when investment in the equity markets would be more lucrative. And, in addition, clients also benefit from having the piece of mind of knowing that a reallocation to fixed income shares will occur as necessary on a quarterly basis when the market conditions warrant. You don't have to call your broker or sell your stock or rely on your broker to do the right thing! It is part of an investment strategy that is designed to reduce your risk. It will happen systematically.

Reducing Risk
One of the main goals in their investment strategy is to manage a client's risk according to their investment objectives and financial situation. AWM accomplishs this by using a statistically based, disciplined, proprietary asset allocation model that is focused on improving performance while reducing overall risk.

Improving Performance

AWM client's portfolios are rebalanced quarterly, adjusting to changing market segment trends and momentum. They use cost effective, tax efficient 'New School' investment vehicles called Exchange Traded Funds (i-shares) and a few select mutual funds to allocate clients portfolios. This illustration shows how, over four quarters, they weighted client's portfolios more in Small Cap Growth than Large Cap Value because of stronger performance in the Small Cap Growth segment of the market. They perform their calculations using six major market segments each quarter. A basic assumption in the model is that previous quarters performance is a good indicator for the next quarter.

Bull & Bear Market Program
Their Bull & Bear Market Program monitors overall market trends and initiates adjustments out of equities and into bonds to help preserve bull market gains when a declining market trend is detected.

As a solicitor for Affinity Management and as a client, I can help you identify the most appropriate allocation of your resources to include an Affinity portfolio designed to meet your particular investment needs and objectives. There is no extra charge made to your portfolio for my service.

EQUITY INDEXED ANNUITIES
A fixed annuity is a savings instrument usually offered to an investor by a bank or insurance company. The annuity pays a certain income based on the amount of money invested, the investor's age and the desired time over which the payments are to be made at the time the payments start. Income from these policies can be guarenteed for a lifetime. Since these investments are NOT insured by the US government, the most important element of product choice is the quality of the issuer. The next most important things to consider are the crediting methods and the penalties for early withdrawal.

There are three types of fixed annuities. They are deferred, immediate and equity indexed annuities. Equity Indexed Annuities usually have the following characteristics:

• Guaranteed Minimum Interest Rate
• Deferral of Income tax until withdrawals or pay out
• Earnings linked to a stock market index
• Premiums protected against market index risk
• Taxed-deferred Gains from market index participation and automatic reinvestment until withdrawal or income pay out

The table below shows you the Index Benefit Credits that would have been made using a monthly average crediting method, 100% participation rate and a 10% annual cap. If I had invested entirely in this particular Equity Indexed Annuity in 1999, I would NOT have suffered any market related losses from the bear market of 2000 - 2002 because my principal investment would have been preserved.

Generally speaking, Equity Indexed Annuities with monthly point to point crediting start each contract year "fresh" with your accumulated value as an initial equity capital figure. Each month the issuer calculates the actual changes in the Index Value, both positive and negative. Annually the sum of the Index Values is calculated. And, if the total value is a negative, NO adjustment is made to your initial Capital figure at the beginning of the next contract year. Consequently, in the example above, this company made a 0% adjustment in the years 2000 thru 2002. 0% is a lot better than a loss of 25% to 50% that most of us suffered.

As you know, when you have losses, you have to make more than twice what you lost to get back to where you planned to be in the first place. So if you planned on a 10% return and you loose 50%, you have to make 120% of what is left in your portfolio to get back to where you planned to be. Because this is very difficult, if not impossible to do in the short term, it is far better not to loose the money in the first place.

You notice that both in 1998 and 2003 above the annuity would credit only 10%. In these years the markets may have done better than 10%, but the maximum return of this annuity was capped at 10%. Annuities are not for everyone, but if you are tired of loosing money in the market and you still want to participate in the growth when the market is going up, an annuity may provide just the right answer.

1. Source: finance.yahoo.com, 3/2005.
2. Allianz Life, Success with Equity Indexed annuities, 5/2005.

Disclosures:

• Performance data quoted represents past performance; past performance does not guarantee future results.
• Equity Indexed Portfolio performance table shows you hypothetical yearly Index Benefit credits to accumulation or annuitized value that a policy holder would recive with a product using a monthly average crediting method, 100% participation rate and a 10% annual cap on the average equity market performance of a major market index throughout the periods indicated.