<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION
                                    FORM 20-F


[ ]      REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE
         SECURITIES EXCHANGE ACT OF 1934

                                       OR

[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 - FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004

                                       OR

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 - For the transition period from _____________ to
         _____________

                        Commission file number: 011-16245

                            W.P. STEWART & CO., LTD.

             (Exact name of Registrant as specified in its charter)

                                     BERMUDA

                 (Jurisdiction of incorporation or organization)

                                  Trinity Hall
                                 43 Cedar Avenue
                                P.O. Box HM 2905
                                 Hamilton, HM LX
                                     Bermuda

                    (Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12 (b) of the Act:

                                                     Name of each exchange
               Title of Each Class                    on which registered
------------------------------------------      -------------------------------

Common Shares, par value $0.001 per share           New York Stock Exchange

Securities registered or to be registered pursuant to Section 12 (g) of the Act:

                                      None

Securities for which there is a reporting obligation pursuant to Section 15 (d)
of the Act:

                                      None

Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the Annual
Report:

As of December 31, 2004, 46,113,462 common shares, par value $0.001 per share,
were issued and outstanding.

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark which financial statement item the registrant has elected
to follow. Item 17 [X] Item 18 [ ]


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                                TABLE OF CONTENTS

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<CAPTION>
                                                                                                               PAGE

PART I............................................................................................................1

<S>              <C>                                                                                             <C>
   ITEM 1.       IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS............................................1

   ITEM 2.       OFFER STATISTICS AND EXPECTED TIMETABLE..........................................................1

   ITEM 3.       KEY INFORMATION..................................................................................2

   ITEM 4.       INFORMATION ON THE COMPANY.......................................................................8

   ITEM 5.       OPERATING AND FINANCIAL REVIEW AND PROSPECTS....................................................28

   ITEM 6.       DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES......................................................35

   ITEM 7.       MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS...............................................43

   ITEM 8.       FINANCIAL INFORMATION...........................................................................45

   ITEM 9.       THE OFFER AND LISTING...........................................................................46

   ITEM 10.      ADDITIONAL INFORMATION..........................................................................47

   ITEM 11.      QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK......................................57

   ITEM 12.      DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES..........................................58

PART II..........................................................................................................58

   ITEM 13.      DEFAULT, DIVIDEND ARREARAGES AND DELINQUENCIES..................................................58

   ITEM 14.      MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS....................58

   ITEM 15.      CONTROLS AND PROCEDURES.........................................................................58

   ITEM 16A.      AUDIT COMMITTEE FINANCIAL EXPERT...............................................................59

   ITEM 16B.      CODE OF ETHICS.................................................................................59

   ITEM 16C.      PRINCIPAL ACCOUNTANT FEES AND SERVICES.........................................................59

   ITEM 16D.      EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.....................................60

   ITEM 16E.      PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.........................60

PART III.........................................................................................................61

   ITEM 17.      FINANCIAL STATEMENTS............................................................................61

   ITEM 18.      FINANCIAL STATEMENTS............................................................................61

   ITEM 19.      EXHIBITS........................................................................................61
</TABLE>



<PAGE>



         FORWARD-LOOKING STATEMENTS

         Certain statements in this Annual Report are forward-looking
statements, including, without limitation, statements concerning our
assumptions, expectations, beliefs, intentions, plans or strategies regarding
the future. Such forward-looking statements are based on beliefs of our
management as well as on estimates and assumptions made by, and information
currently available to, our management. Such forward-looking statements involve
known and unknown risks, uncertainties and other factors that may cause our
actual results, performance or achievements, or industry results, to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors include,
among others, the risk factors set forth in this Annual Report as well as the
following:

         o        general economic and business conditions;

         o        industry capacity and trends;

         o        competition;

         o        the loss of major clients;

         o        changes in demand for our services;

         o        changes in, or inability to implement, business strategy or
                  development plans;

         o        changes in the laws and/or regulatory circumstances in
                  Bermuda, the United States, the United Kingdom, Ireland, The
                  Netherlands or other jurisdictions;

         o        changes in contingent liabilities;

         o        quality of management;

         o        actions taken or omitted to be taken by third parties,
                  including our shareholders, clients, competitors, legislative,
                  regulatory, judicial and governmental authorities; and

         o        availability, terms and deployment of capital.

         Should one or more of these risks or uncertainties materialize, or
should the underlying assumptions prove incorrect, actual results may vary
significantly from those anticipated, believed, estimated, expected, intended or
planned. We do not intend to review or revise any particular forward-looking
statements made in this Annual Report in light of future events. You are
cautioned not to put undue reliance on any forward-looking statements.

                                     PART I.

ITEM 1.  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

         Not Applicable.

ITEM 2.  OFFER STATISTICS AND EXPECTED TIMETABLE

         Not Applicable.


<PAGE>

ITEM 3.  KEY INFORMATION

         A.  SELECTED FINANCIAL AND UNAUDITED OTHER DATA

         The following table sets forth selected financial and unaudited other
data for the Stewart Group, which includes W.P. Stewart & Co., Ltd. and its
subsidiaries, for the periods and as of the dates indicated. The data set forth
below are presented on a consolidated basis.

         The income statement and balance sheet data set forth below as of and
for the years ended December 31, 2004, 2003, 2002, 2001 and 2000 are derived
from our audited financial statements. You should read the financial data set
forth below in conjunction with "Operating and Financial Review and Prospects"
and the consolidated audited financial statements for the years ended December
31, 2004, 2003 and 2002 and related notes of the Stewart Group included
elsewhere in this Annual Report. The audited financial statements were prepared
and presented in accordance with accounting principles generally accepted in the
United States of America, or U.S. GAAP, as they are commonly known.

<TABLE>
<CAPTION>

                                                                       AS OF, AND FOR THE YEAR ENDED, DECEMBER 31,
                                                      -------------------------------------------------------------------------
                                                           2004           2003            2002           2001          2000
                                                      -----------    ------------    -----------    ------------    -----------
INCOME STATEMENT DATA:                                                 (IN THOUSANDS, EXCEPT PER SHARE DATA)
Revenues:
<S>                                                    <C>            <C>             <C>            <C>            <C>
   Fees.............................................   $ 116,005      $  94,062       $ 105,419      $ 115,993      $  149,351
   Commissions......................................      34,820         22,461          28,293         39,695          48,273
   Interest and Other...............................       1,496          2,279           3,570          5,028           5,680
                                                      ----------     ----------      ----------     ----------      ----------
                                                         152,321        118,802         137,282        160,716         203,304
                                                      ----------     ----------      ----------     ----------      ----------
Expenses:
   Employee Compensation and Benefits...............      29,102         22,942          26,337         28,246          38,546
   Fees Paid Out....................................       7,760          6,059           7,250          5,157          11,639
   Commissions, Clearance and Trading...............       7,371          4,811           5,919          7,376           8,353
   Research and Administration......................      14,781         14,429          14,358         13,516          14,523
   Marketing........................................       5,618           4,709          5,166          1,901           2,923
   Depreciation and Amortization....................       8,039          7,933           8,049          7,527           7,538
   Other Operating..................................       8,649          8,861           8,371          9,543           9,607
                                                      ----------     ----------      ----------     ----------      ----------
                                                          81,320         69,744          75,450         73,266          93,129
                                                      ----------     ----------      ----------     ----------      ----------
Income Before Taxes.................................      71,001         49,058          61,832         87,450         110,175
Provision for Taxes.................................       7,852          5,983           6,381          7,153          11,029
                                                      ----------     ----------      ----------     ----------      ----------
Net Income..........................................   $  63,149      $  43,075       $  55,451      $  80,297      $   99,146
                                                       =========      =========       =========      =========      ==========
Earnings Per Share:(1)
   Basic Earnings Per Share.........................   $    1.40      $    0.97       $    1.27      $    1.85      $     2.37
                                                       =========      =========       =========      =========      ==========
   Diluted Earnings Per Share.......................   $    1.39      $    0.95       $    1.21      $    1.71      $     2.18
                                                       =========      =========       =========      =========      ==========
WEIGHTED AVERAGE SHARES USED IN COMPUTATION:
   Basic............................................      45,112         44,312          43,576         43,425          41,873
   Diluted..........................................      45,524         45,198          46,013         46,943          45,524
BALANCE SHEET DATA:
Total Assets........................................   $ 167,710      $ 141,008       $ 134,979      $ 143,278      $  114,262
Total Liabilities...................................   $  33,281      $  26,339       $  26,914      $  29,238      $   31,430
Shareholders' Equity................................   $ 131,429      $ 114,669       $ 108,065      $ 114,040      $   82,832

OTHER DATA (unaudited):                                                 (IN MILLIONS, EXCEPT PER SHARE DATA)
Long-Term Debt................................         $    15.4      $    16.2       $    16.9      $    17.5      $     18.1
Cash Dividends Per Share......................         $    1.20      $    1.20       $    1.20      $    1.20      $     1.73
Assets Under Management.......................         $   9,348      $   8,561       $   7,655      $   9,171      $   10,324
</TABLE>

--------------------------
(1)      Common shares purchased by our employees, restricted shares issued to
         our employees and options granted to our employees are subject to
         vesting. For treatment of unvested common shares, unvested options and
         vested unexercised options, see Note 4 of the notes to the consolidated
         financial statements contained herein.


                                       2
<PAGE>

         B.  CAPITALIZATION AND INDEBTEDNESS

         Not Applicable

         C.  REASONS FOR THE OFFER AND USE OF PROCEEDS

         Not Applicable

         D.  RISK FACTORS

         VOLATILITY IN THE SECURITIES MARKETS COULD RESULT IN A DECREASE IN THE
         MARKET VALUE OF OUR ASSETS UNDER MANAGEMENT WHICH, IN TURN, WOULD
         RESULT IN A DECREASE IN OUR EARNINGS.

         The securities markets are highly volatile, and securities prices may
increase or decrease for many reasons, including economic, financial or
political events, which we cannot control. These events could result in a
decrease in the overall value or amount of assets that we manage and on which we
earn our fees.

         We earn most of our revenues from asset management contracts with
clients. Under these contracts, clients pay us an asset management fee equal to
a percentage of the market value of the assets we manage. As a result, if
securities prices fluctuate, the market value of the assets may fluctuate, and
our revenues and profitability may fluctuate as well. All other factors being
equal, if securities prices fall, the value of our clients' portfolios, and our
revenues, would fall as well.

         If securities prices fall, securities may become less attractive
investments as compared to other investments. Clients have the right to remove
their assets from our management at any time, and may be more likely to do so
when securities prices decrease. In that case, the amount of assets we manage
may also decrease, and our revenues and net income may fall as well. If our
revenues were to decrease substantially, there could be an impairment of the
value of our acquired intangible assets and goodwill, which would, in turn, have
an adverse effect on our reportable earnings.

         THE ABILITY OF ALL OF OUR CLIENTS TO TERMINATE THEIR ASSET MANAGEMENT
         CONTRACTS WITH US AT WILL MAKES OUR FUTURE CLIENT AND REVENUE BASE
         UNPREDICTABLE.

         Our clients have the right to terminate their asset management
contracts with us at any time without paying any penalty. Therefore, we cannot
be certain that we will continue to receive the fees that the client agreed to
pay in its asset management contract with us, particularly if the client decides
that a competitor's services or fees are more attractive. In addition, if
clients terminate agreements covering a significant portion of the assets we
manage, this would result in a significant loss in our revenues which would
adversely affect our financial condition.

         THE MARKET FOR QUALIFIED PERSONNEL IS HIGHLY COMPETITIVE. IF WE ARE
         UNABLE TO CONTINUE TO ATTRACT AND RETAIN QUALIFIED PERSONNEL, WE WILL
         BE UNABLE TO ADEQUATELY SERVE OUR CLIENT BASE.

         Our asset management approach depends on the expertise of our personnel
and their ability to work together as an effective team. Our business depends on
our ability to attract and retain highly skilled asset management, investment
advisory, research and administrative professionals. Competition for employees
with the necessary qualifications is intense, especially for asset management
and research professionals. If we are unable to attract and retain these
professionals, we will be unable to continue to provide a consistent level of
service to our clients. A failure to adequately serve our clients could result
in clients' withdrawing their assets from our management and could also affect
our ability to attract new clients.

                                       3
<PAGE>

         Our core investment management team currently consists of managers who
have been with us for an average of over eight years. If a substantial number of
these managers were to leave the Stewart Group within a short period of time, it
would be difficult to replace them without disrupting our business. A disruption
in our business could also cause us to lose clients.

         OUR U.S. TAX STATUS COULD BE CHALLENGED. IF U.S. FEDERAL, STATE OR
         LOCAL TAXING AUTHORITIES SUCCESSFULLY CHALLENGE OUR ASSESSMENT OF HOW
         MUCH OF OUR NET INCOME WAS DERIVED FROM ACTIVITIES IN THE UNITED
         STATES, WE COULD BE FORCED TO PAY SIGNIFICANT ADDITIONAL TAXES.

         The Internal Revenue Service, or IRS as it is commonly known, and/or
other U.S. taxing authorities may assert that the Stewart Group has
significantly understated its taxable income and impose tax on the
understatement. The U.S. income tax we have paid and expect to pay is as
follows:

         o        W.P. Stewart & Co., Inc. pays U.S. income tax on its taxable
                  income, consisting primarily of fees received from W.P.
                  Stewart & Co., Ltd. and W.P. Stewart Asset Management Ltd. for
                  sub-advisory and research services less applicable expenses;

         o        W.P. Stewart Asset Management (NA), Inc. pays U.S. income tax
                  on its taxable client servicing fee income on a consolidated
                  federal basis with its wholly-owned subsidiary, W.P. Stewart
                  Asset Management, Inc.; and

         o        W.P. Stewart & Co., Ltd. and W.P. Stewart Asset Management
                  Ltd. paid U.S. income tax on approximately 4% of their
                  earnings in 2002 and on approximately 5% of their earnings in
                  2003, and expect to pay U.S. income tax on approximately 7% of
                  their earnings in 2004, (as computed under U.S. GAAP), the
                  percentage which is, or is expected to be, derived from
                  activities directly carried on in the United States.

         We continue to take the position, which we believe is supported under
existing authority, that no U.S. income tax will be imposed on any additional
income of the Stewart Group for 2002, 2003 and 2004. In particular, no portion
of the income of W.P. Stewart Securities Limited, W.P. Stewart & Co. (Europe),
Ltd., W.P. Stewart Asset Management (Europe), Ltd. and its subsidiaries, NS
Money Management Ltd. or TPRS Services N.V. should be subject to U.S. income
tax. As a consequence, the overall effective tax rate on our earnings was 10.3%
for 2002 and 12.2% in 2003. We believe that the overall tax rate will not exceed
11.1% for 2004 and intend to file tax returns on that basis. The overall
effective tax rate on our earnings in future years using a similar methodology
will vary in accordance with the relative nature and extent of our activities in
the United States and in countries other than the United States.

         The IRS, New York State and/or New York City may disagree with our
positions and assert that (i) the fees paid to W.P. Stewart & Co., Inc. (50
basis points annually calculated on the assets in accounts for which W.P.
Stewart & Co., Inc. provides sub-advisory services and $1.2 million annually for
research relating to other accounts) or W.P. Stewart Asset Management (NA), Inc.
and its subsidiary understated their taxable incomes and/or (ii) the net income
of W.P. Stewart & Co., Ltd. and W.P. Stewart Asset Management Ltd. from business
that they carry on directly in the United States represents more than the amount
reported by those two companies. Any additional net income attributed to W.P.
Stewart & Co., Inc., W.P. Stewart Asset Management (NA), Inc. and its
subsidiaries or the directly-conducted U.S. business of W.P. Stewart & Co., Ltd.
and W.P. Stewart Asset Management Ltd. would be subject to U.S. taxes, at rates
that are currently up to approximately 62%.

         COMPETITION IN OUR INDUSTRY IS INTENSE. THIS COMPETITION MAKES CLIENT
         RETENTION DIFFICULT AND OUR REVENUE BASE UNCERTAIN.

         The asset management business is highly competitive. Our ability to
compete is based on a number of factors, including:



                                       4
<PAGE>

         o        investment performance;

         o        business reputation;

         o        continuity of client relationships and of assets under
                  management; and

         o        the level of fees charged for services.

         We currently compete with a large number of other asset management
firms, as well as broker-dealers, commercial banks, investment banks, insurance
companies and other financial institutions. Because the cost of entering the
asset management business is relatively low, entities may easily be formed which
also may compete with us. If we are not able to compete successfully against
existing and future competitors, current clients may withdraw their assets from
our management, and we may be unable to attract a sufficient number of new
clients to maintain or improve our revenue base and net income.

         WE ARE SUBJECT TO THE CONTROL OF MANY REGULATORY BODIES. THESE
         REGULATORS HAVE THE POWER TO RESTRICT OR LIMIT OUR BUSINESS ACTIVITIES,
         TO CAUSE US TO CHANGE THE MANNER IN WHICH WE CONDUCT OUR BUSINESSES AND
         TO LEVY SUBSTANTIAL PENALTIES OR FINES ON US.

         The asset management industry is subject to regulation in most of the
jurisdictions in which we do business. Our Bermuda companies are subject to the
Investment Business Act 2003 of Bermuda, but by virtue of the nature of their
clients, they are currently exempt from the requirement to hold a license under
that Act. W.P. Stewart & Co., Ltd., W.P. Stewart Asset Management Ltd. and W.P.
Stewart & Co., Inc. are registered as investment advisers with the U.S.
Securities and Exchange Commission, or SEC as it is commonly known, and various
state regulatory agencies. W.P. Stewart Securities Limited, our Bermuda-based
broker-dealer, is registered with the SEC and various state regulatory agencies
as a broker-dealer. In addition, W.P. Stewart Securities Limited is regulated by
the National Association of Securities Dealers, Inc., or NASD as it is commonly
known. W.P. Stewart & Co. (Europe), Ltd. is authorized and regulated by the
Financial Services Authority, or FSA as it is commonly known. W.P. Stewart Fund
Management Limited, our Dublin-based fund management company, is regulated by
the Irish Financial Services Regulatory Authority, or IFSRA as it is commonly
known, previously regulated by the Central Bank of Ireland. WPSH Management N.V.
and the publicly traded funds that it manages, including W.P. Stewart Holdings
N.V., are primarily regulated by the Netherlands Authority for the Financial
Markets, commonly referred to as the AFM. W.P. Stewart & Co., Ltd. has also been
issued a license by the AFM to conduct certain activities in The Netherlands,
which license is conditioned upon compliance with certain obligations of the
licensee.

         These regulatory regimes are designed to protect clients and other
third parties who deal with us and our subsidiaries and to ensure the integrity
of the financial markets. They are not designed to protect our shareholders.

         These regulations often limit our activities through requirements
relating to customer protection, market conduct, money laundering and our level
of net capital. We also face the risk of significant intervention by regulatory
authorities, including extended investigation and surveillance activity,
adoption of costly or restrictive new regulations and judicial or administrative
proceedings that may result in substantial penalties to us. Among other things,
if we were found to have violated a significant regulatory requirement, we could
be fined or enjoined from engaging in certain business activities, and the
registration of certain members of the Stewart Group as investment advisers,
broker-dealers or fund managers could be terminated. If new regulations are
adopted, these consequences could be more significant.



                                       5
<PAGE>

         AS A SHAREHOLDER OF A BERMUDA COMPANY YOU MAY, IN SOME INSTANCES, HAVE
         FEWER RIGHTS AND PROTECTIONS THAN YOU WOULD HAVE AS A SHAREHOLDER OF A
         U.S. COMPANY.

         W.P. Stewart & Co., Ltd. is incorporated in Bermuda and its corporate
affairs are governed by its memorandum of association, its bye-laws and Bermuda
law. Under Bermuda law, shareholders have fewer rights than they might have as
shareholders of a corporation incorporated in a U.S. jurisdiction, and these
rights are less well-defined. It is also more difficult in some respects for
investors to protect their interests in connection with actions by the
management, board of directors or controlling shareholders of a company. For a
description of some of the rights that you will have as a shareholder of W.P.
Stewart & Co., Ltd., see Item 10 B under the caption "Additional Information -
Memorandum and Articles of Association."

         The United States and Bermuda do not have a treaty requiring Bermuda
courts to recognize and enforce U.S. court judgments in civil or criminal
matters. It is not clear that a Bermuda court would enforce a United States
court judgment based solely on the U.S. federal securities laws.

         WE ARE AND WILL CONTINUE TO BE CONTROLLED BY AFFILIATED SHAREHOLDERS.

         All shareholders of WPS II, Inc., our largest shareholder, owning
approximately 42% of the common shares as of February 28, 2005, are current or
former employees of the Stewart Group, members of their families or trusts for
members of their families. Additionally, our directors and executive officers
beneficially own approximately 14% of the common shares. Also, substantially all
of our other employees own common shares. Furthermore, the majority of these
shareholders (including WPS II, Inc.) will not be subject to the voting
limitations described below. WPS II, Inc. and these affiliated individuals,
therefore, will have the power (without the consent of our other shareholders)
to elect the entire board of directors and, as a result, to control the
management and policies of the Stewart Group, including making all decisions
about mergers, acquisitions, sales, borrowings, issuances and redemptions of our
securities and declaration of dividends on the common shares. They also will be
able to decide all other matters submitted to our shareholders for approval,
including amendments to our memorandum of association and bye-laws and certain
equity-based compensation arrangements.

         OUR BYE-LAWS RESTRICT SHAREHOLDERS' VOTING RIGHTS. YOU MAY NOT BE ABLE
         TO VOTE ALL OF THE COMMON SHARES THAT YOU OWN.

         Our bye-laws limit the voting power of natural persons to a maximum of
5% of all votes attributable to our outstanding shares and the voting power of
entities and persons other than natural persons to a maximum of 9.5% of the
votes attributable to our outstanding shares. For these purposes, voting power
held by any person or entity is deemed to include voting power held or shared by
that person or entity as part of a "group" (as defined in the Securities
Exchange Act of 1934). These limitations apply regardless of how many common
shares are actually owned or controlled by a shareholder. These restrictions,
however, will not apply to:

         o        WPS II, Inc.;

         o        Other shareholders or groups of shareholders who were
                  shareholders of W.P. Stewart & Co., Ltd. immediately before
                  our initial public offering in December 2000; and

         o        Certain persons, entities or groups that are designated by our
                  board of directors.

         The votes that could have been cast by shareholders who are subject to
these voting restrictions will be allocated to the other shareholders pro rata
based on the number of shares they hold. However, no shareholder subject to
these restrictions may be allocated additional voting rights to the extent that
the allocation would cause that shareholder to have more than 5% (for natural
persons) or 9.5% (for legal persons or entities) of the total voting power. This
voting limitation was put in place to reduce the likelihood that we will become
a controlled foreign corporation for U.S. tax purposes. See Item 10 E under the
caption "Additional Information - Taxation" for a discussion of the tax
consequences associated with our becoming a controlled foreign corporation.


                                       6
<PAGE>

         Our bye-laws also limit the overall voting power of all persons,
entities or groups to 20% of the total number of all votes attributable to our
outstanding shares. These limitations apply regardless of how many common shares
are actually owned or controlled by a shareholder and regardless of whether the
voting restrictions described in the previous paragraph apply to that
shareholder. These restrictions, however, will not apply to:

         o        WPS II, Inc. or its affiliates;

         o        Direct or indirect subsidiaries of W.P. Stewart & Co., Ltd.;

         o        Any shareholding entity that may be established for the
                  purpose of our employee benefit plans and that is designated
                  by our board of directors; and

         o        Other persons, entities or groups that are designated by our
                  board of directors.

         This voting limitation was put in place to reduce the likelihood of
inadvertent terminations of our advisory agreements as a result of "assignments"
of such contracts.

         These voting limitations and reallocation provisions in our bye-laws
make it difficult or impossible for any person, entity or group to acquire
control of us unless our board of directors, WPS II, Inc. and the other
affiliated shareholders discussed above agree. These provisions also may make it
difficult to remove incumbent directors of the Stewart Group and may limit the
price that investors will be willing to pay in the future for common shares.

         A CHANGE OF CONTROL OF THE STEWART GROUP WOULD AUTOMATICALLY TERMINATE
         OUR CLIENTS' INVESTMENT ADVISORY AGREEMENTS WITH US UNLESS THE CLIENTS
         ELECT NOT TO TERMINATE AND COULD PREVENT US FOR A TWO-YEAR PERIOD FROM
         INCREASING THE INVESTMENT ADVISORY FEES WE ARE ABLE TO CHARGE OUR
         CLIENTS.

         Under the Investment Advisers Act of 1940, as amended, or the Advisers
Act as it is commonly known, a client's investment management agreement will
terminate, unless the client elects otherwise, if the agreement is "assigned" by
the investment adviser without the client's consent. An advisory agreement is
considered to be assigned to another party when a "controlling block" of the
adviser's voting securities is transferred. In our case, an assignment of the
Stewart Group's asset management contracts may occur if, among other things, we
sell or issue a certain number of additional common shares. We cannot be certain
that our clients will consent to the assignment of investment advisory
agreements or approve new agreements with the Stewart Group if a change of
control occurs.

         While the limitation in our bye-laws prohibiting any person or group
from voting more than 20% of the total number of shares of W.P. Stewart & Co.,
Ltd. was put in place to reduce the likelihood of inadvertent terminations of
our advisory agreements as a result of "assignments" of such contracts, there
can be no guarantee that this voting limitation will prevent such a termination
from occurring.

         Under the Investment Company Act of 1940, as amended, or the Investment
Company Act as it is commonly known, a party that acquires control of an
investment company may not impose an "unfair burden" on that company for a
two-year period after a change of control. The term "unfair burden" has been
interpreted to include certain increases in investment advisory fees. This
restriction, along with the difficulty of obtaining a controlling voting
interest in the Stewart Group described above, may discourage potential
purchasers from acquiring a controlling interest in W.P. Stewart & Co., Ltd.



                                       7
<PAGE>

         FUTURE SALES OF CURRENTLY RESTRICTED COMMON SHARES COULD CAUSE THE
         MARKET PRICE FOR THE COMMON SHARES TO DECLINE. IF TOO MANY SHAREHOLDERS
         WHO ARE CURRENTLY RESTRICTED FROM SELLING THEIR COMMON SHARES DECIDE TO
         SELL THESE SHARES ONCE THE RESTRICTIONS ARE LIFTED, THE MARKET PRICE OF
         YOUR COMMON SHARES COULD BE ADVERSELY AFFECTED.

         As of December 31, 2004, there were 46,113,462 common shares issued and
outstanding. Of these shares, 19,154,282 common shares are freely transferable
without restriction or further registration under the Securities Act of 1933, as
amended or the Securities Act, as it is commonly known.

         Sales of substantial numbers of common shares, or the possibility of
such sales, pursuant to Rule 144 under the Securities Act or otherwise, may
adversely affect the market price of the common shares and make it more
difficult for us to raise capital by issuing equity securities.

         THE MARKET PRICE OF THE COMMON SHARES WILL FLUCTUATE.

         The market price for the common shares may be volatile and may
fluctuate based upon a number of factors including, but not limited to:

         o   our operating results;

         o   changes in financial estimates by securities analysts for the
             Stewart Group and/or its competitors;

         o   conditions or trends in the asset management industry;

         o   adoption of new accounting standards affecting the investment
             advisory business;

         o   news announcements; or

         o   changes in general economic and market conditions.

         In addition, the stock market in recent years and months has
experienced extreme price and volume fluctuations that often have been unrelated
or disproportionate to the operating performance of companies. These
fluctuations may materially affect the market price of our common shares.

ITEM 4.  INFORMATION ON THE COMPANY

         A. HISTORY AND DEVELOPMENT OF THE COMPANY

         THE STEWART GROUP

         The Stewart Group, which includes W.P. Stewart & Co., Ltd. and its
subsidiaries and predecessors, is an asset management company that has provided
research-intensive equity investment management services to clients throughout
the world since 1975. Headquartered in Hamilton, Bermuda with additional
operations or affiliates in the United States, Europe, Asia and the Netherlands
Antilles, we managed approximately $9.3 billion in assets as of December 31,
2004. Our client accounts are primarily for high net-worth individuals and
trusts, partnerships, private corporations and other entities in which high
net-worth individuals have a substantial interest, as well as for institutions.
Our client base is geographically diverse, with 33% of our assets under
management from non-U.S. clients as of December 31, 2004.



                                       8
<PAGE>

         Our investment management approach is to seek above-average long-term
investment returns, while accepting what we believe to be below-average risk. We
invest the capital entrusted to us in what we believe are some of the world's
finest growing businesses - large enterprises that are leaders in their
respective fields and that operate businesses with relatively predictable
growth. We focus on a five-year investment horizon and do not engage in market
timing. Our investment approach has realized a compound annualized return,
before fees, of 20.4% and 19.1%, after fees, on funds under discretionary
management from January 1, 1975 through December 31, 2004, as compared with a
return of 13.7% for the S&P 500 over the same period. Our compound annualized
returns for the five and ten years ended December 31, 2004, before fees, were
2.8% and 15.2%, respectively, as compared to -2.3% and 12.1%, respectively, for
the S&P 500 during the same periods. Our compound annualized returns for the
five and ten years ended December 31, 2004, after fees, were 1.6% and 14.0%,
respectively. Our return for the year ended December 31, 2004, before fees, was
20.4% as compared to a return of 10.9% for the S&P 500 during the same period.
Our return for the year ended December 31, 2004, after fees, was 19.2%. See Item
4 B under the caption "Information on the Company - Business Overview."

         Our culture emphasizes teamwork, reinforced by profit sharing and
equity ownership by our employees. Substantially all of our employees are given
the opportunity to become shareholders during their first year of employment
with us, and as a result, virtually all of our employees own common shares.

         We believe that our focused investment approach consistently applied,
together with our compensation policy and stock ownership practice, aligns the
interests of all of our employees with the interests of our clients and
shareholders. This has contributed to close and enduring relationships with our
clients and our long-term record of significant growth in assets under
management.

         The Stewart Group began its business in 1975. Expansion of our client
base throughout the world and enhancement of our global research capability have
been principal elements of our business strategy. We believe that our global
position, described below, will continue to increase our ability to execute this
business strategy and expand our marketing relationships.

         THE GLOBAL CONSOLIDATION

         W.P. Stewart & Co., Ltd. was incorporated on June 29, 1998 under the
laws of Bermuda. On June 30, 1998, the shareholders of our U.S. predecessor
company exchanged all of their interests in that company for shares of WPS II,
Inc., a newly formed holding company. Effective as of July 1, 1998, our U.S.
predecessor company merged into W.P. Stewart & Co., Ltd. with W.P. Stewart &
Co., Ltd. continuing as the surviving company. Upon completion of this merger,
WPS II, Inc. received 29,321,436 common shares representing all of the
outstanding common shares of W.P. Stewart & Co., Ltd. at the effective time of
the merger.

         As the first step in the establishment of the Stewart Group's global
business, Capital Managers Limited, a Bermuda company under common control with
our U.S. predecessor company, was organized in 1996. As of October 30, 1998,
W.P. Stewart & Co., Ltd. merged with Capital Managers Limited with W.P. Stewart
& Co., Ltd. continuing as the surviving company. As a result of the Capital
Managers Limited merger, W.P. Stewart & Co., Ltd. became the owner of Capital
Managers Limited's subsidiaries, W.P. Stewart Securities Limited, W.P. Stewart
Asset Management Ltd. and W.P. Stewart Fund Management Limited. As consideration
in the merger, we issued 13,904,305 common shares to the Capital Managers
Limited shareholders. Each of the Capital Managers Limited shareholders was
either an employee, a retired employee or director of the Stewart Group or a
trustee for the members of an employee's, or retired employee's, family or a
member of an employee's family. Each shareholder of WPS II, Inc. is also a
former shareholder of Capital Managers Limited.

         GLOBAL EXPANSION

         In 1999, we completed three acquisitions and established our London
subsidiary. By these actions, we increased our access to a broader European
clientele, enhanced our global research capability and improved our
asset-gathering in Europe and North America.



                                       9
<PAGE>

         In 1999, we acquired from TPR & Partners N.V. and TPR Curacao N.V. 50%
of the capital stock of TPRS Services N.V., a Curacao company that is engaged in
the business of gathering assets for us. As consideration for the TPRS Services
N.V. acquisition, we issued 1,152,000 common shares. On December 29, 2000, we
consummated the acquisition of the remaining 50% of TPRS Services N.V. in
exchange for 814,000 common shares.

         In 1999, we acquired from Stewart Notz Stucki Limited, an affiliate of
the Notz Stucki group of companies, all of the outstanding capital stock of NS
Money Management Ltd. NS Money Management Ltd. is an international investment
adviser based in Bermuda that has approximately $194 million in assets under
management. W.P. Stewart & Co., Ltd. serves as sub-adviser for all of NS Money
Management Ltd.'s client accounts. We issued 898,831 common shares as
consideration for the acquisition.

         We acquired, in 1999, from First Long Island Holdings, LLC, 100% of the
capital stock of First Long Island Investors, Inc., a significant symbiotic
marketer for us. W.P. Stewart Asset Management (NA), Inc. (as the company is now
known) is an asset-gathering firm based in Jericho, New York, and currently
provides client servicing for the majority of our North American clients. We
issued 1,200,000 common shares as consideration for this acquisition. To enhance
our asset-gathering in North America, we entered into ongoing arrangements with
First Long Island Investors, LLC, an entity under common ownership with First
Long Island Holdings, LLC, under which First Long Island Investors, LLC
continues to service W.P. Stewart Asset Management (NA), Inc.'s former clients
and refers new clients to us.

         Under the terms of the acquisitions of TPRS Services N.V., First Long
Island Investors, Inc. and NS Money Management Ltd., we had the right to
repurchase at nominal consideration, on an annual basis in each year during the
four years after the effective dates of each of those transactions, a portion of
the common shares issued by W.P. Stewart & Co., Ltd. as consideration in those
transactions (not to exceed in the aggregate 80% of the common shares issued in
each transaction) if certain levels of assets under management are not
maintained by the acquired businesses. In January 2003, in accordance with the
provisions of the NS Money Management Ltd. acquisition agreement, we reacquired
35,000 shares.

         In January 2000, W.P. Stewart & Co. (Europe), Ltd. commenced its
investment management business in London. W.P. Stewart & Co. (Europe), Ltd., a
wholly-owned subsidiary of W.P. Stewart & Co., Ltd., provides investment
research and sub-advisory services to our two Bermuda investment advisory
companies (W.P. Stewart & Co., Ltd. and W.P. Stewart Asset Management Ltd.). Our
investment professionals in London developed a European portfolio for our
clientele using the time-tested principles of our U.S. investment philosophy and
approach. In 2002 Lisa Stewart, a founder of Bowen Asia Limited, our 40%
unconsolidated affiliate in Hong Kong, and the daughter of William P. Stewart,
assumed the responsibility for integrating our European and Asian investment
teams to develop a single team responsible for all non-North-American research.
We intend to continue to strengthen our London capabilities to advise on
European and global portfolio products.

         These London initiatives will ensure that the research and investment
management services offered by W.P. Stewart across all geographies are
consistent in style and quality.

         On November 14, 2001, we acquired a controlling interest in TPR &
Partners N.V., an asset-gathering firm based in The Netherlands via the
acquisition of shares in a Bermuda holding company that indirectly owns 100% of
the shares of TPR. TPR was subsequently renamed W.P. Stewart Asset Management
(Europe) N.V. Going forward, the Bermuda company, which is named W.P. Stewart
Asset Management (Europe), Ltd., serves as the umbrella for our European asset
gathering and client servicing activities. In the transaction, we initially
acquired 9,000 of W.P. Stewart Asset Management (Europe), Ltd.'s 12,000
outstanding shares in exchange for 330,000 of our common shares. The former
beneficial owners of TPR and their assigns will continue to hold the remaining
3,000 shares of W.P. Stewart Asset Management (Europe), Ltd. until June 30,
2006, at which time we have agreed to acquire those shares at a fair value price
to be determined on that date. In addition, W.P. Stewart Asset Management
(Europe), Ltd. currently provides client services for approximately $2.8 billion
of our assets under management, and has now taken the lead role in nurturing
established relationships, and developing new relationships, with Europe-based
clients and asset gatherers.



                                       10
<PAGE>

         In 2004, we established Stewart Bowen Japan, Ltd., a 50%-owned joint
venture with Bowen Asia. Stewart Bowen Japan owns W.P. Stewart Japan K.K. which
provides client servicing and asset-gathering activities. This joint venture is
intended to further expand our asset-gathering in Japan and to assist in Bowen's
research activities with respect to Japanese companies.

         W.P. Stewart & Co., Ltd.'s principal executive offices are located at
Trinity Hall, 43 Cedar Avenue, P.O. Box HM 2905, Hamilton HM LX, Bermuda,
telephone number: (441) 295-8585. W.P. Stewart & Co., Ltd.'s agent in the United
States is W.P. Stewart & Co., Inc., 527 Madison Avenue, 20th Floor, New York,
New York 10022, Attention: Michael W. Stamm, Esq., telephone number (212)
750-8585.

         B.  BUSINESS OVERVIEW

         The Stewart Group offers research-intensive equity investment
management services worldwide. Central to our success are three interdependent
competitive strengths - culture, investment methodology and performance record.
We foster team effort, collaboration and a comprehensive focus on achieving
superior portfolio performance. The long-term commitment between the Stewart
Group and our employees is evidenced by our performance-based compensation
policies, employee share ownership and the tenure of our employees. The culture
is a key factor in our ability to implement, over an extended period of time, an
investment methodology that requires intense, shared, continuous research and
debate.

         These elements have contributed to a 20.4% compound annual return
before fees (19.1% after fees) for client accounts from January 1, 1975 to
December 31, 2004.

         While investment performance is our primary focus, asset gathering is
also important to our business. We have developed mutually beneficial
relationships with select institutions and individuals to accumulate new assets
and have internalized relationships with our strongest partners. We will
continue to cultivate long-term relationships with our current network of
marketers and to establish relationships with additional marketers for
additional asset gathering.

         Finally, we intend to continue to pursue a global strategy, both in our
research effort and in the expansion of our client base.

         COMPETITIVE STRENGTHS

         We believe we have a franchise, culture, long-term historical
performance record and investment methodology that position us well to continue
to compete in the global wealth management business. We have built a business
model we believe is unique and have developed and successfully implemented our
disciplined investment philosophy over the past 30 years. Our experienced
investment team currently consists of 22 investment analyst/portfolio managers
with an average of approximately 20 years of experience in the industry.
Thirteen of our analyst/portfolio managers have worked at the Stewart Group for
five years or longer. With nine offices around the world and a selective network
of marketing relationships in more than 10 countries, we have established an
international presence and offer services to a broad range of high net-worth
individuals and institutions throughout the world.



                                       11
<PAGE>

         CULTURE

         We place great emphasis on teamwork and client service. Cooperation is
reinforced through a profit sharing plan and equity ownership by our employees.
All employee compensation is based solely on a percentage of the firm's annual
operating profits; our policy is not to pay fixed salaries or to guarantee
compensation. Substantially all of our employees are given the opportunity to
become shareholders during their first year of employment with us. As a result,
virtually every employee owns common shares of W.P. Stewart & Co., Ltd., which
have been accumulated through voluntary personal investments. Pursuant to our
2001 Employee Equity Incentive Plan, as amended, as of December 31, 2004, an
aggregate of approximately 1,559,000 restricted share awards and option grants
were outstanding or had been exercised. As of July 24, 2004, no additional
awards will be granted under this Incentive Plan. All employee options and share
purchases under such Plan are subject to seven year vesting. During 2004, we
issued an aggregate of 118,000 common shares to ten employees as non-cash
incentive compensation. An additional aggregate of 18,535 shares were issued to
21 employees in January 2005 as part of such employees' non-cash compensation.
It is our present intention to continue to make common shares available to our
employees in proportion to their relative contributions to the Stewart Group.
See Item 6 B under the caption "Directors, Senior Management and Employees-
Compensation."

         We believe that a key to our continued success is our highly motivated
team of experienced investment professionals. Each acts in the dual role of
analyst and portfolio manager, with every investment portfolio handled by an
individual manager, backed up by at least one other manager to provide
continuity and stability. The group of analyst/portfolio managers is relatively
small, a structure we intend to maintain. The investment professionals meet
regularly and are able to interact quickly, informally and effectively.

         All of our investment professionals share a common commitment to both
the demanding standards required to seek to invest only in the world's best
companies and the discipline of our appraisal process. All of them have a record
of successful investing, and most of them have either known each other or worked
closely together for many years. Their investment performance and tenure show
them to be a complementary and effective team.

         LONG-TERM PERFORMANCE RECORD

         During the 30-year period from January 1, 1975 through December 31,
2004, we experienced a 20.4% compound annual return, before fees, and a 19.1%
compound annual return, after fees, compared to a 13.7% return for the S&P 500
Index for the same period. The years ended December 31, 1993, 2000, 2001 and
2002 were the only years since our inception that we experienced negative
performance. We believe that our long-term record and strong investment returns
provide an advantage in our efforts to accumulate assets through strategic
marketing relationships, client referrals and increases to existing client
mandates. As a result of retained investment gains as well as the contribution
of new funds by existing and new clients, our assets under management have grown
at a compound annual rate of approximately 8% during the period from December
31, 1995 to December 31, 2004.

         LOOK THROUGH EARNING POWER

         W.P. Stewart & Co., Ltd. concentrates its investments in large,
generally less cyclical, growing businesses. Throughout most of the Company's
30-year history, the growth in earning power behind clients' portfolios has
ranged from approximately 11% to 22% annually.

         Currently, portfolio earnings growth remains solidly positive and the
Company's research analysts expect portfolio earnings growth to be within the
historical range over the next few years.

         INVESTMENT METHODOLOGY

         Our investment professionals focus on one objective - providing our
advisory clients with above-average investment returns over a long period of
time, while accepting what we believe to be below-average risk. In making
investments, the investment team focuses on a five-year investment horizon and
does not engage in market timing. We believe that our investment research is
distinguished by its intensity. Our analysts/portfolio managers do their own
research on companies they select, and on many they do not select, and derive
investment research information from a variety of sources, both external and
internal. Our analysts visit these companies regularly, contact managements
frequently, talk to competitors, customers and suppliers, and draw upon other
diverse sources of information. While one analyst has the primary responsibility
for each company (generally four to six companies per analyst), information is
also gathered by other analysts and is shared among all investment
professionals.



                                       12
<PAGE>

         Because we consider ourself a long-term investor, the investment
professionals prepare detailed five-year projections for all investment
prospects and investments. These forecasts and the related appraisal of fair
current value for each company under review are used to determine what we
believe to be the intrinsic value of that company and are a critical tool in
developing a comprehensive and detailed evaluation of a company's business. This
appraisal technique systematically examines numerous factors, such as the
company's growth prospects, business and product line strength, management
capabilities, financial resources and many others. The purpose of this appraisal
technique is to evaluate the investment potential and to assess the related
risks of companies under review. Our goal is to construct portfolios of great
businesses, rather than portfolios of stocks. As a result, we consider each
client's portfolio to be a quasi-holding company.

         The purpose of our thorough investment appraisal process is to
concentrate our clients' investments only in those businesses that appear to
offer the greatest long-term appreciation potential. The five-year forecasts,
and the appraisals for companies under review, are refined frequently as our
investment professionals update their research. This consistent coverage allows
our investment professionals to act decisively when changes in price and
circumstances occur.

         At any given time, few businesses meet our standards. Accordingly, our
worldwide investment universe has historically been limited to fewer than 50
investment candidates from each of the United States, Europe, Japan and
Asia-ex-Japan, which are selected based upon a consensus of our investment team.
This has allowed us to concentrate our clients' investments in a portfolio
typically of 15-20 companies that appear to offer the greatest long-term
appreciation potential. The businesses in which we invest normally increase
profits every year. These businesses normally achieve cumulative earnings growth
at a rate we expect will approximately double earning power behind a client's
portfolio every five years. We believe that this pattern of consistent, fairly
rapid, earnings growth has been the primary driver behind the improving value of
our clients' portfolios and the growth of our business over the years.

         Using thorough analysis and intensive research, we select investment
candidates based in part on the following criteria:

         o        a proven track record of consistent profit growth;

         o        strong financial condition;

         o        predictable earnings growth that we believe will continue for
                  the next five years and beyond;

         o        accurate and reliable information that is readily available;

         o        successful, experienced management that is accessible to our
                  investment team;

         o        strong product lines and competitive position, preferably with
                  worldwide presence;

         o        relatively low levels of cyclicality; and

         o        large market capitalization and significant trading liquidity.



                                       13
<PAGE>

         The determination of whether a particular investment prospect is
eligible for inclusion in our investment universe is the result of a collective,
debate-driven process that actively involves all members of our investment team
and reflects their collective research and analytical judgment and experience.
While the entire investment team contributes to the research and appraisal
process, each member has the freedom and responsibility to make investment
decisions with respect to specific client accounts within the confines of the
defined universe.

         BUSINESS STRATEGY

         Our business strategy is to continue to provide premier equity
investment management services on a worldwide basis. We believe that our pursuit
of a more global clientele will lead to continued growth in our assets under
management and our revenues, and that both new and existing clients will benefit
from our increased focus on international research and stock selection. We
intend to adhere to the distinctive and disciplined investment philosophy which
we have pursued over our 30-year history. In addition, we believe that a culture
of ownership and compensation for performance will be a key element for our
continued growth and future success and aligns the interests of our clients,
employees and shareholders.

         EXTEND INVESTMENT PERFORMANCE

         Central to our strategy is our objective to achieve above-average
investment returns over a long period of time for our clients while accepting
what we believe to be below-average risk. We intend to continue to adhere, in
expanding and contracting markets alike, without regard to "benchmarks", to a
philosophy that emphasizes investment over a relatively long-term horizon in
what we believe are high quality, steadily-growing businesses. We intend to
remain focused on investment performance while using our network of symbiotic
marketers as the primary means to gather assets.

         INCREASE GLOBAL RESEARCH FOCUS

         We want our clients to own equity in the finest growing businesses in
the world. We believe that having a global integrated research capability is a
critical element in providing the best investment product. We also believe that
the use of the euro in the European monetary union has led to an improvement in
the quality and availability of financial information and a more consistent
basis for comparing European companies with competitors inside and outside their
home countries. As the universe of high quality companies expands globally, we
intend to maintain a research effort parallel with the growing investment
opportunities. This global research capability will also allow us to meet
particular client needs to the extent that they express any regional or national
preferences. The establishment of W.P. Stewart & Co. (Europe), Ltd., our
ownership of approximately 40% of Bowen Asia Limited, a British Virgin Islands
company operating in Hong Kong, and the establishment of W.P. Stewart Japan
K.K., the operating subsidiary of our joint venture with Bowen, have enabled us
and our affiliate, Bowen, to expand non-U.S. research capability.

         PURSUE GLOBAL CLIENTELE

         We believe that our services and performance have been well-received by
clients throughout the world and that there exists significant opportunity to
expand our clientele internationally, especially in Europe. We believe that
non-U.S. investors are generally under-invested in equity securities and will
look to established professionals like the Stewart Group to invest their wealth.
As part of our strategy to exploit this opportunity, our acquisition of NS Money
Management Ltd., TPRS Services N.V. and TPR & Partners N.V., including its
wholly owned subsidiary, TPR Curacao N.V. and our establishment of W.P. Stewart
& Co. (Europe), Ltd. have increased our access to a broader Europe-based
clientele, provided us with a Europe-based investment management team and formed
the basis for our European client servicing and asset-gathering activities.


                                       14
<PAGE>


         INVESTMENT MANAGEMENT TEAM

Our highly experienced and motivated team of investment professionals has been
critical to our strong long-term investment performance. We have 22 senior
investment professionals and 15 associate portfolio managers who directly
participate in the investment process. The following table identifies the senior
investment professionals and summarizes their experience in the industry as of
March 1, 2005:

<TABLE>
<CAPTION>

                                                                                           YEARS IN        YEARS WITH
                       NAME                             LOCATION                AGE        INDUSTRY         COMPANY
                       ----                          ---------------            ---        --------         -------

<S>                                                     <C>                     <C>           <C>               <C>
John A. Allison................................        Bermuda                  56            22                9

David A. Altman................................        New York                 47            23               11

Marilyn G. Breslow(1)..........................        New York                 60            21               14

Ebrahim Busheri................................        New York                 39            15                3

Sang Chung.....................................        Hong Kong                35            12                1*

Christian Diebitsch............................        London                   41            14                1

Arend E. Dikkers...............................        London                   47            21                2

Aadil Ebrahim..................................        Hong Kong                29            7                 1*

Samantha Epstein-Smith.........................        New York                 35            13                6

Alexander Farman-Farmaian......................        Bermuda                  39            16               16

Robert G. Gebhart..............................        New York                 33            11                2

Peter H. Jennison..............................        New York                 43            20               15

Robert Kahn....................................        New York                 72            45               30

Naomitsu Kimoto................................        Tokyo                    41            16                1*

Celina Lin.....................................        Hong Kong                45            15               10*

Keith Olson....................................        Hong Kong                46            22                2*

Mark I. Phelps.................................        London                   45            20                0(2)

Harry W. Segalas...............................        New York                 44            22               14

Lisa M. Stewart................................        Hong Kong/London         47            22               11*

William P. Stewart.............................        Bermuda                  67            50               30

James T. Tierney...............................        New York                 38            17                5

Harfun Ven.....................................        Hong Kong                33            5                 5*
</TABLE>

---------------------

*        Includes years with Bowen Asia Limited.
(1)      Ms. Breslow has announced that she plans to retire in 2005. Over the
         course of the next couple of months, she will be transferring her
         responsibilities to other senior investment professionals.
(2)      Joined W.P. Stewart in February 2005.


                                       15
<PAGE>


         HISTORICAL PERFORMANCE RECORD

         JANUARY 1, 1975-DECEMBER 31, 2004 PERFORMANCE

         We have achieved a 20.4% compound annual return before fees, and a
19.1% compound annual return after fees for the period from January 1, 1975
through December 31, 2004. This compares to a 13.7% return of the S&P 500 Index
over the same period computed on a comparable basis. Our compound annualized
returns for the five and 10 years ended December 31, 2004, before fees, were
2.8% and 15.2%, respectively, as compared to -2.3% and 12.1%, respectively, for
the S&P 500 during the same periods. Our compound annualized returns for the
five and 10 years ended December 31, 2004, after fees, were 1.6% and 14.0%,
respectively. Our return for the year ended December 31, 2004, before fees, was
20.4% as compared to a return of 10.9% for the S&P 500 during the same period.
Our return for the year ended December 31, 2004, after fees, was 19.2%. We
believe our superior investment results over long time periods are due largely
to our strict adherence to a consistent long-term investment philosophy.

         We believe that our concentration in less cyclical businesses reduces
risk relative to the S&P 500 Index. In the six down market years experienced
since our formation (1977, 1981, 1990, 2000, 2001 and 2002), the S&P 500 Index
declined by approximately 7.4%, 5.0%, 3.1%, 9.1%, 11.9% and 22.1%, respectively.
In those years, accounts managed by us appreciated by approximately 16.0%, 10.8%
and 13.2% in 1977, 1981 and 1990, respectively, and depreciated by approximately
1.3%, 5.8% and 14.4% in 2000, 2001 and 2002, respectively, in each case before
fees, as calculated in the manner described below.


                                       16
<PAGE>


         The chart below illustrates our annual return in client accounts in our
W.P. Stewart U.S. Equity Composite from January 1, 1975 through December 31,
2004. See "Method of Performance Calculation" below.

                          MANAGED ACCOUNTS VS. S&P 500


                                [GRAPH]

                        Value of $100 invested on December 31, 1974
                    ----------------------------------------------------
Year                S&P 500          WPS Pre-Fee            WPS Post-Fee
----                -------          -----------            ------------
'74                     100                  100                     100
'75                     137                  165                     164
'76                     170                  217                     213
'77                     157                  251                     245
'78                     167                  284                     273
'79                     197                  377                     361
'80                     261                  504                     477
'81                     248                  558                     523
'82                     301                  764                     710
'83                     369                  980                     903
'84                     391                1,154                   1,052
'85                     515                1,720                   1,554
'86                     611                2,083                   1,863
'87                     642                2,266                   2,005
'88                     748                2,482                   2,170
'89                     986                3,377                   2,925
'90                     955                3,823                   3,266
'91                   1,247                5,892                   4,988
'92                   1,342                6,307                   5,274
'93                   1,477                6,177                   5,108
'94                   1,496                6,377                   5,212
'95                   2,059                8,592                   6,950
'96                   2,532               11,682                   9,352
'97                   3,377               15,444                  12,242
'98                   4,343               20,486                  16,074
'99                   5,256               22,901                  17,762
'00                   4,778               22,613                  17,318
'01                   4,210               21,296                  16,116
'02                 3,279.0               18,226                  13,610
'03                 4,220.0               21,838                  16,141
'04                 4,679.0               26,291                  19,239



         EXAMINATION OF PERFORMANCE RECORD

         Our independent accountants, PricewaterhouseCoopers LLP, have performed
an examination of our performance record for the period January 1, 1989 through
December 31, 2003, including the five and ten year periods ended December 31,
2003, and have been engaged to perform such an examination to encompass the
period ended December 31, 2004.



                                       17
<PAGE>

         METHOD OF PERFORMANCE CALCULATION

         ACCOUNT INCLUSION. Our performance data, since 1989, reflects the
performance of all client U.S. equity accounts having at least $1 million in
market value as of January 1 of each year for which W.P. Stewart & Co., Ltd.
(including its U.S. predecessor company) and W.P. Stewart Asset Management Ltd.,
our Bermuda-based investment adviser subsidiary, acted with complete
discretionary authority. With respect to periods prior to 1989, the data
reflects performance of a group of accounts believed by management to be
representative of all fully discretionary client equity accounts. If the
criteria for account inclusion since 1989 had been applied for periods prior to
1989, there is no assurance that the results would be consistent, although we
believe the results would not be materially different. The accounts included for
the period from January 1, 1975 through December 31, 2004 are referred to as the
"composite" or the "managed accounts."

         In the case of one portfolio manager who joined the Stewart Group as of
1981, the performance data includes the performance of portfolios managed by him
at a different firm during the period 1975 through 1980 using an investment
philosophy similar to that practiced by us at the time. The effect of this
inclusion is to increase the compound annual return since inception by
approximately one-tenth of one percentage point.

         The managed accounts exclude one portfolio manager's 1977 performance
data, in compliance with certain Advisers Act requirements. The performance
return excluding this data is substantially the same as the performance return
would have been if such data had been included.

         PERFORMANCE CALCULATION. Beginning in 1989, performance figures for the
managed accounts have been calculated using a "time-weighted" rate of return
method, such that additions and withdrawals of capital are weighted based on the
amount of time such capital is held in the account during the period. The annual
performance of an account is derived by linking the periodic rates of return for
such account. Prior to 1989, performance figures were calculated using a linear
non-weighted method, such that beginning of year market values were adjusted to
reflect additions and withdrawals of capital during the year.

         For 1975 through 1988, the annual performance of the managed accounts
is the average of the average performance of the individual managers'
portfolios. Beginning in 1989, the annual performance is the average of all
accounts in the composite. For 1975 through 1992, accounts are given equal
weighting regardless of market value. Beginning in 1993, account performance has
been asset-weighted based on the beginning of year market value of all accounts
in the composite.

         The pre-fee performance of our accounts for all years shown on the
chart reflects the deduction of brokerage commissions but not the deduction of
advisory fees which would reduce the overall return. The post-fee performance of
our accounts for all years shown reflects the deduction of brokerage commissions
as well as advisory fees.

         EFFECT OF ADVISORY FEES. After 1983, the post-fee performance of our
accounts reflects the deduction of the actual advisory fees charged each account
in the composite, adjusted for the effect of capital additions and withdrawals.
For the period 1975 through 1983, we have used the actual fee rates or the
highest fee rates then prevailing.

         From 1975 through 1988, advisory fees were deducted from performance at
the end of each year. If fees had been deducted from performance on a quarterly
basis when charged, the return since inception would have been decreased by
approximately one-tenth of one percentage point.

         S&P 500. The S&P 500 Index annual change shown in the chart relating to
our 1975 through December 31, 2004 performance includes the reinvestment of
dividend income, using a methodology similar to that used for our accounts. It
does not reflect the deduction of any transaction or custodial costs that would
be involved in investing in the S&P 500. The effect of these costs would be to
reduce the indicated return from 1975 through December 31, 2004 for the S&P 500
by an undetermined amount. The S&P 500 Index annual percentage change was
obtained from the Standard & Poor's Corporation, New York, New York.



                                       18
<PAGE>

         ASSETS UNDER MANAGEMENT

         The following table shows assets under management during the period
from January 1, 2002 through December 31, 2004. Changes between beginning and
ending assets under management include capital appreciation or depreciation, net
contributions and net new accounts opened/closed.

                             ASSETS UNDER MANAGEMENT

<TABLE>
<CAPTION>

                                                                                          YEAR ENDED
                                                                                         DECEMBER 31,
                                                                          -----------------------------------------
                                                                            2004             2003           2002
                                                                          ---------        ---------      ---------
                                                                                         (in millions)

<S>                                                                       <C>              <C>             <C>
Beginning Assets Under Management.................................        $    8,561       $  7,655        $  9,171
                                                                          ==========       ========        ========

Ending Assets Under Management....................................        $    9,348       $  8,561        $  7,655
                                                                          ==========       ========        ========
</TABLE>

         The table below illustrates the total net flows of assets under
management which include changes in net flows of existing accounts and net new
flows (net contributions to our publicly available funds and flows from new
accounts minus closed accounts). The table excludes total capital appreciation
or depreciation in assets under management with the exception of the amounts
attributable to withdrawals and accounts closed.

                      NET FLOWS OF ASSETS UNDER MANAGEMENT

<TABLE>
<CAPTION>

                                                                                          YEAR ENDED
                                                                                         DECEMBER 31,
                                                                          -----------------------------------------
                                                                            2004             2003           2002
                                                                          ---------        ---------      ---------
                                                                                         (in millions)
<S>                                                                       <C>              <C>            <C>
Existing Accounts:
   Contributions..................................................        $     912        $     844      $     932
   Withdrawals....................................................             (852)            (892)          (883)
                                                                          ----------       ----------     ---------
Net Flows of Existing Accounts....................................               60              (48)            49
Publicly Available Funds:
   Contributions..................................................              203              171            401
   Withdrawals....................................................             (172)            (167)          (242)
Direct Accounts Opened............................................              228              326            289
Direct Accounts Closed............................................             (940)            (618)          (472)
                                                                          ----------       ----------     ----------
Net New Flows.....................................................             (681)            (288)           (24)
                                                                          ----------       ----------     ----------
Net Flows of Assets Under Management..............................        $    (621)       $    (336)     $      25
                                                                          ==========       ==========     =========
</TABLE>


         The following table shows client retention information for the last
three years.

                                ACCOUNT RETENTION

<TABLE>
<CAPTION>

                                                                                    YEAR ENDED
                                                                                   DECEMBER 31,
                                                                       -----------------------------------------
                                                                         2004             2003           2002
                                                                       ---------        ---------      ---------
<S>                                                                     <C>               <C>                <C>
Number of Accounts at Beginning of Period.....................          2,081             2,204              2,251
Number of Accounts Closed During Period.......................            262               250                200
Retention Rate................................................           87.4%             88.7%              91.1%
</TABLE>


                                       19
<PAGE>

         CLIENT BASE

         Our client base is diverse. Approximately 62% of our assets under
management, and 81% of our accounts, as of December 31, 2004, were associated
with high net-worth individuals and their affiliates. As of December 31, 2004,
approximately 33% of our assets under management were contributed by non-U.S.
clients. The following tables set forth information regarding our client base
and changes in our assets under management over time.

         The following tables show, as of December 31, 2004, 2003 and 2002, the
amount of assets under management in direct relationship client accounts and in
accounts referred to us by clients' consultants, and the number of accounts by
relationship type.


                             ASSETS UNDER MANAGEMENT
                              BY RELATIONSHIP TYPE

<TABLE>
<CAPTION>

                                                                                      AS OF DECEMBER 31,
                                                                          -----------------------------------------
                                                                            2004             2003           2002
                                                                          ---------        ---------      ---------
                                                                                         (in millions)

<S>                                                                        <C>            <C>            <C>
Direct Relationship...............................................         $   8,615      $    7,766     $    6,972

Consultant Related................................................               733             795            683
                                                                           ---------      ----------     ----------

     Total........................................................         $   9,348      $    8,561     $    7,655
                                                                           =========      ==========     ==========
</TABLE>


                               NUMBER OF ACCOUNTS
                              BY RELATIONSHIP TYPE
<TABLE>
<CAPTION>


                                                                                      AS OF DECEMBER 31,
                                                                          -----------------------------------------
                                                                            2004             2003           2002
                                                                          ---------        ---------      ---------

<S>                                                                           <C>             <C>            <C>
Direct Relationship...............................................            1,792           1,914          2,019

Consultant Related................................................              118             167            185
                                                                          ---------       ---------      ---------

     Total........................................................            1,910           2,081          2,204
                                                                          =========       =========      =========
</TABLE>

         Over the years we have established relationships with a select group of
symbiotic marketers that refer portfolio management clients to us in return for
a share of the fees paid by such clients. The value of direct relationship
accounts referred by our symbiotic marketers as of December 31, 2004, 2003 and
2002 represented 39.2%, 37.2% and 37.4%, respectively, of our direct
relationship accounts as of such dates.



                                       20
<PAGE>

         The following table shows our assets under management by client type.

                             ASSETS UNDER MANAGEMENT
                                 BY CLIENT TYPE

<TABLE>
<CAPTION>
                                               ASSETS UNDER MANAGEMENT AS OF                  NUMBER OF ACCOUNTS AS OF
                                                     DECEMBER 31, 2004                           DECEMBER 31, 2004
                                         ----------------------------------------      ------------------------------------
                                            U.S.         NON-U.S.         TOTAL          U.S.        NON-U.S.       TOTAL
                                         ---------    -------------     ---------      ---------    ----------     -------
                                                      (in millions)
<S>                                      <C>           <C>              <C>                <C>             <C>       <C>
 High Net-Worth Individual
      Relationships/Pooled Funds*.....   $   3,276     $     2,529      $   5,805          1,401           153       1,554

 Foundations & Other
      Relationship Directed
      Institutional...................       2,645             215          2,860            245             4         249

 Other Institutional..................         344             339            683             57            50         107
                                         ---------     -----------      ---------      ---------    ----------     -------

      Total...........................   $   6,265     $     3,083      $   9,348          1,703           207       1,910
                                         =========     ===========      =========      =========    ==========     =======
</TABLE>

*    Pooled funds have been included in High Net-Worth Individual Relationships
     because the underlying clients of the pooled fund vehicles are high
     net-worth individuals.

         The following table shows the amount of assets under management
contributed by U.S. and non-U.S. clients.

                             ASSETS UNDER MANAGEMENT
                              U.S./NON-U.S. CLIENTS

<TABLE>
<CAPTION>
                                                                                       AS OF DECEMBER 31,
                                                                          -----------------------------------------
                                                                            2004             2003           2002
                                                                          ---------        ---------      ---------
                                                                                         (in millions)
<S>                                                                       <C>             <C>             <C>
U.S. Clients......................................................        $     6,265     $     6,012     $    5,496

Non-U.S. Clients..................................................              3,083           2,549          2,159
                                                                          -----------     -----------     ----------

     Total........................................................        $     9,348     $     8,561     $    7,655
                                                                          ===========     ===========     ==========
</TABLE>

         INVESTMENT ADVISORY REVENUES

         Advisory fee revenues are generated from investment advisory contracts
between the Stewart Group and clients for whom we manage discretionary accounts.
These agreements are terminable at will by either party on short notice. Under
our current standard fee arrangement, we receive a management fee equal to 1.5%
per annum of the value of the client's account up to $25 million, plus 1.25% per
annum of any account balance in excess of $25 million up to $100 million, plus
1.0% per annum of any account balance in excess of $100 million. Our standard
fee arrangement is non-negotiable. We do not typically offer fixed income
investment management service, although we make this service available to our
clients for whom we manage equity portfolios. Clients' funds held on a long-term
basis in fixed income investments (approximately $25 million at December 31,
2004) are subject to a 0.30% annual fee. We have also offered a limited number
of clients with a high minimum account size the opportunity to pay a lower fixed
fee plus a performance fee. The performance fee is either based upon the
performance of the client's account or the amount by which the account's
performance exceeded the performance of the S&P 500. As of December 31, 2004,
only two clients with an aggregate of $907 million in assets under management
had a performance fee arrangement. This includes W.P. Stewart Holdings N.V., our
mutual fund listed on Euronext Amsterdam. For the year ended December 31, 2004,
we recognized a performance fee of $13.5 million from W.P. Stewart Holdings N.V.
Fees under our investment advisory contracts are billed and payable quarterly,
in advance. Performance fees are recorded as of the date on which the
performance period ends. The following table shows the average annualized gross
management fee, excluding the effect of any performance fees, as a percentage of
assets under management received by us from various segments of our client base
during the year ended December 31, 2004:

                                       21
<PAGE>

<TABLE>
<CAPTION>
                                                                             AVERAGE GROSS MANAGEMENT
                                                                            FEE AS A PERCENT OF ASSETS
                                                                                 UNDER MANAGEMENT
                                                                            --------------------------
                                                                                    YEAR ENDED
CLIENT TYPE                                                                      DECEMBER 31, 2004
----------------------------------------------------------------           --------------------------

<S>                                                                                    <C>
Institutional...................................................                       1.16%

Non-Institutional...............................................                       1.22%

U.S. Clients....................................................                       1.27%

Non-U.S. Clients................................................                       1.02%

Overall Weighted Average........................................                       1.19%

</TABLE>

         The average gross management fee, excluding the effect of any
performance fees, was 1.19% for the year ended December 31, 2004. The average
fee was less than our standard fee of 1.5% because a number of advisory
contracts were entered into prior to 1989, when we adopted our current fee
arrangement, and because account balances in excess of $25 million and $100
million are subject to lower fees.

         Currently, each of our investment advisory contracts names either W.P.
Stewart & Co., Ltd. or W.P. Stewart Asset Management Ltd., our Bermuda-based
investment adviser subsidiary, as the investment adviser. These entities have
engaged and may engage in the future W.P. Stewart & Co., Inc., W.P. Stewart &
Co. (Europe), Ltd. or Bowen Asia Limited to act as sub-adviser for certain
accounts or mandates. Under written sub-advisory agreements, the sub-adviser is
entitled to receive from the named investment advisory entity a fee which is
comparable to fees charged by other unrelated advisers for similar mandates.
W.P. Stewart & Co., Inc. is the investment adviser with respect to W.P. Stewart
& Co. Growth Fund, Inc., a U.S. registered mutual fund sponsored by the Stewart
Group. W.P. Stewart & Co. (Europe), Ltd. is the investment manager with respect
to W.P. Stewart Funds plc and W.P. Stewart (Distributor) Funds plc, open-ended
umbrella funds organized under the laws of Ireland.

         GEOGRAPHIC AREA DATA

         The Company's primary business is the provision of investment advisory
services to clients located throughout the world. The amounts of fee revenue
received from clients in the U.S. and elsewhere for the years ended December 31,
2004, 2004 and 2002 were as follows:


                                   FEE REVENUE
                   -----------------------------------------------------------
                            2004                   2003               2002
                          ------                 ------             -------
U.S.               $       76,129,771      $      70,657,079     $  79,095,944
Non-U.S.                   39,875,729             23,405,259        26,322,834
                   ------------------      -----------------     -------------
Total              $      116,005,500      $      94,062,338     $ 105,418,778
                   ==================      =================     =============


                                       22
<PAGE>

         COLLECTIVE INVESTMENT FUNDS

         Mutual fund and pooled accounts are not a primary focus of the Stewart
Group or its future business strategy. Our U.S. mutual fund is used primarily to
efficiently invest smaller accounts. As of December 31, 2004, we also served as
investment adviser to 38 collective investment funds and other pooled vehicles
organized to meet the fiscal and regulatory requirements of certain U.S. and
non-U.S. clients. The following table sets forth information regarding
collective investment funds and other pooled vehicles with assets under
management in excess of $50 million as of December 31, 2004:



                       JURISDICTION OF                    ASSETS UNDER
                      FORMATION OF FUND                    MANAGEMENT
----------------------------------------------------    ------------------
                                                          (in millions)

Netherlands Antilles.............................          $  877

Luxembourg.......................................             514

British Virgin Islands...........................             189

Austria..........................................              97

United States....................................              84

British Virgin Islands...........................              64

Austria..........................................              58

Luxembourg.......................................              51

         CLEARING CUSTODIAN AND BROKERAGE ARRANGEMENTS

         We do not hold any funds or securities of our clients. Clients' funds
and securities are held by custodians appointed either by the client or, if no
custodian is named by the client, by the Stewart Group. We currently utilize, on
a fully disclosed basis, the services of Neuberger Berman, LLC as clearing agent
and as custodian on accounts where the client makes no custodial designation. We
believe that our current relationship with Neuberger Berman, LLC is satisfactory
but believe that a comparable agreement with a different clearing agent and/or
custodian could be reached if necessary.

         Our investment advisory contracts authorize us to select the broker
through which any transaction may be executed and specifically authorize the use
of our affiliated broker-dealer, W.P. Stewart Securities Limited.

         COMPETITION

         We believe that currently only a limited number of companies with a
similar investment philosophy and practice compete directly with us in our core
business of providing wealth management services to the upper tier of the wealth
management market. However, the investment management business in general is
intensely competitive. In providing investment management services, we compete
with a large number of asset management firms as well as broker-dealers, trust
companies, commercial banks and other specialized wealth management providers.
Our future growth and profitability will be affected by our ability to retain
and increase our market share, which could be adversely affected over the longer
term as competitors seek to develop high net-worth relationships. Many of our
current and potential competitors are significantly larger in terms of capital,
assets, geographic presence, distribution network and other important business
criteria, provide a wider range of services and may have access to greater
financial resources than the Stewart Group.



                                       23
<PAGE>

         REGULATION

         Our business and the investment management industry in general are
subject to extensive regulation in Bermuda, the United States at both the
federal and state levels, the United Kingdom, the Republic of Ireland and The
Netherlands, as well as by various self-regulatory organizations, or SROs as
they are commonly known, in these and other jurisdictions. A number of
regulatory agencies of various jurisdictions are charged with safeguarding the
integrity of the securities and other financial markets and with protecting the
interests of customers participating in markets in those jurisdictions.

         In Bermuda, our investment business is subject to the jurisdiction of
the Bermuda Monetary Authority. The Investment Business Act 2003 requires
licensing of all persons carrying on investment business in or from Bermuda,
unless there is an exemption available to that person under the Act. Our
investment businesses are currently exempt from the licensing requirements of
the Act due to the nature of our clientele.

         In the United States, the SEC is the federal agency that is primarily
responsible for the regulation of investment advisers and broker-dealers, and
the Board of Governors of the Federal Reserve System promulgates regulations
applicable to securities credit transactions involving broker-dealers and
certain other U.S. persons. Investment advisers and broker-dealers are subject
to registration and regulation by state securities regulators in those states in
which they conduct business. Industry SROs, including the NASD and national
securities exchanges, have authority over the firms that are their members.

         In the United Kingdom, the main regulatory body is the Financial
Services Authority. W.P. Stewart & Co. (Europe), Ltd. is authorized and
regulated by the Financial Services Authority. In the Republic of Ireland, the
Irish Financial Services Regulatory Authority is responsible for the regulation
of fund management activities and is the regulatory body that supervises W.P.
Stewart Fund Management Limited and the Dublin domiciled investment funds which
it manages. These responsibilities were previously under the authority of the
Central Bank of Ireland. In The Netherlands, De Nederlandsche Bank N.V., known
as the Dutch Central Bank, has historically been responsible for the regulation
of fund management activities, such as the supervision of WPSH Management N.V.
and the publicly traded funds that it manages, including W.P. Stewart Holdings
N.V., the shares of which fund are traded on Euronext Amsterdam. Most of those
responsibilities of the Dutch Central Bank have been transferred to the
Netherlands Authority for the Financial Markets, commonly referred to as the
AFM, as of September 1, 2002. W.P. Stewart & Co., Ltd. has also been issued a
license by the AFM to conduct certain activities in The Netherlands, which
license is conditioned upon compliance with certain obligations of the licensee,
including the AFM's capital adequacy requirements. W.P. Stewart & Co., Ltd.
currently satisfies these requirements.

         W.P. Stewart & Co., Ltd., W.P. Stewart Asset Management Ltd. and W.P.
Stewart & Co., Inc. are registered as investment advisers with the SEC. As
investment advisers, each is subject to the requirements of the Advisers Act and
the SEC's regulations thereunder. They, and their employees engaged in advisory
services, are also subject to certain state securities laws and regulations, and
to laws regarding fiduciaries. Federal and state regulations impose, among other
things, limitations on the ability of investment advisers to charge
performance-based or non-refundable fees to clients, record-keeping and
reporting requirements, disclosure requirements, limitations on principal
transactions between an adviser or its affiliates and advisory clients,
requirements as to fees paid to solicitors (paid client referral sources),
restrictions on commission and fee arrangements with broker-dealers, and
advertising restrictions, as well as general anti-fraud prohibitions. The state
securities law requirements applicable to employees of investment advisers
include certain qualification requirements as to advisory employees. In
addition, W.P. Stewart & Co., Inc., as investment adviser to a mutual fund
registered under the Investment Company Act, is subject to requirements under
the Investment Company Act and the SEC's regulations thereunder. Such
requirements include, among other things, record-keeping and reporting
requirements and procedures for handling funds. Each of W.P. Stewart & Co.,
Ltd., W.P. Stewart Asset Management Ltd. and W.P. Stewart & Co., Inc. also are
subject to the requirements of the USA Patriot Act of 2001 including the money
laundering prevention provisions thereof.



                                       24
<PAGE>

         Under the Advisers Act, every investment advisory agreement with a
client must expressly provide that it may not be assigned by the investment
adviser without the consent of the client. Under the Investment Company Act,
every investment adviser's agreement with a registered investment company must
provide for the agreement's automatic termination in the event of its
assignment. Under both Acts, an investment advisory agreement is deemed to have
been assigned when there is a direct or indirect transfer of the agreement,
including a direct assignment or a transfer of a "controlling block" of the
firm's voting securities or, under certain circumstances, upon the transfer of a
"controlling block" of the voting securities of its parent corporation. A
transaction is not an assignment under the Advisers Act or the Investment
Company Act, however, if it does not result in a change of actual control or
management of the investment adviser. Any assignment of our investment advisory
agreements would require, as to any registered investment company client, the
prior approval by a majority of its shareholders, and as to our other clients,
the prior consent of such clients to such assignments. Sales by WPS II, Inc. or
other shareholders or our issuances of common shares, among other things, could
result in a deemed assignment of our investment advisory agreements under such
statutes. See Item 3 D under the captions "Key Information - Risk Factors - We
Are Subject to the Control of Many Regulatory Bodies" and "Key Information -
Risk Factors - A Change of Control of the Stewart Group Would Give Our Clients
the Right to Terminate Their Investment Advisory Agreements With Us."

         The officers, directors and employees of our investment management
business may from time to time own securities which are also owned by one or
more of their clients. We have internal policies with respect to, among other
things, individual investments, required reporting of securities transactions
and restrictions on certain transactions so as to reduce the possibility of
conflicts of interest.

         W.P. Stewart Securities Limited, our Bermuda-based broker-dealer, is
registered as a broker-dealer with the SEC and in all 50 states of the United
States and is a member of, and subject to regulation by, the NASD. As a result
of federal and state broker-dealer registration and SRO memberships, W.P.
Stewart Securities Limited is subject to overlapping schemes of regulation which
cover many aspects of its securities business. Such regulations cover matters
including the use and safekeeping of clients' funds and securities,
record-keeping and reporting requirements, and supervisory and organizational
procedures intended to assure compliance with securities laws and prevent
improper trading on material nonpublic information. As a broker-dealer
registered with the SEC and certain states and a member firm of the NASD, W.P.
Stewart Securities Limited is also subject to the capital requirements of the
SEC, the states and the NASD. These capital requirements specify minimum levels
of capital, computed in accordance with regulatory requirements ("net capital"),
that W.P. Stewart Securities Limited is required to maintain and also limit the
amount of leverage that W.P. Stewart Securities Limited is able to obtain in its
business. A failure of W.P. Stewart Securities Limited to maintain its minimum
required capital could require it to cease executing client transactions until
it returned to capital compliance, and could cause it to lose its membership on
an exchange or in an SRO, lose its registration with the SEC or a state, or
require its liquidation. At December 31, 2004, W.P. Stewart Securities Limited
was required to maintain minimum net capital, in accordance with SEC rules, of
approximately $100,000 and had total net capital of approximately $5.4 million,
or approximately $5.3 million in excess of the amount required. W.P. Stewart
Securities Limited also is subject to the requirements of the USA Patriot Act of
2001, including the money laundering prevention provisions thereof.

         W.P. Stewart & Co. (Europe), Ltd. is a member of, and subject to
regulation by, FSA in the United Kingdom. Its permitted activities are limited
to providing investment management and investment advice, together with the
marketing of unregulated collective investment schemes. FSA regulations cover
matters such as the use and safekeeping of clients' funds and securities,
record-keeping and reporting requirements, employee-related matters, including
qualification and approval of supervisory, investment management and sales
personnel, disclosure requirements, advertising restrictions and minimum levels
of capital. W.P. Stewart & Co. (Europe), Ltd. currently satisfies its minimum
capital requirements.



                                       25
<PAGE>

         W.P. Stewart Fund Management Limited is subject to the supervisory
control of the Irish Financial Services Regulatory Authority. The permitted
activities of W.P. Stewart Fund Management Limited include the provision of
services consisting of the establishment and management of specified collective
investment undertakings, the provision of management and administration services
and of investment and financial advice. W.P. Stewart Fund Management Limited
also is subject to minimum capital requirements, ongoing reporting and
disclosure requirements and such other prudential and supervisory requirements
as IFSRA may issue from time to time. W.P. Stewart Fund Management Limited
currently satisfies its minimum capital requirements.

         Compliance with many of the regulations applicable to us involves a
number of risks, particularly because applicable regulations in a number of
areas may be subject to varying interpretation. Regulators make periodic
examinations and review annual, monthly and other reports on our operations,
track record and financial condition. In the event of a violation of or
non-compliance with any applicable law or regulation, governmental regulators
and SROs may institute administrative or judicial proceedings that may result in
censure, fine, compensation orders, civil penalties (including treble damages in
the case of insider trading violations), criminal penalties, the issuance of
cease-and-desist orders, the deregistration or suspension of the non-compliant
firm, the suspension or disqualification of the firm's officers or employees and
other adverse consequences. We have not experienced any such penalties to date.
Such violations or non-compliance also could subject us and/or our employees to
civil actions by private persons. Any governmental, SRO or private proceeding
alleging violation of or non-compliance with laws or regulations could have a
material adverse effect upon our business, financial condition, results of
operations and business prospects.

         The regulatory environment in which we operate is subject to change. We
may be adversely affected as a result of new or revised legislation or
regulations imposed by the SEC, other U.S., state or non-U.S. governmental
regulatory authorities or SROs. We also may be adversely affected by changes in
the interpretation or enforcement of existing laws and rules by these
governmental authorities and SROs. Our businesses may be materially affected not
only by securities regulations but also by regulations of general application.
For example, the volume of our principal investment advisory business in a given
time period could be affected by, among other things, existing and proposed tax
legislation and other governmental regulations and policies (including the
interest rate policies of the Federal Reserve Board) and changes in the
interpretation or enforcement of existing laws and rules that affect the
business and financial communities.



                                       26
<PAGE>

         C.  ORGANIZATION STRUCTURE

         The organizational chart set forth below shows our operating structure,
our principal operating subsidiaries, the jurisdiction of incorporation of our
subsidiaries and, in the case of subsidiaries that are not wholly-owned, the
percentage of shares that we hold in those subsidiaries. We believe this
operating structure positions us effectively to service our global clientele and
pursue our global strategy.


<TABLE>
<CAPTION>

<S>                <C>             <C>           <C>           <C>           <C>            <C>             <C>          <C>
                                              --------------------------
                                               W.P. Stewart & Co., Ltd.,
                                                  our Bermuda-based
                                                  investment adviser

                                              --------------------------
                                                           |
                                                           |
                                                           |
      ------------------------------------------------------------------------------------------------------------------------|
      |                |                |             |            |              |               |             |             |
      |                |                |             |            |              |               |             |      Approx.|
      |75%             |                |             |            |              |               |             |         40% |
--------------    ------------    ------------  -----------  ------------   --------------  -------------  -----------   -----------
W.P. Stewart         W.P.          NS Money        W.P.          W.P.           W.P.        W.P. Stewart      TPRS        Bowen
    Asset           Stewart &      Management    Stewart &      Stewart        Stewart          Asset        Services       Asia
  Management          Co.          Ltd., our    Co., Inc.,       Asset        Securities      Management     N.V., our   Limited,(1)
   (Europe),        (Europe),       Bermuda-      our New      Management    Limited, our    (NA), Inc.,     Curacao-       our
  Ltd.,(2) our      Ltd., our      based asset     York-        Ltd., our      Bermuda-          our        based asset     Hong
    Bermuda -       London-         manager       based        Bermuda-         based         New York-      gatherer       Kong-
    based            based                        research       based          broker-      based asset                    based
   umbrella        research                      affiliate      investment      dealer        gatherer                    research
  company for      affiliate                                    adviser                                                   affiliate
   European
asset gathering
---------------   ------------    ------------  -----------  ------------   --------------  -------------   -----------  -----------
      |                                                            |
      | (3)                                                        |
      |                                                            |
--------------                                               ------------
W.P. Stewart                                                      W.P.
   Asset                                                        Stewart
 Management                                                      Fund
(Europe) N.V.,                                                Management
    our                                                       Limited, our
Netherlands-                                                    Dublin-
 based asset                                                  based fund
  gatherer                                                     management
                                                                company
--------------                                               ------------
</TABLE>


1.   W.P. Stewart & Co., Ltd. has entered into an agreement pursuant to which it
     has an option (exercisable from June 2004 to June 2009) to increase
     ownership to 50% or more.

2.   W.P. Stewart & Co., Ltd. has entered into an agreement pursuant to which
     it will acquire the remaining 25% on June 30, 2006.

3.   Indirectly owned.


                                       27
<PAGE>

         D.  PROPERTY, PLANT AND EQUIPMENT

         Our headquarters and certain of our executive offices are located at
Trinity Hall, 43 Cedar Avenue, Hamilton, Bermuda in a building owned by a joint
venture between the Stewart Group and The Bank of Bermuda Limited and leased to
us by the joint venture on arms-length commercial terms. We also lease offices
in New York, New York; Portland, Maine; London, England; Curacao, Netherlands
Antilles; Oegstgeest, The Netherlands; and, through a joint venture with Bowen
Asia Limited, Tokyo, Japan. We believe our facilities have been well maintained,
are in good operating condition, are adequate for our current operational
requirements and could be replaced, if necessary, on acceptable terms.

ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS

         OVERVIEW

         W.P. Stewart & Co., Ltd., together with its subsidiaries, is a
research-focused investment counselor that manages assets for high net-worth
individuals and institutions located throughout the world. Our principal source
of revenues is investment advisory fees and, accordingly, fluctuations in
financial markets and client contributions and withdrawals have a direct effect
on revenues and net income. Additionally, significant components of our expenses
are variable in nature and tend to partially offset fluctuations in revenue.

         Our advisory fees are computed quarterly based on account market values
and fee rates pursuant to investment advisory contracts with clients. Our policy
is to bill clients quarterly, in advance. As a result of this policy, the
increase in assets under management due to our strong performance during the
fourth quarter of 2004 did not affect revenue until the first quarter of 2005.

         Another component of our revenues is brokerage commissions. Commission
revenues earned on our brokerage activities, substantially all of which relate
to client accounts, vary directly with account trading activity and new account
generation. Therefore, commission revenue is also affected by market conditions.

         Interest and other revenue primarily consists of interest earned on
notes receivable for employee purchases of common shares, interest earned on our
cash management activities, investment and foreign currency gains and losses,
subscription fees earned from our mutual funds and equity income relating to our
investments in unconsolidated affiliates.

         We provide competitive rewards to our employees through our
compensation and benefits policies, together with our employee equity ownership
practices. Employee compensation and benefits are our largest operating expense,
the most significant component of which is compensation paid to our research
analysts/portfolio managers. Compensation for all employees varies with
operating profit. At the beginning of each year, each employee is allocated a
participation in our compensation pool. Certain employees may also be eligible
for other cash or non-cash incentive compensation. Compensation paid depends
upon our actual operating profit, as adjusted for amortization of intangibles,
non-cash compensation and retirement benefits ("adjusted operating profit"). We
review from time to time the percentage of operating profit made available for
the compensation pool. Under our variable compensation program, which heavily
weights compensation against profit performance, compensation expense currently
may vary between 20.7% and 24.5% of adjusted operating profit. Compensation
expense was approximately 24%, 24.8% and 24% of adjusted operating profit for
the years ended December 31, 2004, 2003 and 2002, respectively. It is currently
anticipated that compensation expense for the year ending December 31, 2005 will
be approximately 24%.



                                       28
<PAGE>

         Fees paid out are paid to select banks, investment firms and
individuals in at least 10 countries, with whom we have formal marketing
arrangements that make up our network of symbiotic marketers. We consider the
banks, investment firms and individuals who gather assets for us to be symbiotic
marketers of our services because of the mutual benefits that flow from the
relationship - they are able to offer premier equity investment management
services to their clients and we are able to extend the reach of our
asset-gathering efforts. These fees are based on the market value of referred
accounts and vary based on new account generation and fluctuations in the market
value of referred accounts.

         Commissions, clearance and trading expenses include fees incurred
related to brokerage activities. These transaction-related costs vary directly
with trading activity. Transaction costs are reviewed quarterly and are
competitive.

         Research and administration expenses include research, travel and
entertainment, communications, information technology systems support and
occupancy.

         Marketing expenses represent costs associated with our internal
marketing initiatives and client servicing activities, and include client
seminars, marketing related travel, marketing related compensation and other
operational expenses.

         Other operating expenses include professional fees consisting of
auditing, tax, legal and consulting fees, charitable contributions and other
administration expenses.

         Substantially all of our employees are given the opportunity to become
shareholders during their first year of employment with us. As a result,
virtually all of our employees are shareholders of W.P. Stewart & Co., Ltd. and
participate in the results of our operations.

         CRITICAL ACCOUNTING POLICIES

         GOODWILL AND INTANGIBLE ASSETS Our consolidated statement of financial
condition includes substantial assets in the form of goodwill and intangible
assets. We account for those assets in accordance with Statement of Financial
Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets." The
intangible assets were among the assets that we acquired in the business
acquisitions described in Note 2 of our consolidated financial statements
included with this report. We amortize the intangible assets on a straight-line
basis over their estimated useful lives, which range from five to 20 years. We
test the carrying values of these assets for impairment annually and whenever
events or changes in circumstances indicate that such values may not be
recoverable. There would be an impairment loss if and to the extent that the sum
of the assets' expected future undiscounted cash flows were to be less than
their carrying values. We acquired goodwill in our acquisition of TPR & Partners
N.V. Goodwill is the excess of the total acquisition cost over the fair value of
the net assets on the date of the acquisition. We do not amortize goodwill, but
we test it annually for impairment. If we were to experience a significant
reduction in revenues from the acquired businesses or from our reporting units,
the carrying values of our goodwill or intangible assets could be materially
impaired and the resulting impairment losses could have a material adverse
effect on our earnings.

         A.  OPERATING RESULTS

YEAR ENDED DECEMBER 31, 2004 AS COMPARED TO YEAR ENDED DECEMBER 31, 2003

         ASSETS UNDER MANAGEMENT

         Assets under management were more than $9.3 billion at December 31,
2004, an increase of approximately $0.7 billion or 8.1% from approximately $8.6
billion at December 31, 2003. This reflected the strong investment performance
of our clients' portfolios in 2004, especially in the fourth quarter of the
year, partially offset by negative net flows of assets under management.

         The following table sets forth the total net flows of assets under
management for the years ended December 31, 2004 and 2003, which include changes
in net flows of existing accounts and net new flows (net contributions to our
publicly available funds and flows from new accounts minus closed accounts). The
table excludes total capital appreciation or depreciation in assets under
management with the exception of the amounts attributable to withdrawals and
closed accounts.



                                       29
<PAGE>

                        NET FLOWS OF ASSETS UNDER MANAGEMENT
                                   (IN MILLIONS)
                                                               YEARS ENDED
                                                               DECEMBER 31,
                                                          -------------------
                                                            2004       2003
                                                          ---------  --------
Existing Accounts:
  Contributions                                           $ 912      $ 844
  Withdrawals                                              (852)      (892)
                                                          ---------  --------
Net Flows of Existing Accounts                               60        (48)
                                                          ---------  --------
Publicly Available Funds:
  Contributions                                             203        171
  Withdrawals                                              (172)      (167)
Direct Accounts Opened                                      228        326
Direct Accounts Closed                                     (940)      (618)
                                                          ---------  --------
Net New Flows                                              (681)      (288)
                                                          ---------  --------
Net Flows of Assets Under Management                      $(621)     $(336)
                                                          =========  ========

         REVENUES

         Revenues were $152.3 million for the year ended December 31, 2004, an
increase of $33.5 million or 28.2% from $118.8 million earned for the year ended
December 31, 2003. The change was due to a $21.9 million or 23.3% increase in
fee revenue, a $12.4 million or 55.0% increase in commission revenue and a $0.8
million or 34.3% decrease in interest and other revenues. The average gross fee
earned from client accounts, excluding the effect of any performance fee, was
1.19% for the year ended December 31, 2004 as compared to 1.22% for the year
ended December 31, 2003, due to a slight change in client account mix due to
larger accounts subject to our fee break. The increase in fee revenue was
attributable to higher levels of assets under management during 2004 and a
performance fee of $13.5 million from W.P. Stewart Holdings N.V., our mutual
fund listed on Euronext Amsterdam. Because we bill our fees quarterly, in
advance, the strong fourth quarter increase in assets under management had no
effect on our 2004 fee revenue. Commission revenue was significantly higher for
the year ended December 31, 2004, compared to the year ended December 31, 2003,
and reflects among other factors, that new companies were added to most clients'
portfolios during the year ended December 31, 2004, resulting in corresponding
buys and sells. Interest and other revenues decreased primarily due to a gain
realized on the sale of municipal bonds during the year ended December 31, 2003,
foreign currency losses incurred during the year ended December 31, 2004 in our
European operations due to the weaker U.S. dollar as compared to the British
pound sterling and the euro, lower subscription fees earned from our mutual
funds and lower equity income from our unconsolidated affiliates.

         EXPENSES

         Expenses, excluding income taxes, increased approximately $11.6 million
or 16.6% to $81.3 million for the year ended December 31, 2004 from $69.7
million in the prior year. The increase was due to changes in operating
expenses, including an increase in variable expenses of $1.7 million in fees
paid out, which are directly related to assets under management of referred
accounts, an increase in commissions, clearance and trading of $2.6 million,
which vary with account activity, an increase in employee compensation and
benefits of $6.2 million due to an increase in adjusted operating profit, on
which that compensation is based. Additionally, marketing expenses increased
$0.9 million due to higher costs related to marketing travel, our new corporate
branding program and higher than anticipated marketing compensation due to very
strong performance in the fourth quarter 2004, research and administration
increased $0.3 million, depreciation and amortization increased $0.1 million and
other operating expenses decreased $0.2 million due to generally lower costs
relating to a variety of operating expenses.



                                       30
<PAGE>

         Our income tax expense increased $1.9 million to $7.9 million for the
year ended December 31, 2004 from $6.0 million in the prior year. The effective
tax rate was approximately 11.1% for 2004 and 12.2% for 2003. The higher than
expected tax rate for the year ended December 31, 2004, was due to the
performance fee earned on December 31, 2004, with a portion being taxed as U.S.
effectively connected business income.

         NET INCOME

         Net income for the year ended December 31, 2004 increased $20.1 million
or 46.6% to $63.1 million from $43.1 million for the prior year as revenues
increased at a higher rate than operating expenses.

YEAR ENDED DECEMBER 31, 2003 AS COMPARED TO YEAR ENDED DECEMBER 31, 2002

         ASSETS UNDER MANAGEMENT

         Assets under management were approximately $8.6 billion at December 31,
2003, an increase of approximately $0.9 billion or 11.7% from approximately $7.7
billion at December 31, 2002. This reflected the strong investment performance
of our clients' portfolios in 2003, especially in the second and fourth quarters
of the year, partially offset by negative net flows of assets under management.

         The following table sets forth the total net flows of assets under
management for the years ended December 31, 2003 and 2002, which include changes
in net flows of existing accounts and net new flows (net contributions to our
publicly available funds and flows from new accounts minus closed accounts). The
table excludes total capital appreciation or depreciation in assets under
management with the exception of the amounts attributable to withdrawals and
closed accounts.

                       NET FLOWS OF ASSETS UNDER MANAGEMENT
                                   (IN MILLIONS)
                                                          YEARS ENDED
                                                         DECEMBER 31,
                                                    ------------------------
                                                       2003          2002
                                                    ----------    ----------
 Existing Accounts:
  Contributions                                     $  844        $  932
  Withdrawals                                         (892)         (883)
                                                    ----------    ----------
Net Flows of Existing Accounts                         (48)           49
                                                    ----------    ----------
Publicly Available Funds:
  Contributions                                        171           401
  Withdrawals                                         (167)         (242)
Direct Accounts Opened                                 326           289
Direct Accounts Closed                                (618)         (472)
                                                    ----------    ----------
Net New Flows                                         (288)          (24)
                                                    ----------    ----------
Net Flows of Assets Under Management                $ (336)       $   25
                                                    ==========    ==========



                                       31
<PAGE>

         REVENUES

         Revenues were $118.8 million for the year ended December 31, 2003, a
decrease of $18.5 million or 13.5% from $137.3 million earned for the year ended
December 31, 2002. The change was due to an $11.4 million or 10.8% decrease in
fee revenue, a $5.8 million or 20.6% decrease in commission revenue and a $1.3
million or 36.2% decrease in interest and other revenues. The average gross fee
earned from client accounts was 1.22% for the year ended December 31, 2003 as
compared to 1.23% for the year ended December 31, 2002, due to a slight change
in client account mix due to larger accounts subject to our fee break. The
decrease in fee revenue was attributable to the decrease in assets under
management during 2002 and the first quarter of 2003. Because we bill our fees
quarterly, in advance, the strong fourth quarter increase in assets under
management had no effect on our 2003 fee revenue. The decrease in commission
revenue was primarily due to lower levels of trading volume during 2003 as
compared with the higher levels of trading volume experienced in 2002. Interest
and other revenues decreased primarily due to lower equity income from our
unconsolidated affiliates, lower cash balances during 2003 reflecting our use of
cash for share repurchases in 2002, lower interest earned on our cash balances
due to prevailing market rates and lower interest earned on shareholders' loans,
reflecting lower average interest rates and substantial repayments of principal.

         EXPENSES

         Expenses, excluding income taxes, decreased approximately $5.7 million
or 7.6% to $69.7 million for the year ended December 31, 2003 from $75.4 million
in the prior year. The decrease was due to changes in operating expenses,
including a decrease in variable expenses of $1.2 million in fees paid out,
which are directly related to assets under management of referred accounts, a
decrease in commissions, clearance and trading of $1.1 million, which vary with
account activity, and a decrease in employee compensation and benefits of $3.4
million due to a decrease in adjusted operating profit, on which that
compensation is based. Additionally, marketing expenses decreased $0.5 million
due to slightly lower costs and other operating expenses increased $0.5 million
primarily due to generally higher costs relating to a variety of operating
expenses and an increase in professional fees.

         Our income tax expense decreased $0.4 million to $6.0 million for the
year ended December 31, 2003 from $6.4 million in the prior year. The effective
tax rate was approximately 12.2% for 2003 and 10.3% for 2002. The increase in
the effective tax rate was primarily due to the substantial decrease in the
commission income of our Bermuda-based broker-dealer subsidiary and an increase
in our U.S. effectively connected business income.

         NET INCOME

         Net income for the year ended December 31, 2003 decreased $12.4 million
or 22.3% to $43.1 million from $55.5 million for the prior year as a result of
the items described above.

         INFLATION

          Our assets are largely liquid in nature and, therefore, not
significantly affected by inflation. However, the rate of inflation may affect
our expenses, such as information technology and occupancy costs, which may not
be readily recoverable in the pricing of the services that we provide. To the
extent inflation results in rising interest rates and has other negative effects
upon the securities markets, it may adversely affect our financial position and
results of operations.


                                       32
<PAGE>

         B.  LIQUIDITY AND CAPITAL RESOURCES

         Our financial condition is highly liquid with principal assets
including cash and cash equivalents, investments available for sale and
receivables from clients. Cash equivalents are primarily short-term, highly
liquid investments with an original maturity of three months or less at the date
of purchase. Liabilities include operating payables and accrued compensation.
Our investment advisory activities do not in general require us to maintain
significant capital balances. However, our advisory activities for clients in
The Netherlands, the activities of W.P. Stewart Securities Limited, our
Bermuda-based broker-dealer, and the sub-advisory activities of W.P. Stewart &
Co. (Europe), Ltd., our London-based research affiliate, require us to maintain
certain minimum levels of capital.

         We continually monitor and evaluate the adequacy of the capital
maintained for those activities and have consistently maintained net capital in
excess of the prescribed amounts. Historically, we have met our liquidity
requirements with cash generated from our operations.

         In 1998, WPS Aviation Holdings LLC, a limited liability company wholly
owned by us acquired, by assignment, the rights and obligations of Shamrock
Aviation, Inc., a company controlled by certain shareholders of W.P. Stewart &
Co., Ltd., under a purchase agreement to buy a Challenger aircraft for $22.5
million. The aircraft was placed in service on April 8, 1999. General Electric
Capital Corporation financed the aircraft with 10-year, amortizing loans. During
1999, we paid $22.5 million under the purchase agreement, of which GECC provided
$19.6 million under the loans. Shamrock Aviation, Inc., or an entity affiliated
with Shamrock, operated the Challenger aircraft for us. We are charged actual
cost of operations for such operating services. We believe that ownership of
this aircraft enables us to efficiently manage the heavy travel schedules of our
investment and research professionals, at rates more favorable to us than would
be charged by an unaffiliated charterer.

         On July 10, 2003, WPS Aviation entered into a 10-year amortizing loan
agreement with GECC to continue to finance its obligations under the Challenger
Purchase Agreement. The purpose of this new agreement was solely to consolidate
all prior obligations to GECC and to reduce the fixed interest rates under the
previous obligations. This new loan was for the principal sum of $17.3 million
at a floating per annum simple interest rate, as defined in the loan agreement
as the contract rate, to be paid in 120 monthly installments and a final
installment of $8.6 million plus any outstanding interest. The contract rate of
interest is equal to the sum of (i) two and 25/100 percent (2.25%) per annum
plus (ii) a variable per annum interest rate equal to the rate listed for one
month commercial paper (non-financial).

         We anticipate that our cash flow from operations will be sufficient to
meet our debt and other obligations as they come due as well as our anticipated
capital requirements.

         Our liquidity, facilities and overall financial condition remain
strong. We have maintained our customary quarterly dividend and have funded that
dividend out of operating cash flow. Our board of directors carefully
scrutinizes our earnings and cash position quarter-by-quarter to ascertain the
prudence of our dividend. Although there can be no guarantee that the dividend
will remain at historic levels indefinitely, there currently are no plans for
reducing it. Consistent with this focus, our board of directors will continue to
monitor our liquidity and our ability to pay dividends and will also consider
opportunities for share repurchases with a view toward increasing long-term
shareholder value.

         C.  RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.

         Not Applicable.

         D.  TREND INFORMATION

          The positive performance of our clients' portfolios seen in 2003
continued in 2004, with the most significant increase occurring in the last
quarter of 2004. Due to our practice of billing quarterly in advance, positive
performance in the last quarter of 2003 did not affect revenue until the first
quarter of 2004.



                                       33
<PAGE>

         As we had predicted, for 2004, our U.S. Equity Composite significantly
outperformed the S&P 500 on both a pre-fee and post-fee basis. In 2003, our
performance results lagged the S&P 500, which we believe is not uncommon in the
early stages of an economic recovery. However, as the economic recovery matured,
our performance exceeded the S&P 500. Historically, we have seen that in the
first year of a recovery, quality shares tend to lag, but this period is usually
limited in duration to 12-15 months. This pattern repeated itself, with quality
shares beginning to outperform in the second half of 2004. What is more
significant is that, in previous periods, our experience has been that this
out-performance can last for several years. Hence, we are optimistic about 2005
and the following several years.

         Our positive performance has been somewhat offset over the past couple
of years by negative net flows of assets under management. We are working to
expand and develop existing and new distribution alliances in order to reverse
this trend. We believe we have made some progress in 2004 in this regard;
however, this is not an exercise that leads to quick results.

         As 2004 began, investors faced many uncertainties related to the
domestic and international environment. Yet, the market showed a positive
advance for the second year in a row. Heading into 2005, there will no doubt be
issues that equity investors need to grapple with. Stability in Iraq and
elsewhere in the Middle East is a continuing issue. The dollar remains
relatively weak, widening an already large trade deficit. In addition, pockets
of the economy are showing signs of inflation, and many analysts expect
corporate profits to slow in the U.S. We are not immune to these external
factors, as they may weigh on stock valuations on the whole. However, we believe
there are reasons to be optimistic, especially about the companies in our
clients' portfolios. The U.S. economy should continue to grow - albeit at a
moderate 2-4% pace - keeping inflation in currencies in check. As for corporate
profits, an overall slowing of earnings should make the superior growth
prospects of our portfolio companies even more attractive. The companies in our
clients' portfolios share many of the following characteristics: strong cash
flows, active share repurchase programs or dividend increases, market share
increases gained during the recent recession and strong earnings growth. Indeed
the current pace of earnings growth underlying our U.S. Equity Composite is in
the 12% - 14% range, which we consider sustainable over the next few years.
Throughout our history, the investment of our clients' funds in companies of
such high quality has produced solid long-term results.

         E.  OFF-BALANCE SHEET ARRANGEMENTS

         We have no off-balance sheet arrangements.

         F.  TABULAR DISCLOSURE OF CONTRACTUAL ARRANGEMENTS

         W.P. Stewart & Co., Ltd. has contractual obligations to make future
payments under long-term debt and non-cancelable operating lease agreements and
has contingent commitments as disclosed in the notes to the consolidated
financial statements. The following tables set forth these contractual
obligations and contingent commitments as of December 31, 2004:

                             CONTRACTUAL OBLIGATIONS
                                  (IN MILLIONS)
<TABLE>
<CAPTION>

                                              2005          2006-2007     2008-2009      2010-THEREAFTER      TOTAL
                                              ----          ---------     ---------      ---------------      -----
<S>                                          <C>             <C>            <C>             <C>              <C>
Long-Term Debt (1)                            $0.8            $1.6           $1.8            $12.0            $16.2
Minimum Rental Commitments (2)                $3.0            $5.5           $2.0            $ 5.5            $16.0
(1)      See Note 8 to the consolidated financial statements for additional information.
(2)      See Note 17 to the consolidated financial statements for additional information.
</TABLE>


                                       34
<PAGE>



                             CONTINGENT COMMITMENTS
                                  (IN MILLIONS)

<TABLE>
<CAPTION>

                                                            AMOUNT OF COMMITMENT EXPIRATION PER PERIOD
                                                            ------------------------------------------
                                                 2005       2006-2007     2008-2009      2010-THEREAFTER      TOTAL
                                                 ----       ---------     ---------      ---------------      -----
<S>                                 <C>                       <C>                             <C>              <C>
Commitments under letters of credit (3)            -          $1.2            -               $0.7             $1.9



(3)   See Note 9 to the consolidated financial statements for
      additional information.
</TABLE>

ITEM 6.  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

         A.  DIRECTORS AND SENIOR MANAGEMENT

         Members of the board of directors of W.P. Stewart & Co., Ltd. are
elected by the shareholders of W.P. Stewart & Co., Ltd. All directors serve
until re-elected at the next annual general meeting or their successors are
elected or appointed.

         The following table sets forth information with respect to the current
directors and executive officers of W.P. Stewart & Co., Ltd.

<TABLE>
<CAPTION>
NAME                                                            POSITION                              POSITION HELD SINCE
------------------------------------ ---------------------------------------------------------------- ---------------------
<S>                                  <C>                                                                   <C>
William P. Stewart.................  Chairman, Chief Executive Officer and Director(1)                June 1998
John C. Russell....................  Deputy Chairman, Managing Director and Director(1)               June 1998
Dominik M.F. Brunner...............  Director(3)                                                      May 2004
Angus S. King, Jr..................  Director(2)(4)                                                   February 2004
Henry B. Smith.....................  Director(1)                                                      June 1998
Heinrich Spangler..................  Director(2)(3)(4)                                                June 1998
Jan J. Spiering....................  Director(3)                                                      September 2004
Richard D. Spurling................  Director (2)(4)                                                  June 2002
John A. Allison....................  Deputy Managing Director                                         January 2001
Salim Chaar........................  Deputy Managing Director                                         September 2001
Mark A. Henderson..................  Deputy Managing Director                                         November 1998
Susan G. Leber.....................  Deputy Managing Director - Financial Operations                  March 2003
Rocco Macri........................  Deputy Managing Director - Chief Financial Officer               September 2001
Peter Jan P. Rubingh...............  Deputy Managing Director                                         January 2001
Frederick M. Ryan..................  Deputy Managing Director - Investor Relations                    September 2001
Charles G.R. Target................  Deputy Managing Director - International Development             June 1999
Debra Randall......................  Corporate Secretary                                              January 2001
</TABLE>

--------------------------

(1)      Denotes member of the Executive Committee of the board of directors.
(2)      Denotes member of the Compensation Committee of the board of directors.
(3)      Denotes member of the Audit Committee of the board of directors.
(4)      Denotes member of the Nominating and Corporate Governance Committee of
         the board of directors.

         WILLIAM P. STEWART is Chairman, Chief Executive Officer and a Director
of W.P. Stewart & Co., Ltd. Mr. Stewart started on Wall Street in 1955 on the
trading floor of the New York Stock Exchange. He joined Spingarn, Heine & Co. in
1957 as an analyst/registered representative and, in 1961, moved to Pyne,
Kendall & Hollister in the same capacity. He was successively Director of
Research, General Partner responsible for the firm's investment advisory and
institutional operations, President of its international investment banking
subsidiary, Managing Partner and Chairman and Chief Executive Officer of Riter,
Pyne, Kendall & Hollister, Inc. After the sale of Riter, Pyne's principal
business in early 1973, Mr. Stewart joined Ruane, Cunniff & Co., an investment
management firm, as Vice Chairman, while simultaneously founding our U.S.
predecessor company as a corporate consultant. He established our U.S.
predecessor company as an investment advisory firm in 1975.

                                       35
<PAGE>

         JOHN C. RUSSELL serves as Deputy Chairman, Managing Director and a
Director of W.P. Stewart & Co., Ltd. He joined the Stewart Group in 1996 as
General Counsel, relinquishing that position after becoming the firm's Chief
Operating Officer in April 1997. From 1992 to 1996, Mr. Russell was a partner in
the law firm of Kroll & Tract. From 1987 through 1992, Mr. Russell served as
President and Chief Executive Officer of the Ohio Brass Company, a manufacturing
company, and OB Systems and Mining, Inc., another manufacturing company. From
1980 to 1987, he served as President and Chief Executive Officer of Naarden
International, Inc., an international fragrance and flavor company. In 1970, Mr.
Russell was a founding partner of the law firm Anderson Russell Kill & Olick.
Mr. Russell has more than 40 years of experience in domestic and international
corporate and securities law.

         DOMINIK M. F. BRUNNER has served as a director of W. P. Stewart & Co.,
Ltd. since May 2004. Mr. Brunner is currently the Principal of First Capital
Investments Ltd., a private company he founded in 1997, providing
investment-banking services to European mid-sized enterprises. Also, in 1997,
Mr. Brunner founded and operated Dominik Brunner - Servicos Financeiros, LDA
("DBSF"). DBSF provided financial consulting in Portugal and acted as a
representative of Clariden Bank, a Credit Suisse Group company. The operations
of DBSF were sold to Clariden Bank AG at the end of 2003. From 1993 to 1997 Mr.
Brunner was the Co- Managing Partner of Espirito Santo Development Capital
Investors. Ltd., a $100 million private equity fund, sponsored by the Espirito
Santo Group of Portugal and whose investors included financial institutions from
Europe, the Middle East and the United States. Previously, Mr. Brunner was
involved in the European chemicals industry and the international trading
industry as an executive and management board member of several companies.

         ANGUS S. KING, JR. became a Director of W.P. Stewart & Co., Ltd. in
February 2004. Mr. King is currently Of Counsel to the law firm of Bernstein,
Shur, Sawyer and Nelson and is affiliated with Leaders, LLC, a mergers and
acquisitions firm, both groups being headquartered in Portland, Maine. Mr. King
is also a Distinguished Lecturer at Bowdoin College in Brunswick, Maine. Mr.
King served as the Governor of the State of Maine from 1995 to 2003. He was
first elected as an independent in 1994 and was re-elected in 1998. Prior to
this, Mr. King was in the private practice of law from 1975 until 1983 with the
firm Smith, Loyd and King in Brunswick, Maine. From 1976 until 1993 Mr. King
hosted and co-produced a variety of public affairs programming on Maine PBS
stations. He was employed for six years as the Vice President and Chief Counsel
in Portland, Maine for the Swift River-Hafslund Company. From 1989 to 1994 he
served as the President of Northeast Energy Management, Inc., a company that he
founded.

         HENRY B. SMITH has been a Director of W.P. Stewart & Co., Ltd. since
June 1998. Until its acquisition by HSBC Holdings PLC in February 2004, Mr.
Smith was Chief Executive Officer and a Director of The Bank of Bermuda, with
which he has been employed in various capacities since 1973. From February 2004
until January 1, 2005, he held the position of Executive Director of The Bank of
Bermuda, with oversight responsibility for the integration of the Bank's
businesses into the HSBC group.

         HEINRICH SPANGLER has served as a Director of W.P. Stewart & Co., Ltd.
since June 1998. For the last 24 years, Mr. Spangler has served in various
capacities, including managing partner, and presently serves as Spokesman of the
Board of Management and Chief Executive Officer of Bankhaus Carl Spangler & Co.
AG, the oldest private bank in Austria. Mr. Spangler also serves as Chairman of
the Supervisory Board of Carl Spangler Kapitalanlageges. m.b.H., a private
investment company located in Salzburg, Austria.



                                       36
<PAGE>

         JAN J. SPIERING, F.C.A. became a Director of W.P. Stewart & Co., Ltd.
in September 2004. Mr. Spiering is a Fellow of the Institute of Chartered
Accountants in England and Wales and is the retired Managing Partner and
Chairman of Ernst & Young Bermuda, a firm which he joined in 1979. Previous to
Ernst & Young, he was employed by Robson Rhodes, a United Kingdom firm of
Chartered Accountants with whom he qualified. Additionally, Mr. Spiering has
served as a director of numerous companies and in particular within the
investment industry. Currently he is President and a director of several
privately held investment companies. He has served on various public boards and
committees including Deputy Chairman of Bermuda International Business
Association, Chairman of Bermuda's International Business Association Mutual
Funds, Chairman of the Board of Governors of the Bermuda College and is
currently Chairman of Bermuda's International Business Forum to which he was
appointed in 1995.

         RICHARD D. SPURLING has been a Director of W.P. Stewart & Co., Ltd.
since June 2002. Mr. Spurling is Senior Partner at Appleby Spurling Hunter
(formerly Appleby, Spurling & Kempe), an international law firm with offices in
Bermuda, the Cayman Islands, London (UK) and Hong Kong, where he has practiced
since 1977. Mr. Spurling recently announced his retirement from Appleby Spurling
Hunter effective as of March 31, 2005. Mr. Spurling obtained his English Bar
qualification in 1975 and was called to the English Bar in November 1976
following pupilage at Law Chambers in London. He was called to the Bermuda Bar
in 1977. Mr. Spurling also serves as a director of Belco Holdings Limited,
Bermuda Electric Light Company Limited, BF&M Life Insurance Company Limited,
BF&M Limited and Bermuda Press (Holdings) Ltd. in Bermuda and a Trustee of the
Bermuda Biological Station for Research, Inc. Mr. Spurling was an elected Member
of the Bermuda Parliament for five years and served as the Government Whip.

         JOHN A. ALLISON has been with W.P. Stewart since 1995 and became Deputy
Managing Director in January 2001. Mr. Allison serves as a member of the Stewart
Group's Management Committee. He began his professional career in 1973 as an
analyst of global economic trends for the Canadian government. From 1978 to
1983, he lectured in Western Intellectual and Economic History at Columbia
University. He joined Morgan Stanley Asset Management in 1983 where, as a Vice
President and senior portfolio manager/analyst, he managed large institutional
growth stock portfolios for major foreign and domestic clients. In 1989, Mr.
Allison joined Auchincloss & Lawrence Inc., where he became the firm's Chief
Executive and Investment Officer and its majority shareholder. Mr. Allison
combined his business with W.P. Stewart & Co., Inc. in November 1995.

         SALIM CHAAR has served as Deputy Managing Director of W.P. Stewart &
Co., Ltd. since January 2004 and as Deputy Managing Director - Administration
since September 2001. He joined W.P. Stewart from Bowen Capital Management, the
company's Hong Kong-based research and sub-advisory affiliate, where he served
as its Managing Director, and a member of the board of directors of its parent
company, Bowen Asia Limited, from March 2000 until October 2004. Mr. Chaar began
his career with Banque Indosuez in Paris in 1976, and worked in various
management capacities for Indosuez in the Middle East and in Asia until 1993,
including Chief Operating Officer and then Managing Director of Indosuez
Investment Services in Hong Kong from 1988 to 1992. Mr. Chaar was based in Paris
from 1993 to 1997, as President and Chief Operating Officer of Union Financiere
de France Banque, an asset management, brokerage and insurance subsidiary of
Indosuez listed on the French stock exchange. He left Banque Indosuez in 1997,
and joined the Belgian group Generale de Banque, where he was appointed Chief
Executive Officer of Grand Generale Asset Management Ltd.

         MARK A. HENDERSON has served as Deputy Managing Director of W.P.
Stewart & Co., Ltd. since November 1998. Mr. Henderson began his career in New
York with Rheem International, Inc., a steel manufacturer and subsidiary of City
Investing Corp. He was seconded by Rheem to South Africa between 1969 and 1973
to establish their South African subsidiary. In 1974 he joined Panmure Gordon &
Co., a financial adviser, brokerage concern and member of the London Stock
Exchange. He became an individual member of the London Stock Exchange in 1979
and a partner of Panmure Gordon & Co. in 1981. Panmure Gordon & Co. was acquired
by NationsBank Corp. in 1986. In that year he became a Director of NationsBank
(Europe) Ltd. and a member of the Executive Committee of Panmure Gordon & Co.,
Ltd. He was responsible for the international expansion of the firm's business
which included the establishment of an office in New York. He is currently a
member of The Securities Institute in London.



                                       37
<PAGE>

         SUSAN G. LEBER has served as Deputy Managing Director - Financial
Operations since March 2003, as Director of Financial Operations since December
2001 and as Deputy Finance Director-Group Controller since March 1999. Ms. Leber
is a Certified Public Accountant. From 1993 to 1999 she was a Senior Manager
with the accounting firm of Lopez Edwards Frank & Co., LLP, and was manager of
the Stewart Group audit.

         ROCCO MACRI has served as Deputy Managing Director - Chief Financial
Officer of W.P. Stewart & Co., Ltd. since September 2001 and as Finance Director
since March 1999. Mr. Macri is a Certified Public Accountant. From 1993 through
1999, he was a Partner with the accounting firm of Lopez Edwards Frank & Co.,
LLP, where he was a Manager from 1984 through 1993. From 1984 through 1998, Mr.
Macri had principal responsibility for our audit while a partner at our previous
independent accounting firm.

         PETER JAN P. RUBINGH became Deputy Managing Director of W.P. Stewart
and Co., Ltd. in January 2001. He is a co-founder and Managing Director of TPR &
Partners N.V. (now W.P. Stewart Asset Management (Europe), N.V.), an
Amsterdam-based business which has concentrated on gathering assets and
servicing clients for W.P. Stewart since TPR's inception in 1993. Mr. Rubingh
began his career at Moret & Limperg (now Ernst & Young), Amsterdam, in 1978 as
an Assistant Accountant within the audit team. He joined Noro Nederland B.V.
(The Noro Group of Companies), a fund management group, in 1979 and served in
various capacities within the group, including Group Controller, Assistant
Managing Director, Management Team Member and Portfolio Manager (Venture
Capital) in The Netherlands, the United States and the Netherlands Antilles.
While at Noro, Mr. Rubingh also served as a non-executive member of the
Supervisory Boards of HomeBanc in Atlanta, Georgia and ICON International in New
York City.

         FREDERICK M. RYAN has served as Deputy Managing Director - Investor
Relations of W.P. Stewart & Co., Ltd. since September 2001. Mr. Ryan served as
Deputy Managing Director from February 1999 through August 2001 and as Deputy
Managing Director - Europe from October 1998 through January 1999. Prior to
that, Mr. Ryan was a consultant with FMR Capital Advisory, financial and
business consultants. From 1991 through 1997, he was president of Canada Life
Investment Management. Mr. Ryan worked with the investment and business
consulting group of FMR & Associates from 1982 through 1991. From 1969 through
1982, Mr. Ryan was a shareholder, officer and Director of R.A. Daly & Co., Ltd.,
a brokerage firm and a former member firm of the Toronto Stock Exchange. Mr.
Ryan has been a member of the Association for Investment Management & Research
since 1967 and served as president of the Toronto Society of Financial Analysts
(a constituent member society of the Association for Investment Management &
Research) in 1976-1977.

         CHARLES G.R. TARGET has served as Deputy Managing Director -
International Development of W.P. Stewart & Co., Ltd. since June 1999. Mr.
Target is an Executive Director of our Asian affiliate, Bowen Asia Limited.
Prior to the founding of Bowen, Mr. Target was a general partner and director of
Alan Patricof Associates, the London-based international venture capital
company. Before joining Patricof in 1988, Mr. Target served as Managing Director
of Business International Asia/Pacific Ltd., an economic research and consulting
company owned by the Economist Group, where he was responsible for the Asian
regional operations of the company.



                                       38
<PAGE>

         DEBRA RANDALL has served as Corporate Secretary of W.P. Stewart & Co.,
Ltd. since January 2001. Ms. Randall, a graduate of the Institute of Chartered
Secretaries and Administrators, has more than 13 years' experience in the legal
and corporate services sector.

         Charles Target is the son-in-law of William P. Stewart. There are no
other family relationships between any directors and executive officers.

         B.  COMPENSATION

         The aggregate compensation paid or accrued in 2004 by W.P. Stewart &
Co., Ltd. to individuals serving as directors and executive officers during that
year, including bonuses and compensation payable pursuant to employee benefit
plans, was $6.9 million. In addition, during 2004 certain directors were issued
an aggregate of 20,000 common shares as compensation for their services, and
executive officers were issued an aggregate of 45,000 common shares as part of
their non-cash incentive compensation granted during the year. All of such share
issuances were in the form of restricted share grants pursuant to which the
shares vest in four equal installments on the first, second, third and fourth
anniversaries of the date of grant. In addition, there are certain restrictions
on transfer until the fourth anniversary of the date of grant.

         We sponsor both a defined contribution profit-sharing plan (including a
401(k) feature) and a defined contribution money-purchase plan in the United
States. We also sponsor similar defined contribution retirement plans in both
Bermuda and the United Kingdom. These plans cover substantially all employees
who meet the minimum age, service and eligibility requirements. The aggregate
amount paid, set aside or accrued by W.P. Stewart & Co., Ltd. in 2004 to provide
pension, retirement or other employee benefits to individuals serving as
directors and executive officers during that year was $218,009.

         W.P. Stewart & Co., Ltd. has agreed to pay each of its "non-executive
directors" (currently Messrs. Brunner, King, Smith, Spangler, Spiering and
Spurling) $20,000 per annum for his services on the board of directors. Prior to
May 2004, we also paid to the Chairman of the Audit Committee an additional
$10,000 per annum and each other member of the Audit Committee received an
additional fee of $5,000 per annum. Subsequent to May 2004, we agreed to pay
each non-executive director $10,000 per annum for each committee on which such
director served in addition to the $20,000 annual fee for services on the board
of directors. As of March 2005, in addition to such fees, the Chairman of the
Audit Committee and named financial expert (currently Mr. Spiering) will receive
$30,000 per annum.

         C.  BOARD PRACTICES

         The terms of office of our directors and officers will run until the
election of successor directors (or until the shareholders resolve in a general
meeting not to re-appoint a director) or the appointment of successor officers.

         Executive Committee. The Executive Committee of the board of directors
is composed of Messrs. Russell, Smith and Stewart. The Executive Committee has
the power and authority to manage the affairs of the company on behalf of the
board of directors when it is not in session, consistent with the expressed
desires of the board of directors. The Executive Committee maintains a record of
any and all actions it takes and notifies the board of directors after it takes
any such action. The agenda for each regular quarterly meeting of the board of
directors includes discussion and ratification of actions that have been taken
by the Executive Committee since the previous regular quarterly board meeting.

         Compensation Committee. The Compensation Committee of the board of
directors is composed of Messrs. King, Spangler and Spurling. The Compensation
Committee is responsible for, among other things, making recommendations to the
board of directors as to our compensation philosophy; overseeing the development
of compensation programs; evaluating the performance of senior management and
determining compensation levels for senior management; making recommendations to
the board of directors concerning non-senior management compensation, incentive
compensation plans and equity-based plans; and overseeing implementation of, and
compliance with, incentive compensation plans and equity based plans.



                                       39
<PAGE>

         Audit Committee. The Audit Committee of the board of directors is
composed of Messrs. Brunner, Spangler and Spiering. Mr. Smith served as a member
of the Audit Committee until February 2005. The Audit Committee is responsible
for, among other things, reviewing the structure of our internal controls,
including internal audit; the annual appointment of the external auditors,
including the approval of audit engagement fees and terms; considering the
independence of the external auditor; approving audit and non-audit engagements
with the external auditor; reviewing the annual audit plan; reviewing our
audited and unaudited financial statements; reviewing disclosures made in
connection with certifications provided by management for our annual report on
Form 20-F; reviewing compliance with regulatory requirements; reviewing
compliance with polices and practices involving ethics, conflicts and other such
matters; establishing procedures for submission and treatment of complaints
regarding accounting, internal controls and auditing matters; and reviewing the
above activities of subsidiary companies. The Audit Committee meets and reports
to the board of directors no less than once per quarter.

         Nominating and Corporate Governance Committee. The Nominating and
Corporate Governance Committee of the board of directors is composed of Messrs.
King, Spangler and Spurling. This committee is responsible for, among other
things, recommending to the board of directors the desirable size of the board
or any committee thereof; developing criteria for board members and evaluating
potential candidates against such criteria; reviewing and responding to
nominations for board membership; identifying and recommending to the board
candidates for board membership; developing and recommending to the board a set
of corporate governance principles; monitoring compliance with our corporate
governance principles and code of ethics; developing and recommending to the
board standards in determining whether a board member is independent; and
establishing procedures to oversee the annual evaluation of the board and
management.

         We have not entered into any contracts with directors for benefits upon
termination of service.

         Our Board of Directors has adopted Corporate Governance Guidelines as
well as charters for the Audit Committee, Compensation Committee and Nominating
and Corporate Governance Committee which comply with the corporate governance
rules of the New York Stock Exchange. A copy of the Corporate Governance
Guidelines and each of these charters is available on our website at
www.wpstewart.com. A copy of such documents will also be made available to our
shareholders upon request by contacting our Deputy Managing Director--Investor
Relations by phone at (441) 295-8585, by fax at (441) 296-8357 or by e-mail at
IRINFO@wpstewart.com.

         Our Board of Directors, upon the recommendation of the Nominating and
Corporate Governance Committee, adopted standards for determining the
independence of directors. These standards, which comply with the corporate
governance rules of the New York Stock Exchange, require, among other things,
the absence of the following characteristics for a director to be deemed
independent: employment by the director or his/her immediate family member;
compensation (other than as a director) from us to the director or his/her
immediate family member; affiliation with our auditor; interlocking compensation
committee with another entity with which the director or his/her immediate
family member is an executive officer; a material financial relationship with an
entity of which the director or his/her immediate family member is a director or
employee. The Board of Directors has determined that in 2004 each of its current
non-management directors (Messrs. Brunner, King, Smith, Spangler, Spiering and
Spurling) qualified as independent under the standards adopted.



                                       40
<PAGE>

         D.  EMPLOYEES

         At December 31, 2002, 2003 and 2004, we employed 105, 110 and 106
persons, respectively. We consider our relations with our employees to be good.

         E.  SHARE OWNERSHIP

         The following table presents information regarding the beneficial
ownership of our common shares by our directors and executive officers:

<TABLE>
<CAPTION>

                                                          NUMBER OF COMMON
                           NAME                             SHARES OWNED                PERCENTAGE
         ------------------------------------------    ------------------------       ----------------
<S>                                                         <C>                            <C>
         William P. Stewart (1)                             4,182,711                      9.05%

         John C. Russell (2)                                  463,396                      1.00%

         John A. Allison (3)                                  517,798                      1.12%

         Peter Jan P. Rubingh (4)                             730,419                      1.58%

         All other Directors and Executive
         Officers as a group (5)                              547,937                        *
</TABLE>

    * Each individual's ownership is less than 1%.

(1)      Includes 4,144,140 shares owned by trusts for which Mr. Stewart serves
         as trustee (with respect to which Mr. Stewart disclaims beneficial
         ownership) and 8,571 shares that may be purchased upon exercise of
         currently exercisable options.

(2)      Includes 125,000 shares held by a trust (with respect to which Mr.
         Russell disclaims beneficial ownership) and 4,286 shares that may be
         purchased upon exercise of currently exercisable options.

(3)      Includes 8,571 shares that may be purchased upon exercise of currently
         exercisable options.

(4)      Includes 80,000 shares which are owned by two trusts established for
         Mr. Rubingh's children, for which Mr. Rubingh is the trustee.

(5)      Includes 35,144 shares that may be purchased upon exercise of currently
         exercisable options.

         Our directors and executive officers currently own options to purchase
an aggregate of 291,560 of our common shares. Each option vests in equal
portions on the first seven anniversaries of the grant date. 239,277 of these
options were granted on October 24, 2001 at an exercise price of $20.80 per
share and will expire on October 24, 2008. An additional 38,570, 5,142 and 8,571
of these options were granted on May 1, 2002, August 20, 2002 and October 3,
2002 at exercise prices of $28.42, $22.10 and $16.58, respectively, for an
aggregate of 52,283 options. These options will expire on May 1, 2009, August
20, 2009 and October 3, 2009, respectively.

         W.P. Stewart & Co., Ltd. historically had periodically sold common
shares to its employees and those of its affiliates at fair value for cash
and/or installment notes. These installment notes are full recourse, bear
interest at 8.5% or 10% per annum and are collateralized by the shares
purchased. The principal amount of each note is payable in 28 quarterly
installments, subject to mandatory payment in full upon termination of
employment. Shares vest in 28 equal quarterly installments. Unvested shares are,
and vested shares may be, repurchased from the employee upon termination.
Different, but substantially equivalent, terms applied in respect of individuals
employed in certain countries outside Bermuda and the United States.



                                       41
<PAGE>


         W.P. Stewart & Co., Ltd. 2001 Employee Equity Incentive Plan, as
amended

         In 2001, we adopted the W.P. Stewart & Co., Ltd. 2001 Employee Equity
Incentive Plan, a share option and restricted share plan, to promote the
interests of W.P. Stewart & Co., Ltd. and its shareholders by aiding us and our
affiliates in attracting and retaining employees and directors capable of
assuring our future success, by offering such persons incentives to put forth
maximum efforts for the success of our business, and by affording such persons
an opportunity to acquire a proprietary interest in our Company. The plan
continued in effect until July 23, 2004, as of which dated the plan expired and
no further awards will be granted. Awards granted prior to the termination date
extend beyond the termination of the plan, and the authority of management and
our Compensation and Executive Committees to administer the plan and our board
of directors to amend it, extend beyond the termination of the plan.

         The plan is administered by our management, subject to oversight by the
Compensation and Executive Committees of our board of directors. Subject to
review and approval by the committee, as appropriate, management continues after
termination of the plan to have the authority to:

         o        subject to certain conditions, amend the terms and conditions
                  of any award or award agreement and accelerate the
                  exercisability of any award or the lapse of restrictions
                  relating to any award;

         o        determine whether, to what extent and under what circumstances
                  awards may be exercised with the payment of cash, shares,
                  other securities, other awards or other property, or canceled,
                  forfeited or suspended;

         o        determine whether, to what extent and under what circumstances
                  cash, shares, other securities, other awards, other property
                  and other amounts payable by W.P. Stewart & Co., Ltd. with
                  respect to an award under the plan shall be deferred either
                  automatically or at the election of the holder thereof or the
                  committee;

         o        interpret and administer the plan and any instrument or
                  agreement, including any award agreement, relating to the
                  plan;

         o        establish, amend, suspend or waive such rules and regulations
                  and appoint such agents as it shall deem appropriate for the
                  proper administration of the plan; and

         o        make any other determination and take any other action that
                  the committee deems necessary or desirable for the
                  administration of the plan.

         Subject to limited exceptions permitted by the committee, awards may
not be transferred other than by will or by the laws of descent and
distribution. Except as otherwise provided in the plan, no award or right under
an award may be pledged, alienated, attached or otherwise encumbered, and any
attempt to pledge, alienate, attach or encumber an award will be void and
unenforceable against us or any of our affiliates.

         The committee may waive any conditions of or our rights under any
outstanding award, prospectively or retroactively. Except as otherwise provided
in the plan or an award agreement, unless we or the committee obtains consent
from the participant, holder or beneficiary of the award, the committee may not
amend, alter, suspend, discontinue or terminate any outstanding award
prospectively or retroactively.

         If the committee determines that any event affecting the shares would
result in the dilution or enlargement of any of the benefits or potential
benefits intended to be made available under the plan, the committee will, in a
manner it deems equitable, adjust any or all of:



                                       42
<PAGE>

         o        the number and type of shares (or other securities or other
                  property) subject to outstanding awards; and

         o        the purchase or exercise price with respect to any award.

         All awards under the plan are evidenced by appropriate agreements
executed on our behalf and by the participants. Awards generally vest over a
seven-year period. The exercise price of a share option is not less than the New
York Stock Exchange closing price of our common shares on the date of grant.
Restricted shares were purchased at a discount of up to 20% from the New York
Stock Exchange closing price value.

ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

         A.  MAJOR SHAREHOLDERS

         The following table presents information regarding the beneficial
ownership of our common shares as of February 28, 2005 by persons or groups of
affiliated persons known to us to own more than 5% of our common shares. See
also Item 6 E above under the caption "Directors, Senior Management and
Employees - Share Ownership."

         NAME                    NUMBER                     PERCENTAGE
         ---------------    ----------------------    ------------------------
         WPS II, Inc.          19,530,557                       42.3%


         The above-listed beneficial owner has the same voting rights per share
as all other holders of common shares; however, our bye-laws specifically exempt
such holder from the limitations on voting power that may apply to other holders
if they become owners of more than a specified percentage of common shares. See
Item 3 D under the caption "Key Information - Risk Factors - Our bye-laws
restrict shareholders' voting rights."

         As of February 28, 2005, we had 178 shareholders of record, of which
134, owning approximately 98% of our common shares, were U.S. persons.

         B.  RELATED PARTY TRANSACTIONS

         In connection with purchases of shares of W.P. Stewart & Co., Ltd. and
its predecessors, since at least 1991, our employees, including our executive
officers, and our directors have entered into loan agreements with, and signed
promissory notes to, us in respect of some or all of the purchase price of such
shares. Most of our employees are or have been parties to such loans. In
connection with such share purchases, Messrs. Russell and Target and Ms. Leber
have outstanding loans pursuant to loan agreements with, and signed promissory
notes to, the Stewart Group. Each of these loans accrues interest at a rate of
either 8.5% or 10% per annum. Pursuant to Section 402 of the Sarbanes-Oxley Act
of 2002, there have been no material changes to these loans nor have there been
any new loans made subsequent to July 30, 2002 to any directors or executive
officers.

         The table set forth below provides the details with respect to the
aggregate amount outstanding under these loan agreements and promissory notes as
of December 31, 2004 and the largest aggregate amount of indebtedness
outstanding under each of these loan agreements and promissory notes during the
year ended December 31, 2004 for each of the above-named directors and executive
officers.


                                       43
<PAGE>

                                                              LARGEST AMOUNT
                                                            OUTSTANDING DURING
                                AMOUNT OUTSTANDING            THE YEAR ENDED
              NAME            AS OF DECEMBER 31, 2004       DECEMBER 31, 2004
-------------------------   ---------------------------   ----------------------

John C. Russell                      $  294,185                  $  394,816

Salim Chaar                                   0                     608,929

Mark A. Henderson                             0                     448,000

Rocco Macri                                   0                     555,191

Frederick M. Ryan                             0                     433,409

Charles G.R. Target                      57,337                      86,006

Susan G. Leber                          122,768                     338,488

         The lease agreement relating to W.P. Stewart & Co., Inc.'s office space
in New York covers space utilized by Stewart family interests that reimburse
W.P. Stewart & Co., Inc., on a monthly basis, for that portion of the rental and
other costs associated with the space so utilized. Such lease-related amount was
$175,187 for the year ended December 31, 2004. We believe that the reimbursement
amounts that we receive from the Stewart family interests for the utilization of
this space are as favorable as the amounts we could receive from an unaffiliated
party for utilization of the same space.

         W.P. Stewart & Co., Ltd. owns approximately 40% of Bowen Asia Limited.
Ms. Lisa M. Stewart, the daughter of Mr. William P. Stewart, and Mr. Charles
G.R. Target, Ms. Stewart's husband and a Deputy Managing Director of W.P.
Stewart & Co., Ltd., together own a majority of the stock of Bowen Asia Limited.
We have been granted an option exercisable from June 2004 until June 2009 to
expand our ownership of Bowen Asia Limited to a majority interest. In addition
to our investment in Bowen Asia Limited, we pay solicitation, sub-advisory and
research fees to Bowen Asia Limited. Such fees were, in the aggregate,
$1,227,329 for the year ended December 31, 2004. We believe that the
solicitation, sub-advisory and research fees that we pay to Bowen Asia Limited
are as favorable as the fees we would pay to an unaffiliated party for similar
services. We have entered into an agreement with Bowen Capital Management, a
subsidiary of Bowen Asia Limited, which entitles us to receive solicitation fees
for client referrals to Bowen Capital Management. Total solicitation fees
received under the terms of this agreement were $6,098 for the year ended
December 31, 2004. In addition, we entered into a joint venture arrangement with
Bowen Asia Limited pursuant to which each of us and Bowen owns 50% of Stewart
Bowen Japan Ltd., the parent of W.P. Stewart Japan K.K. W.P. Stewart Japan K.K.
provides client servicing and asset gathering activities. As of December 31,
2004, our investment in Stewart Bowen Japan Ltd. totaled $158,577.

         Since April 30, 1999, we have used an aircraft owned by Shamrock
Aviation, Inc. and have compensated Shamrock Aviation, Inc. for its use by
paying charter fees that we believe are more favorable to the Stewart Group than
the fees that would be paid to an unaffiliated charterer. Shamrock Aviation,
Inc. is owned by Mr. William P. Stewart and trusts for the benefit of his four
adult children. Mr. Stewart serves as President, and Mr. Gregory S. Stewart, his
son, serves as Vice President, of Shamrock Aviation, Inc. Fees to Shamrock
Aviation, Inc., reflected in research and administration expenses, amounted to
$2,531,126 for the year ended December 31, 2004. We entered into agreements
pursuant to which Shamrock Aviation, Inc. or an entity affiliated with Shamrock
has agreed to provide operational and maintenance services at cost for a
Challenger aircraft owned by one of our subsidiaries. These costs, reflected in
research and administration expenses, include $2,569,082 for the year ended
December 31, 2004. We believe that the terms of this transaction are more
favorable to us than the terms that we could obtain from an unaffiliated party
in a comparable transaction.



                                       44
<PAGE>

         We pay to WPS Investissements S.A., a Swiss investment management firm,
solicitation fees in respect of certain accounts and an amount calculated on the
basis of a portion of the brokerage commissions paid by such fund and certain
accounts, as directed by those clients. Such payments amounted to $6,358 for the
year ended December 31, 2004. WPS Investissements S.A. is principally owned by
Mr. William P. Stewart III, a son of Mr. William P. Stewart. We believe that the
payments made to WPS Investissements S.A. are as favorable as those we would pay
to an unaffiliated party in a similar transaction.

         The Company pays Carl Spangler Kapitalanlageges. m.b.H., which is
controlled by Bankhaus Carl Spangler & Co. AG, the Chief Executive Officer of
which is Heinrich Spangler, one of our directors, fees for solicitation
services. These fees amounted to $625,617 for the year ended December 31, 2004.

         Certain directors of W.P. Stewart & Co., Ltd. serve as directors of
funds from which we have received investment advisory fees, fund management
fees, subscription fees and commissions. Such fees and commissions were
$20,752,325 for the year ended December 31, 2004. Included in such amount is a
performance fee we recognized in 2004 from W.P. Stewart Holdings N.V., our
mutual fund listed on Euronext Amsterdam. This performance fee totaled
$13,537,506 and is included in receivables from affiliates, net, at December 31,
2004.

         The Company owns a 40% interest in Kirk Management Ltd., a real estate
joint venture, incorporated in Bermuda. The remaining 60% interest is owned by
The Bank of Bermuda, of which one of our directors was Executive Director until
December 31, 2004. Included in receivables from affiliates, net, is a
subordinated loan of $212,526 and accrued interest on such loan in the amount of
$34,132 due from Kirk Management Ltd. The loan has no fixed repayment date. Kirk
Management Ltd. also owns and leases to W.P. Stewart & Co., Ltd. its Hamilton,
Bermuda headquarters. The lease expires in 2020 and calls for annual rent of
approximately $180,000.

         The Company leases its office space in The Netherlands from Duinzigt I,
a company owned by the former principals of TPR & Partners N.V., including one
of our Deputy Managing Directors. Total rent expense for the year ended December
31, 2004 was $194,552.

         Appleby Spurling Hunter, a law firm of which Richard D. Spurling, one
of our directors, is a partner, and its affiliate Appleby Corporate Services
provide legal and corporate administrative and secretarial services to the
Company. Fees for such services amounted to $43,679 for the year ended December
31, 2004.

         Included in investments available for sale at December 31, 2004 is an
amount of $895,423, which is an investment in a fund managed by W.P. Stewart
Fund Management Limited, an indirect wholly-owned subsidiary of W.P. Stewart &
Co., Ltd.

         Included in operating expenses for the year ended December 31, 2004 are
contributions in the amount of $411,000 paid to the W.P. Stewart & Co.
Foundation, Inc., a private charitable foundation.

         C.  INTERESTS OF EXPERTS AND COUNSEL

         Not Applicable.

ITEM 8.  FINANCIAL INFORMATION

         A.  CONSOLIDATED STATEMENT AND OTHER FINANCIAL INFORMATION

         See pages F-1 to F-24.



                                       45
<PAGE>

         We currently have no pending litigation of a material nature. We note,
however, that, in January 2004 Logicom Inclusive, Inc. filed a complaint against
us and certain of our employees relating to an alleged copyright infringement of
software programs. The total damages claimed were in excess of $3 million. Two
of the four claims were dismissed on a motion to dismiss in August 2004. We do
not believe that the remaining claims are merited, and we therefore do not
believe this claim will have a material adverse effect on our financial
condition or results of operations.

         The holders of our common shares are entitled to receive, on a pro rata
basis, dividends when, as and if declared by our board of directors. Dividends
may be paid only in accordance with the Companies Act 1981 of Bermuda, which
provides that dividends and other distributions to shareholders may not be paid
if there are reasonable grounds for believing that:

         o        W.P. Stewart & Co., Ltd. is, or would after the dividend
                  payment be, unable to pay its liabilities as they become due;
                  or

         o        the realizable value of W.P. Stewart & Co., Ltd.'s assets
                  after such payment would be less than the aggregate of its
                  liabilities and its issued share capital and share premium
                  accounts.

         W.P. Stewart & Co., Ltd.'s ability to declare dividends on the common
shares may also be limited by regulatory restrictions derived from the net
capital rules of various regulatory bodies applicable to W.P. Stewart & Co.,
Ltd. and its subsidiaries. Rights to dividends and distributions that have not
been claimed within six years after the date on which they were declared revert
to W.P. Stewart & Co., Ltd.

         We have a policy of declaring quarterly dividends on the common shares.
We expect that the amount of those dividends will be determined as approximately
$1.20 per annum. We paid a dividend of $0.30 per share in January 2005 and
currently anticipate similar dividends in April, July and October of this year.
However, the declaration and payment of dividends to holders of common shares is
in the discretion of the board of directors and depends on our capital
requirements, operating and financial condition and business plan at the time,
legal restrictions, regulatory restrictions and such other factors as the board
of directors may deem relevant.

         B.  SIGNIFICANT CHANGES

         Not Applicable

ITEM 9.  THE OFFER AND LISTING

         Not Applicable, except for Items 9.A.4 and 9.C.

         TRADING MARKETS

         Our common shares, par value US $0.001 per share, have traded on the
New York Stock Exchange under the symbol "WPL" since December 8, 2000 and have
been listed on the Bermuda Stock Exchange under the symbol "WPS" since December
11, 2000. Prior to December 8, 2000, there was no established market for our
common shares. On March 11, 2005, the last reported sale price for our common
shares on the New York Stock Exchange was $22.59 per share. As of that date
there had been no trading of our common shares on the Bermuda Stock Exchange.
Certain historical market price data is set forth below, with certain prices for
2000 and 2001 rounded to the nearest hundredth of a dollar.



                                       46
<PAGE>

                                                 NEW YORK STOCK EXCHANGE
                                            ----------------------------------
PERIOD                                           HIGH               LOW
----------------------------------------    ---------------    ---------------

Annual

         2000                                    $27.12            $22.69

         2001                                    $29.62            $18.01

         2002                                    $31.73            $14.35

         2003                                    $22.58            $14.94

         2004                                    $23.74            $18.70

Quarter

         First Quarter 2003                      $20.55            $14.94

         Second Quarter 2003                     $22.50            $16.69

         Third Quarter 2003                      $25.57            $18.91

         Fourth Quarter 2003                     $22.58            $20.05

         First Quarter 2004                      $23.55            $18.70

         Second Quarter 2004                     $20.67            $18.95

         Third Quarter 2004                      $20.75            $19.16

         Fourth Quarter 2004                     $23.74            $19.61


Month

         September 2004                          $20.09            $19.70

         October 2004                            $20.30            $19.61

         November 2004                           $22.59            $20.15

         December 2004                           $23.74            $20.85

         January 2005                            $25.75            $23.50

         February 2005                           $24.95            $22.30

         March 1 - 11, 2005                      $22.98            $22.25

ITEM 10. ADDITIONAL INFORMATION

         A.  SHARE CAPITAL

         Not Applicable.



                                       47
<PAGE>

         B.  MEMORANDUM AND ARTICLES OF ASSOCIATION

         ORGANIZATION AND REGISTER

         W.P. Stewart & Co., Ltd. is a company incorporated under the Companies
Act 1981 of Bermuda. It is registered in the Register maintained by the Bermuda
Registrar of Companies under the entry number "EC25146."

         OBJECTS AND PURPOSES

         Clause 6 of our Memorandum of Association states that W.P. Stewart &
Co., Ltd. was formed for the following objects:

         o        To carry on business as a holding company and to acquire and
                  hold shares, stocks, debenture stock, bonds, mortgages,
                  obligations and securities of any kind issued or guaranteed by
                  any company, corporation or undertaking of whatever nature and
                  wherever constituted or carrying on business, and shares,
                  stock, debentures, debenture stock, bonds, obligations and
                  other securities issued or guaranteed by any government,
                  sovereign ruler, commissioners, trust, local authority or
                  other public body, whether in Bermuda or elsewhere, and to
                  vary, transpose, dispose of or otherwise deal with from time
                  to time as may be considered expedient any of our investments
                  for the time being;

         o        To acquire any such shares and other securities as are
                  mentioned in the preceding paragraph by subscription,
                  syndicate participation, tender, purchase, exchange or
                  otherwise and to subscribe for the same, either conditionally
                  or otherwise, and to guarantee the subscription thereof and to
                  exercise and enforce all rights and powers conferred by or
                  incident to the ownership thereof;

         o        To co-ordinate the administration, policies, management,
                  supervision, control, research, planning, trading and any and
                  all other activities of any company or companies now or
                  hereafter incorporated or acquired which may be or may become
                  a company, wherever incorporated, which is or becomes a
                  holding company or a subsidiary of, or affiliated with, us
                  within the meanings respectively assigned to those terms in
                  the Companies Act 1981 or, with the prior written approval of
                  the Minister of Finance, any company or companies now or
                  hereafter incorporated or acquired with which we may be or may
                  become associated;

         o        To act as sponsors or representatives for any company, unit
                  trust, partnership or other entity seeking a listing of its
                  shares, units or other instruments on any stock exchange, and
                  to act as agent or representative of any company listed on any
                  stock exchange and to arrange and sponsor public and private
                  issues of shares and loan capital and to negotiate and
                  underwrite such issues;

         o        To act as agents for the sale and purchase of any stocks,
                  shares or securities, or for any other monetary or mercantile
                  transaction and as managers and investment advisers for any
                  company, partnership, public or private body, association,
                  individual or entity wherever incorporated, formed or based
                  outside Bermuda and, with the prior permission in writing of
                  the Minister of Finance for any person or any class or group
                  of persons incorporated, formed or based in Bermuda;

                                       48
<PAGE>


         o        To act as underwriters, sponsors and agents for any government
                  and other authority and, for any person and, with the prior
                  permission in writing of the Minister of Finance, any person
                  incorporated, formed or based in Bermuda;

         o        To provide financial services, advice and facilities of every
                  description, including (but without limiting the generality of
                  the foregoing words) all these capable of being provided by
                  stockholders, stockjobbers, promoters and managers of
                  investment vehicles, investment media, financial advisers,
                  underwriters and issuing houses to any person and, with the
                  prior permission in writing of the Minister of Finance, any
                  persons incorporated, formed or based in Bermuda;

         o        To invest the funds of or available to us in the share or loan
                  capital of any other company, partnership or other enterprise
                  wherever incorporated, formed or carrying on business, and in
                  the bonds or other obligations of any authority, undertaking
                  or corporation, whether public or private; and

         o        As set forth in paragraphs (b) to (n) and (p) to (u) inclusive
                  in the Second Schedule to the Companies Act 1981.

         DIRECTORS' INTERESTS

         Pursuant to the terms of clause 96 of our bye-laws, a director shall
not generally vote at a meeting of the board of directors or of a committee of
the board of directors on any resolution concerning a matter in which he has a
material interest unless such interest arises only because the situation falls
within one or more of the following:

         o        the resolution relates to our giving the director a guarantee,
                  security or indemnity in respect of a liability incurred by
                  him for our benefit;

         o        the resolution relates to our giving a third party a
                  guarantee, security or indemnity in respect of an obligation
                  of ours for which the director has assumed responsibility
                  under a guarantee or indemnity or by the giving a security;

         o        the director's interest arises in relation to the subscription
                  or purchase by him of our securities pursuant to a general
                  offer to our shareholders or to the public;

         o        the director's interest arises from being a participant in the
                  underwriting of any of our securities;

         o        the resolution relates to a proposal concerning another
                  corporation in which he holds less than 1% of the shares;

         o        the resolution relates to a retirement benefits scheme which
                  has been approved by the authorities of any country for tax
                  purposes;

         o        the resolution relates to any contract or arrangement for the
                  benefit of our employees and does not provide the director any
                  advantage or privilege not accorded to the employees; or

         o        any proposal concerning any insurance which we are empowered
                  to purchase for the benefit of any of our directors.


                                       49
<PAGE>

         The board of directors may exercise all the powers of the company to
borrow money and to mortgage or charge all or any part of our undertaking,
property and assets and to issue debentures and other securities, whether
outright or as collateral security for any debt, liability or obligation of ours
or of any other person.

         SHAREHOLDERS' RIGHTS

         The holders of our common shares are entitled to receive, on a pro rata
basis, dividends when, as and if declared by our board of directors. Dividends
may be paid only in accordance with the Companies Act 1981 of Bermuda which
provides that dividends and other distributions to shareholders may not be paid
if there are reasonable grounds for believing that:

         o        W.P. Stewart & Co., Ltd. is, or would after the dividend
                  payment be, unable to pay its liabilities as they become due;
                  or

         o        the realizable value of W.P. Stewart & Co., Ltd.'s assets
                  after such payment would be less than the aggregate of its
                  liabilities and its issued share capital and share premium
                  accounts.

         W.P. Stewart & Co., Ltd.'s ability to declare dividends on the common
shares may also be limited by regulatory restrictions derived from the net
capital rules of various regulatory bodies applicable to W.P. Stewart & Co.,
Ltd. and its subsidiaries. Rights to dividends and distributions that have not
been claimed within six years after the date on which they were declared revert
to W.P. Stewart & Co., Ltd.

         Subject to the provisions set forth below and any other special rights
or restrictions as to voting for the time being attached to any class of shares
by or in accordance with our bye-laws, at any general meeting on a poll vote,
every shareholder who is present in person or by proxy shall have one vote for
every common share of which such person is the holder. Most matters to be
approved by holders of common shares require approval by a simple majority vote
of the common shares represented at the shareholders' meeting. A resolution
passed by the holders of a majority of the issued common shares either in person
or by proxy at a general meeting is required to approve an amalgamation with
another company. Shareholders do not have cumulative voting rights. Shareholders
have the power to elect directors, appoint auditors and make changes in the
amount of authorized share capital of W.P. Stewart & Co., Ltd. The current
maximum number of directors is 10; however six directors were elected at the
most recent annual general meeting of shareholders and two additional directors
were appointed in 2004 subsequent to the annual general meeting to fill
vacancies. All directors are elected at each annual general meeting, except that
the board of directors may fill interim vacancies (including the vacancies
caused by the difference between the maximum and actual numbers of directors)
between general meetings.

         Our bye-laws limit the voting power of natural persons to a maximum of
5% of all votes attributable to our outstanding shares and the voting power of
entities and persons other than natural persons to a maximum of 9.5% of the
votes attributable to our outstanding shares. For these purposes, voting power
held by any person or entity is deemed to include power held or shared by that
person or entity as part of a "group" (as defined in the Securities Exchange Act
of 1934). These limitations apply regardless of how many common shares are
actually owned or controlled by a shareholder. These restrictions, however, will
not apply to:

         o        WPS II, Inc.;

         o        Other shareholders or groups of shareholders who were
                  shareholders of W.P. Stewart & Co., Ltd. immediately before
                  our initial public offering; and


                                       50
<PAGE>

         o        Additional persons, entities or groups that are designated by
                  our board of directors.

         The votes that could have been cast by shareholders who are subject to
these voting restrictions will be allocated to the other shareholders pro rata
based on the number of shares they hold. However, no shareholder subject to
these restrictions may be allocated additional voting rights to the extent that
the allocation would cause that shareholder to have more than 5% (for natural
persons) or 9.5% (for legal persons or entities) of the total voting power. This
voting limitation was put in place to reduce the likelihood of our becoming a
controlled foreign corporation for U.S. tax purposes. See Item 3 D under the
caption "Risk Factors - Our U.S. tax status could be challenged..." and Item 10
E under the caption "Taxation - United States - Controlled Foreign Corporation
Rules" for a discussion of the tax consequences associated with our becoming a
controlled foreign corporation.

         Our bye-laws also limit the overall voting power of all persons,
entities or groups to 20% of the total number of all votes attributable to our
outstanding shares (including the common shares). These limitations apply
regardless of how many common shares are actually owned or controlled by a
shareholder and regardless of whether the voting restrictions described in the
previous paragraph apply to that shareholder. These restrictions, however, will
not apply to:

         o        WPS II, Inc. or its affiliates;

         o        Direct or indirect subsidiaries of W.P. Stewart & Co., Ltd.;

         o        Any shareholding entity that may be established for the
                  purpose of our employee benefit plans and that is designated
                  by our board of directors; and

         o        Other persons, entities or groups that are designated by our
                  board of directors.

         If W.P. Stewart & Co., Ltd. is wound up, the liquidator may, with the
sanction of a resolution of shareholders, divide among the shareholders in kind
all or part of our assets and may, with that sanction, vest all or part of the
assets in trustees of trusts for the benefit of the shareholders in the
liquidator's discretion, provided that a shareholder may not be compelled to
accept any securities or other assets which would subject that shareholder to
liability.

         CHANGES IN SHAREHOLDERS' RIGHTS

         Any change in the rights relating to the common shares requires either
the adoption of a resolution by the holders of a majority of the common shares
at a duly held meeting of the common shareholders of W.P. Stewart & Co., Ltd. or
the written consent of the holders of not less than 75% of the common shares.

         GENERAL MEETINGS OF SHAREHOLDERS

         The annual general meeting of shareholders shall be held at such time
and place as the board of directors shall appoint. The board may convene special
general meetings of shareholders on its own initiative or when requisitioned by
shareholders in accordance with applicable Bermuda law. Under the Companies Act
1981 of Bermuda, the directors of the Company are required, on the request of
shareholders holding not less than 10% of the paid-up voting share capital of
the Company, to convene a special general meeting of the Company for the purpose
stated in the request.

         The quorum required for a meeting of shareholders is generally at least
two shareholders present in person or by proxy representing not less than
one-third in nominal value of the total issued common shares. Shareholders'
meetings are convened upon advance notice of at least 14 days.


                                       51
<PAGE>

         NO LIMITATION ON FOREIGN OWNERSHIP

         There are no limitations under Bermuda law or our memorandum of
association on the rights of persons who are not citizens or residents of
Bermuda, as such, to hold or vote our shares.

         CHANGE IN CONTROL

         There are no provisions in our memorandum of association or bye-laws
that would have the effect of delaying, deferring or preventing a change in
control of W.P. Stewart & Co., Ltd. and that would only operate with respect to
an amalgamation, acquisition or corporate restructuring involving it or any of
its subsidiaries.

         DISCLOSURE OF SHARE HOLDINGS

         Our bye-laws do not require shareholders to disclose their
shareholdings except to our board of directors.

         As an exempted company, W.P. Stewart & Co., Ltd. is exempted from
Bermuda laws which restrict the percentage of share capital that may be held by
non-Bermudians, but, as an exempted company, we may not, except with the express
authorization of the Bermuda legislature or under a license granted by the
Minister of Finance of Bermuda, participate in certain business transactions
including:

         o        the acquisition or holding of land in Bermuda (except as
                  required for our business and held by way of lease or tenancy
                  for terms of not more than 50 years or with the consent of the
                  Minister of Finance of Bermuda, as required to provide
                  accommodation or recreational facilities for our employees and
                  held by way of lease or tenancy for terms of not more than 21
                  years);

         o        the taking of mortgages on land in Bermuda to secure an amount
                  in excess of BD$50,000 without the consent of the Minister of
                  Finance of Bermuda;

         o        the acquisition of any bonds or debentures secured on any land
                  in Bermuda except bonds or debentures issued by the Bermuda
                  government or a public authority; or

         o        the carrying on of business of any kind in Bermuda other than
                  with persons outside Bermuda, except in certain limited
                  circumstances such as doing business with another exempted
                  company in furtherance of the business of W.P. Stewart & Co.,
                  Ltd. carried on outside Bermuda.

         C.  MATERIAL CONTRACTS

         Pursuant to an agreement to which we became party on October 30, 1998,
shareholders of W.P. Stewart & Co., Ltd. who currently own or control
approximately 20% of the outstanding common shares have certain demand and
piggyback registration rights with respect to their common shares. The demand
registration rights will only be available if a sufficient number of
shareholders with similar rights join in the request so that at least 15% of the
outstanding common shares are to be registered; and the offerings will be firm
commitment underwritten offerings.

         Pursuant to an agreement with Bowen Asia Limited and its shareholders,
dated as of June 30, 1999, W.P. Stewart & Co., Ltd., increased its total
investment in Bowen Asia Limited from 21.9% to 40%. The price of this increase
was $500,000 and 27,769 of our shares. We have the option (exercisable from June
30, 2004 to June 30, 2009) to purchase such number of shares of Bowen as would
increase our ownership to 50.1% of Bowen's issued and outstanding shares. If we
exercise this option, the Bowen shareholders will have the option to put their
remaining shares in Bowen to us. In either case the option price per share would
equal 15 times Bowen's trailing four quarters' after-tax earnings (or, if
greater, $10 million in the case of our purchase option), divided by the number
of outstanding Bowen shares. The agreement imposes limitations on any transfers
or issuances of Bowen shares. If there is a change of control of W.P. Stewart &
Co., Ltd., Bowen has the right to repurchase all Bowen shares then owned by W.P.
Stewart & Co., Ltd. Bowen and its shareholders have a right of first refusal in
the event we propose to sell any of our Bowen shares. The agreement also calls
for us to have representation on Bowen's board of directors.



                                       52
<PAGE>

         Pursuant to a share exchange agreement with TPR Holding B.V. dated as
of November 14, 2001, W.P. Stewart and Co., Ltd. exchanged 330,000 of its shares
for 75% of the outstanding shares of W.P. Stewart Asset Management (Europe),
Ltd., which in turn indirectly owns all of the shares of W.P. Stewart Asset
Management (Europe) N.V. (formerly TPR & Partners N.V.). The parties also
entered into a deferred share exchange agreement as of November 14, 2001
pursuant to which W.P. Stewart & Co., Ltd. agreed to acquire the remaining
shares of W.P. Stewart Asset Management (Europe), Ltd. as of June 30, 2006 at a
fair value price determined on that date and payable in shares of W.P. Stewart &
Co., Ltd.

         D.  EXCHANGE CONTROLS

         Because we have been designated as non-resident in Bermuda for exchange
control purposes, there are no restrictions on our ability to transfer funds in
and out of Bermuda or to pay dividends to non-Bermuda residents who are holders
of our shares, other than in local Bermuda currency.

         E.  TAXATION

         The following summary describes the principal tax consequences under
U.S. federal income tax law and the laws of Bermuda of the ownership and
disposition of the common shares. Except where otherwise noted, this summary
does not describe any tax consequences arising under the law of any State,
locality or taxing jurisdiction other than Bermuda or the U.S. federal
government. There is no income tax treaty between Bermuda and the United States.

         The discussion below is based upon the nature and conduct of our
business, which may change, and upon our understanding of our position under the
tax laws of the various countries in which we have assets or conduct activities,
which position is subject to review and possible challenge by taxing authorities
and to possible changes in law, which may have retroactive effect.

         BERMUDA

         We have obtained from the Minister of Finance of Bermuda under the
Exempted Undertakings Tax Protection Act 1966 (as amended), an undertaking that,
in the event that Bermuda enacts any legislation imposing tax computed on
profits, income, any capital asset, gain or appreciation, or any tax in the
nature of estate duty or inheritance tax, then the imposition of such tax will
not be applicable to the shares, debentures or other obligations of W.P. Stewart
& Co., Ltd., until at least March 28, 2016. Under current Bermuda law, no
income, withholding or other taxes or stamp or other duties are imposed upon the
issue, transfer or sale of the common shares or on any payments thereunder.

         UNITED STATES

         This summary is based on the Internal Revenue Code, Treasury
regulations and rulings promulgated thereunder and judicial decisions in effect
or available on the date of this Annual Report. All of the foregoing are subject
to change with or without retroactive effect, which could affect the continued
accuracy of this summary. No advance rulings have been or will be sought from
the IRS regarding the matters discussed in this Annual Report. Accordingly, you
are urged to consult your tax adviser to determine the U.S. federal, state,
local and foreign income and other tax consequences to you of acquiring, holding
and disposing of common shares.



                                       53
<PAGE>

         U.S. HOLDERS. As used in this section, the term "U.S. person" means for
U.S. federal income tax purposes:

         o        a citizen or resident of the United States or any political
                  subdivision thereof;

         o        a corporation or partnership created or organized in the
                  United States or under the laws of the United States or of any
                  State; or

         o        an estate or trust the income of which is subject to U.S.
                  federal income taxation regardless of its source.

         The term "U.S. holder" means a person, a holder or a beneficial owner
of common shares who is a U.S. person. A "non-U.S. holder" is any holder who is
not a U.S. holder.

         In general, U.S. holders will include dividends in income, in
accordance with their method of accounting, as ordinary income. Assuming the
common shares are held as a capital asset, gain or loss on a subsequent sale or
other taxable disposition of the stock will be a capital gain or loss, which
will be long-term if such stock is held for more than one year. At least a
portion of any dividend will constitute foreign source dividend income, which
may be relevant for a U.S. holder's foreign tax credit limit computation.

         PASSIVE FOREIGN INVESTMENT COMPANY RULES. W.P. Stewart & Co., Ltd.,
based on the nature of its assets and income, does not believe it should
currently be classified as a "passive foreign investment company" (as defined
below). However, it is possible, though W.P. Stewart & Co., Ltd. believes it
unlikely, that W.P. Stewart & Co., Ltd. could be classified as a passive foreign
investment company in the future.

         A foreign corporation will be treated as a passive foreign investment
company if either 75% or more of its gross income is "passive income" or at
least 50% of the average percentage of its assets are assets which produce or
are held for the production of "passive income" (hereinafter "passive assets").
"Passive income" is generally defined as any income included in the definition
of "foreign personal holding company income" under Section 954(c) of the
Internal Revenue Code. Among these items are income consisting of:

         o        dividends, interest, rent, royalties; and

         o        gains and losses from the sale of property giving rise to the
                  income described in the preceding item, as well as other types
                  of income not here relevant.

         For these purposes, cash held by a foreign corporation generally
constitutes a passive asset, but trade or service receivables resulting from a
business which produces non-passive income does not. Intangibles that produce
identifiable types of income (including goodwill) are similarly characterized in
terms of the type of income they produce. A foreign corporation owning at least
25% by value of the stock of another corporation is treated, for purposes of
passive foreign investment company classification, as if it held its
proportionate share of such corporate assets and received directly its
proportional share of such corporation's income.



                                       54
<PAGE>

         If a foreign corporation constitutes a passive foreign investment
company, any U.S. person holding any amount of stock in such corporation will
generally be subject to an interest charge on "excess distributions" of the
passive foreign investment company. Alternatively, such U.S. person may elect to
be taxed currently on its share of passive foreign investment company income by
being treated as receiving a distribution of its pro rata share of the passive
foreign investment company earnings and profits. A U.S. person may also make a
"mark-to-market" election with respect to "marketable" passive foreign
investment company stock to recognize (at the close of each taxable year) any
excess of the fair market value of such stock over its adjusted basis as
ordinary income and any excess of the adjusted basis of such stock over its fair
market value as ordinary loss.

         CONTROLLED FOREIGN CORPORATION RULES. Our bye-laws contain provisions
which attempt to prevent us from becoming a "controlled foreign corporation."
Specifically, the provisions restrict the voting rights associated with voting
shares in the case of any shareholder who acquires sufficient shares to become a
U.S. Shareholder (as defined below) if the effect of such acquisition would be
to cause us to become a controlled foreign corporation. In any event, the
controlled foreign corporation rules will not apply to a U.S. holder that never
owns 10% or more of the common shares.

         In general, a foreign corporation will constitute a controlled foreign
corporation if more than 50% of the shares of the corporation, measured by
reference to combined voting power or value, is held, directly or indirectly, by
"U.S. Shareholders." A "U.S. Shareholder", for this purpose, is any person that
is a U.S. person for U.S. federal income tax purposes that possesses 10% or more
of the combined voting power of all classes of shares of a corporation. Neither
W.P. Stewart & Co., Ltd. nor any of its foreign affiliates is a controlled
foreign corporation.

         If W.P. Stewart & Co., Ltd. (or any foreign affiliate) were in the
future to constitute a controlled foreign corporation, a U.S. Shareholder of
W.P. Stewart & Co., Ltd. would be treated, subject to certain exceptions, as
receiving a dividend at the end of our taxable year in an amount equal to that
person's pro rata share of the "subpart F income" and certain U.S. source income
of W.P. Stewart & Co., Ltd. (or any controlled foreign corporation foreign
affiliate), whether or not distributed. Among other items, and subject to
certain exceptions, "subpart F income" includes dividends, interest, annuities,
gains from the sale of shares and securities, certain gains from commodities
transactions, certain types of insurance income and income from certain
transactions with related parties. If W.P. Stewart & Co., Ltd. (or any foreign
affiliate) were in the future to constitute a controlled foreign corporation, we
believe only a relatively small portion of our income would be subpart F income.

         In addition, however, if a U.S. person owning 10% or more of the
combined voting power of all classes of stock entitled to vote of a controlled
foreign corporation sells or exchanges such stock, the gain recognized is
treated as ordinary dividend income (and not capital gain) to the extent of the
earnings and profits of such corporation accumulated after December 31, 1962 and
during the period(s) the stock was held by such U.S. person while such foreign
corporation was a controlled foreign corporation.

         If W.P. Stewart & Co., Ltd. were treated as a controlled foreign
corporation, a U.S. Shareholder of W.P. Stewart & Co., Ltd. would be taxable on
the subpart F income of W.P. Stewart & Co., Ltd. under rules described in the
preceding paragraph and not under the passive foreign investment company rules
previously described.

         BACKUP WITHHOLDING. A U.S. holder of common shares may, under certain
circumstances, be subject to "backup withholding" at the rate of 28% with
respect to dividends paid on the common shares or the proceeds of sale, exchange
or redemption of common shares unless such U.S. holder:

         o        is a corporation or comes within certain other exempt
                  categories, and, when required, demonstrates this fact; or



                                       55
<PAGE>

         o        provides a correct taxpayer identification number, certifies
                  that such holder is not subject to backup withholding and
                  otherwise complies with applicable requirements of the backup
                  withholding rules.

         Any amount withheld under these rules will be creditable against the
U.S. holder's U.S. federal income tax liability. A U.S. holder who does not
provide a correct taxpayer identification number may be subject to penalties
imposed by the IRS. Assuming proper shareholder information is provided, we
believe that back-up withholding will not be required.

         NON-U.S. HOLDERS. Dividends paid by foreign corporations are treated as
income from U.S. sources and subject to withholding at a rate of 30% if 25% or
more of the foreign corporation's gross income for the three-year period (or
such part of the period such corporation was in existence) ending with the close
of its taxable year preceding the declaration of such dividend was effectively
connected (or treated as effectively connected) with the conduct of a U.S. trade
or business, but only in an amount that bears the same ratio to the dividend as
the gross income which is effectively connected with a U.S. trade or business
bears to the foreign corporation's gross income from all sources. The Internal
Revenue Code provides, however, that if a foreign corporation is "subject to"
the branch profits tax, then the above-described withholding tax does not apply.

         Accordingly, because W.P. Stewart & Co., Ltd. and W.P. Stewart Asset
Management Ltd., if more than 25% of their gross income were deemed connected
with the United States, will be subject to the branch profits tax, we do not
believe that non-U.S. holders will be subject to the 30% withholding tax.

         Moreover, gains and losses on the sale or exchange of common shares
generally will not be subject to U.S. income or withholding tax unless:

         o        in the case of a non-U.S. holder who is an individual, such
                  non-U.S. holder is present in the United States for a period
                  or periods aggregating 183 days or more during the taxable
                  year of disposition (in which case such individual may be
                  taxed as a U.S. holder in any event); or

         o        any gain is effectively connected with the non-U.S. holder's
                  trade or business in the United States.

         The value of common shares should not be includible in the gross estate
of any individual non-U.S. holder for purposes of determining such non-U.S.
holder's liability, if any, for U.S. estate tax on non-resident alien
individuals.

         F.  DIVIDENDS AND PAYING AGENTS

         Not Applicable.

         G.  STATEMENTS BY EXPERTS

         Not Applicable.

         H.  DOCUMENTS ON DISPLAY

         You may read and copy any documents filed by W.P. Stewart & Co., Ltd.
at the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for further information about the
public reference room. You may also access our filings electronically at
www.sec.gov. Our filings with the SEC are also available to the public through
the New York Stock Exchange, 20 Broad Street, New York, New York 10005, on which
the common shares are listed.



                                       56
<PAGE>

         I.  SUBSIDIARY INFORMATION

         Not Applicable

ITEM 11. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

          The following discusses our exposure to market risk related to foreign
currency exchange rates, interest rates and equity prices. We do not utilize or
hold derivative financial instruments to hedge against such risks.

FOREIGN CURRENCY EXCHANGE RATE RISK

         Although we have significant foreign-based operations, the majority of
our transactions are denominated in U.S. dollars. We do, however, have various
operations where transactions are denominated in foreign currencies and are
subject to market risk with respect to fluctuations in the relative values of
currencies. We have international operations in Europe, Asia and the Netherlands
Antilles and conduct transactions in the local currency of each location.
Therefore, our operating results may be affected by changes in the values of
those currencies. Historically, our exposure to fluctuations in the relative
values of currencies has been limited because substantially all of our assets
are denominated in U.S. dollars, and those assets which are not denominated in
U.S. dollars have generally been denominated in historically stable currencies.
The impact to our cash and cash equivalents balances has therefore not been
material. Currency transaction gains or losses, derived on monetary assets and
liabilities stated in a currency other than our functional currency, are
recognized in current operations and have not been significant to our operating
results in any period. To date, we have not entered into any foreign exchange
hedges or other derivative financial instruments. We will continue to evaluate
our exposure to foreign currency exchange rate risk on a regular basis.

INTEREST RATE RISK

         Our exposure to market risk for changes in interest rates relates
primarily to our investment in municipal bonds and our long-term debt. We have
invested excess cash in municipal securities, with varying fixed interest rates
and maturity dates. Fixed rate securities may have their fair market values
adversely impacted due to a rise in interest rates.

         The table below provides information about our available for sale
securities that are sensitive to changes in interest rates as of December 31,
2004. The table presents the principal amounts and related weighted average
interest rates by year of maturity. It should be noted that the securities
listed below consist of municipal bonds, some of which may be called prior to
the scheduled maturity dates.

<TABLE>
<CAPTION>

                                                         BY SCHEDULED MATURITY DATE
                                                                (IN MILLIONS)
                                                                                                            FAIR
                                 2005      2006      2007      2008      2009     THEREAFTER     TOTAL      VALUE
                                 ----      ----      ----      ----      ----     ----------     -----      -----
<S>                              <C>       <C>       <C>       <C>       <C>         <C>         <C>       <C>
     Available for sale
       securities:
         Fixed Rate              $3.7      $0.8      $0.1      $0.1         -        $3.0         $7.7     $8.0
         Weighted average
           interest rate         4.87%     5.50%     6.95%     6.40%        -        6.79%
</TABLE>



                                       57
<PAGE>

         As of December 31, 2004, we had one long-term debt instrument with a
principal amount of $16.2 million. This loan bears interest at a rate equal to
the sum of (i) two and 25/100 percent (2.25%) per annum plus (ii) a variable per
annum interest rate equal to the rate listed for one month commercial paper
(non-financial). Due to the variable interest rate of this loan, should interest
rates rise, the results of our operations may be impacted by the additional
costs of carrying this long-term debt. The table below presents the details of
this loan as of December 31, 2004.

<TABLE>
<CAPTION>

                                                               BY SCHEDULED MATURITY DATE
                                                                      (IN MILLIONS)
                                                                                                               FAIR
                                 2005      2006      2007      2008      2009     THEREAFTER     TOTAL       VALUE
                                 ----      ----      ----      ----      ----     ----------     -----       -----
<S>                              <C>       <C>       <C>       <C>       <C>         <C>         <C>           <C>
     Long term debt:
       Variable rate             $0.8      $0.8      $0.8      $0.9      $0.9        $12.0       $16.2         $16.2
       Average interest rate     4.49%     4.50%     4.50%     4.50%     4.50%       4.60%
</TABLE>

EQUITY PRICE RISK

         The securities markets are highly volatile, and securities prices may
increase or decrease for many reasons, including economic, financial or
political events, which we cannot control. These events could result in a
decrease in the overall value or amount of assets that we manage and on which we
earn our fees.

         We have exposure to equity price risks since we earn most of our
revenues from asset management contracts with clients pursuant to which clients
pay us an asset management fee equal to a percentage of the market value of the
assets we manage. As a result, if securities prices fluctuate, the market value
of the assets may fluctuate, and our revenues and profitability may fluctuate as
well. All other factors being equal, if securities prices fall, the value of our
clients' portfolios, and our revenues, would fall as well. In addition, if
securities prices fall, securities may become less attractive investments as
compared to other investments. Clients have the right to remove their assets
from our management at any time, and may be more likely to do so when securities
prices decrease. In that case, the amount of assets we manage may decrease, and
our revenues and net income may fall as well.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

         Not Applicable.

                                    PART II.

ITEM 13. DEFAULT, DIVIDEND ARREARAGES AND DELINQUENCIES

         Not Applicable.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
         PROCEEDS

         Not Applicable.

ITEM 15. CONTROLS AND PROCEDURES

         Under the supervision and with the participation of our management,
including our Chairman and Chief Executive Officer and our Deputy Managing
Director--Chief Financial Officer, we evaluated the effectiveness of the design
and operation of our disclosure controls and procedures (as defined in Rule
13a-15(e) under the Securities Exchange Act of 1934) as of December 31, 2004.
Based upon that evaluation, the Chairman and Chief Executive Officer and the
Deputy Managing Director--Chief Financial Officer concluded that, as of December
31, 2004, our disclosure controls and procedures were effective in timely
alerting them to the material information relating to us (or our consolidated
subsidiaries) required to be included in our periodic SEC filings.



                                       58
<PAGE>

         There were no significant changes made in our internal controls or in
other factors that could significantly affect those controls subsequent to the
date of their evaluation.

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

         Our Board of Directors has determined (by action of its Executive
Committee) that at least one member of the Audit Committee, Jan J. Spiering,
qualifies as a financial expert as that term is defined by the Securities and
Exchange Commission. Mr. Spiering's business experience is described under Item
6 A "Directors, Senior Management and Employees--Directors and Senior
Management." The Board of Directors has determined that Mr. Spiering is an
independent director as such term is defined by the New York Stock Exchange
listing standards.

ITEM 16B. CODE OF ETHICS

         We have adopted a Code of Business Conduct and Ethics which applies to
all of our directors, executive officers and other employees. A copy of this
Code of Business Conduct and Ethics has been posted and is available on our
website at www.wpstewart.com. A copy of this Code will also be made available to
our shareholders upon request by contacting our Deputy Managing
Director--Investor Relations by phone at (441) 295-8585, by fax at (441)
296-8357 or by e-mail at IRINFO@wpstewart.com.

         We intend to disclose any amendment (other than technical,
administrative or other non-substantive amendments) or waiver to our Code of
Business Conduct and Ethics on our website, www.wpstewart.com, within five
business days of such amendment or waiver if the amendment or waiver applies to
our Chief Executive Officer, Deputy Managing Director--Chief Financial Officer
or Deputy Managing Director--Financial Operations.

ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

         AUDIT FEES

         The aggregate fees billed by PricewaterhouseCoopers LLP, our
independent accounts, for the audit of our financial statements and other
services provided in connection with statutory and regulatory filings were
$549,266 and $553,104 for fiscal years ended December 31, 2004 and 2003,
respectively.

         AUDIT-RELATED FEES

         The aggregate fees billed by PricewaterhouseCoopers LLP for assurance
and related services related to the performance of an audit or review of our
financial statements were $15,000 and $16,000 for fiscal years ended December
31, 2004 and 2003, respectively. Audit-related fees are for the examination of
the performance of the W.P. Stewart U.S. Equity Composite.

         TAX FEES

         The aggregate fees billed by PricewaterhouseCoopers LLP for services
related to tax compliance, tax advice and tax planning were $197,777 and
$254,076 for fiscal years ended December 31, 2004 and 2003, respectively. Tax
fees are fees in respect of tax return preparation, consultation on tax matters
and other tax planning and advice.



                                       59
<PAGE>

         ALL OTHER FEES

         The aggregate fees billed by PricewaterhouseCoopers LLP for all
services other than those described above were $6,527 and $27,764 for fiscal
years ended December 31, 2004 and 2003, respectively. These fees were primarily
for pension plan and retirement plan consulting services.

          All of the audit-related, tax and other fees described above were
pre-approved by the Audit Committee. The Audit Committee, or a designated member
thereof, pre-approves each audit and non-audit service rendered by our external
auditor. The following are "prohibited non-auditing services": (i) bookkeeping
or other services related to the accounting records or financial statements of
W.P. Stewart & Co., Ltd.; (ii) financial information systems design and
implementation; (iii) appraisal or valuation services, providing fairness
opinions or preparing contribution-in-kind reports; (iv) actuarial services; (v)
internal audit outsourcing services; (vi) management functions or human
resources; (vii) broker or dealer, investment adviser or investment banking
services; (viii) legal services and expert services unrelated to the audit; and
(ix) any other service that the Public Company Accounting Oversight Board
prohibits through regulation. The services discussed in clauses (i) through (v)
are permitted provided the Audit Committee reasonably concludes that the results
of such services will not be subject to audit procedures during an audit.

         Notwithstanding the foregoing, pre-approval is not necessary for minor
permitted non-audit services if: (i) the aggregate amount of all such non-audit
services provided constitutes not more than five percent of the total amount of
revenues paid by W.P. Stewart & Co., Ltd. to its auditor during the fiscal year
in which the non-audit services are provided; (ii) such services were not
recognized at the time of the engagement to be non-audit services; and (iii)
such services are promptly brought to the attention of the Audit Committee and
approved prior to the completion of the audit by the Audit Committee or by one
or more members of the Audit Committee to whom authority to grant such approvals
has been delegated by the Audit Committee.

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

         Not Applicable

ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

         The following table shows, for each month in 2004, certain information
with respect to our purchase of our common shares. All unvested shares were
repurchased from employees at the original price paid by such employee. Unvested
shares were repurchased at the time of the employee's termination of employment.
All vested shares were purchased from employees at the then current market
price. No shares were purchased pursuant to a publicly announced repurchase plan
or program.



                                       60
<PAGE>


                                        Number of Shares
                                     ----------------------        Average Price
                          Month      Vested        Unvested         Per Share
                          -----      ------        --------         ---------
                       Jan 2004            -              -                 -
                       Feb 2004        2,356         58,125             $9.38
                       Mar 2004            -            822            $13.26
                       Apr 2004            -              -                 -
                       May 2004        2,587              -            $19.94
                       Jun 2004            -              -                 -
                       Jul 2004            -              -                 -
                       Aug 2004        2,453            193            $20.20
                       Sep 2004            -              -                 -
                       Oct 2004            -              -                 -
                       Nov 2004          958         30,342            $16.45
                       Dec 2004            -              -                 -
                                     -------      ---------
                                       8,354         89,482
                                     =======      =========


                                    PART III.

ITEM 17. FINANCIAL STATEMENTS

         See pages F-1 through F-24, incorporated herein by reference.

ITEM 18. FINANCIAL STATEMENTS

         Not Applicable

ITEM 19. EXHIBITS

1.1*     Memorandum of Association
1.2*     Bye-Laws
2.1**    Form of Stock Certificate
4.1*     1996 Shareholders Agreement among Global Reach, Limited and
         Shareholders of Global Reach Limited
4.4*     Purchase Agreement, dated as of June 30, 1999, between W.P.
         Stewart & Co., Ltd. and Bowen Asia Limited.
4.4***   Share Exchange Agreement, dated as of December 29, 2000, between
         W.P. Stewart & Co., Ltd. and TPR & Partners N.V.
4.5***   Amendment to 1996 Shareholder Agreement
4.6#     Share Exchange Agreement, dated as of November 14, 2001, between
         W.P. Stewart & Co., Ltd. and TPR Holding B.V.
4.7#     Deferred Share Exchange Agreement, dated as of November 14, 2001,
         among W.P. Stewart & Co., Ltd., W.P. Stewart Asset Management
         (Europe), Ltd. and TPR Holding B.V.
8.1      Subsidiaries of the Registrant
12.1     Certification pursuant to Rule 13a-14(a) of the Securities
         Exchange Act of 1934
12.2     Certification pursuant to Rule 13a-14(a) of the Securities
         Exchange Act of 1934
13.1     Certification pursuant to 18 U.S.C. 1350, as adopted pursuant to
         Section 906 of the Sarbanes-Oxley Act of 2002
13.2     Certification pursuant to 18 U.S.C. 1350, as adopted pursuant to
         Section 906 of the Sarbanes-Oxley Act of 2002
14.1     Consent of PricewaterhouseCoopers LLP

--------------------------

*        Previously filed on November 21, 2000 as an exhibit to the Registrant's
         Registration Statement on Form F-1 (333-49420).

**       Previously filed on December 6, 2000 as an exhibit to the Registrant's
         Registration Statement on Form 8-A/A (011-16245).

***      Previously filed on March 30, 2001 as an exhibit to the Registrant's
         Report on Form 20-F (011-16245).

#        Previously filed on March 29, 2002 as an exhibit to the Registrant's
         Report on Form 20-F (011-16245).



                                       61
<PAGE>



INDEX TO CONSOLIDATED
FINANCIAL STATEMENTS
                                                                         PAGE
CONSOLIDATED FINANCIAL STATEMENTS AS OF, AND FOR THE THREE YEARS ENDED
  DECEMBER 31, 2004, 2003 AND 2002
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                  F-2
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION                           F-3
CONSOLIDATED STATEMENTS OF OPERATIONS                                    F-4
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY               F-5
CONSOLIDATED STATEMENTS OF CASH FLOWS                                    F-6
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                       F-7 TO F-24




                                      F-1
<PAGE>




             Report of Independent Registered Public Accounting Firm

To the Board of Directors and
Shareholders of W.P. Stewart & Co., Ltd.

         In our opinion, the accompanying consolidated statements of financial
condition and the related consolidated statements of operations, changes in
shareholders' equity and of cash flows appearing on pages F-3 through F-24
present fairly, in all material respects, the financial position of W.P. Stewart
& Co., Ltd. and its subsidiaries (the "Company") at December 31, 2004, 2003 and
2002, and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 2004 in conformity with accounting
principles generally accepted in the United States of America. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.


PricewaterhouseCoopers LLP









New York, New York

March 7, 2005





                                      F-2
<PAGE>

                            W.P. Stewart & Co., Ltd.
                 Consolidated Statements of Financial Condition
                        December 31, 2004, 2003 and 2002


                                   Assets:

<TABLE>
<CAPTION>
                                                                                      2004            2003                2002
                                                                                 -------------  --------------  --------------
<S>                                                                              <C>            <C>             <C>
  Cash and cash equivalents                                                      $ 51,859,146   $  36,824,614   $  34,426,192
  Fees receivable                                                                   2,626,200       1,895,426       2,634,631
  Receivable from broker-dealer                                                       274,936         395,617         866,462
  Investments in unconsolidated affiliates (net of accumulated amortization
    of $329,488, $247,116 and $164,744 for 2004, 2003 and 2002, respectively)       3,783,010       3,855,406       3,983,259
  Receivables from affiliates, net (includes fees receivable of
    $13,996,738, $375,081 and $328,221 for 2004, 2003 and 2002, respectively)      14,708,269         903,029         684,810
  Investments, available for sale (cost $9,246,245, $9,469,688 and $8,892,529
    [primarily municipal securities] for 2004, 2003 and 2002, respectively)         9,019,674       9,291,201       8,769,788
  Investment in aircraft (net of accumulated depreciation of $19,445,223,
    $17,442,551 and $15,437,634 for 2004, 2003 and 2002, respectively)              3,006,252       5,008,924       7,013,841
  Goodwill                                                                          5,631,797       5,631,797       5,631,797
  Intangible assets (net of accumulated amortization of $18,766,788,
    $13,572,643 and $8,590,080 for 2004, 2003 and 2002, respectively)              67,064,672      69,160,735      60,669,624
  Furniture, equipment, software and leasehold improvements
    (net of accumulated depreciation and amortization of $4,890,622,
    $4,264,880 and $3,401,457 for 2004, 2003 and 2002, respectively)                3,315,698       3,320,096       4,089,795
  Interest receivable on shareholders' notes                                           62,894         146,158         297,006
  Income taxes receivable                                                              86,582       1,510,692       3,214,280
  Other assets                                                                      3,270,789       3,064,215       2,697,322
                                                                                 -------------  --------------  --------------

                                                                                 $164,709,919   $ 141,007,910   $ 134,978,807
                                                                                 =============  ==============  ==============
                    Liabilities and Shareholders' Equity:

Liabilities:
  Loans payable                                                                  $ 16,202,992   $  16,968,114   $  17,511,376
  Employee compensation and benefits payable                                        5,924,364       1,075,306       1,016,970
  Fees payable                                                                      2,466,561         678,937       1,103,030
  Professional fees payable                                                         3,708,956       3,280,871       2,606,981
  Accrued expenses and other liabilities                                            4,977,765       3,919,361       4,510,103
                                                                                 -------------  --------------   -------------
                                                                                   33,280,638      25,922,589      26,748,460
                                                                                 -------------  --------------   -------------

Minority Interest                                                                           -         416,731         165,132
                                                                                 -------------  --------------   -------------

Shareholders' Equity:
  Common shares, $0.001 par value (125,000,000 shares authorized
    46,113,462, 46,035,726 and 46,179,822 shares issued and
    outstanding for 2004, 2003 and 2002, respectively)                                 46,113          46,036           46,180
  Additional paid-in-capital                                                       82,344,878      80,419,304       78,673,127
  Contingently returnable shares (162,800 and 975,766 shares
    for 2003 and 2002, respectively)                                                        -      (3,623,928)     (14,263,158)
  Unearned compensation                                                            (2,084,325)              -                -
  Accumulated other comprehensive income                                              984,626         573,284           34,576
  Retained earnings                                                                53,204,705      45,217,876       57,129,989
                                                                                 -------------  --------------   --------------
                                                                                  134,495,997     122,632,572      121,620,714

Less: notes receivable for common shares                                           (3,066,716)     (7,963,982)     (13,555,499)
                                                                                 -------------  --------------   --------------

                                                                                  131,429,281     114,668,590      108,065,215
                                                                                 -------------  --------------   --------------

                                                                                 $164,709,919   $ 141,007,910    $ 134,978,807
                                                                                 =============  ==============   ==============
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                      F-3
<PAGE>

                        W.P. Stewart & Co., Ltd.
                 Consolidated Statements of Operations
          For the Years Ended December 31, 2004, 2003 and 2002

<TABLE>
<CAPTION>
                                                                                    2004             2003             2002
                                                                                --------------  --------------    -------------
<S>                                                                             <C>             <C>               <C>
Revenue:
  Fees (includes fees from affiliates of $17,755,121, $3,652,480 and
    $3,521,595 for 2004, 2003 and 2002, respectively)                           $ 116,005,500   $  94,062,338     $105,418,778
  Commissions                                                                      34,819,726      22,461,350       28,293,063
  Interest and other                                                                1,496,179       2,278,783        3,569,988
                                                                                --------------  --------------    -------------

                                                                                  152,321,405     118,802,471      137,281,829
                                                                                --------------  --------------    -------------

Expenses:
  Employee compensation and benefits                                               29,102,102      22,941,582       26,336,544
  Fees paid out                                                                     7,760,372       6,058,705        7,250,443
  Commissions, clearance and trading                                                7,371,412       4,810,992        5,919,022
  Research and administration                                                      14,781,318      14,429,008       14,358,071
  Marketing                                                                         5,617,923       4,709,203        5,166,360
  Depreciation and amortization                                                     8,038,837       7,933,277        8,048,637
  Other operating                                                                   8,648,979       8,861,154        8,370,546
                                                                                --------------  --------------    -------------
                                                                                   81,320,943      69,743,921       75,449,623
                                                                                --------------  --------------    -------------

Income before taxes                                                                71,000,462      49,058,550       61,832,206

Provision for taxes                                                                 7,851,775       5,983,267        6,381,199
                                                                                --------------  --------------    -------------

Net income                                                                      $  63,148,687   $  43,075,283     $ 55,451,007
                                                                                ==============  ==============    =============

Earnings per share:

Basic earnings per share                                                        $        1.40   $        0.97     $       1.27
                                                                                ==============  ==============    =============

Diluted earnings per share                                                      $        1.39   $        0.95     $       1.21
                                                                                ==============  ==============    =============
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                      F-4
<PAGE>

                            W.P. Stewart & Co., Ltd.
           Consolidated Statement of Changes in Shareholders' Equity
              For the Years Ended December 31, 2004, 2003 and 2002


<TABLE>
<CAPTION>

                                                          Common Shares             Additional     Contingently
                                                    ---------------------------      Paid-In       Returnable         Unearned
                                                        Shares        Amount         Capital         Shares         Compensation
                                                    -------------  ------------   -------------   -------------     ------------
<S>                                                  <C>           <C>            <C>              <C>               <C>
Balance @ December 31, 2001                           47,831,864    $   47,832    $ 105,472,859   $(24,902,377)     $         -

  Issuance of common shares, @ $0.001 par value
    Cash                                                  39,333            39          684,208
    Notes receivable                                      54,666            55          960,083

  Contingently returnable shares, no longer
   subject to repurchase                                                              8,587,499     10,639,219

  Repurchase and cancellation of common
   shares, @ $0.001 par value                         (1,595,720)       (1,596)     (35,188,930)

  Cancellation of common shares, @ $0.001
   par value                                            (150,321)         (150)      (2,281,509)

  Non-cash compensation                                                                 438,917

  Net income

  Dividends

  Other comprehensive income

  Proceeds from notes receivable
    for common shares
                                                    -------------  ------------   -------------- --------------    ------------

Balance @ December 31, 2002                           46,179,822        46,180       78,673,127    (14,263,158)               -

  Issuance of common shares, @ $0.001 par value
    Cash                                                  47,273            47          971,654
    Notes receivable                                      20,750            21          335,299

  Contingently returnable shares, no longer
   subject to repurchase                                                              2,919,052     10,261,580

  Repurchase and cancellation of common
   shares, @ $0.001 par value                            (85,312)          (85)      (1,189,609)

  Cancellation of common shares, @ $0.001
   par value                                            (126,807)         (127)      (1,671,852)       377,650

  Non-cash compensation                                                                 381,633

  Net income

  Dividends

  Other comprehensive income

  Proceeds from notes receivable
    for common shares
                                                    -------------  ------------    -------------   ------------    ------------

Balance @ December 31, 2003                           46,035,726        46,036       80,419,304     (3,623,928)               -

  Issuance of common shares, @ $0.001 par value
    Cash                                                  29,714            29          532,369
    Notes receivable                                       7,858             7          148,366
    Restricted shares                                    138,000           138        2,706,162                      (2,706,300)

  Contingently returnable shares, no longer
   subject to repurchase                                                               (623,524)     3,623,928

  Repurchase and cancellation of common
   shares, @ $0.001 par value                            (46,122)          (46)        (352,584)

  Cancellation of common shares, @ $0.001
   par value                                             (51,714)          (51)        (845,496)

  Non-cash compensation                                                                 360,281                         621,975

  Net income

  Dividends

  Other comprehensive income

  Proceeds from notes receivable
    for common shares
                                                    ------------   -----------     ------------     ------------    -----------

Balance @ December 31, 2004                           46,113,462   $    46,113     $ 82,344,878      $       -      $(2,084,325)
                                                    ============   ===========     ============     ============    ===========
</TABLE>


<TABLE>
<CAPTION>

                                                        Accumulated
                                                           Other
                                                       Comprehensive     Retained               Notes
                                                          Income         Earnings            Receivable               Total
                                                      --------------   --------------      ---------------       --------------

<S>                                                  <C>              <C>                 <C>                   <C>
Balance @ December 31, 2001                           $   (471,369)    $  57,007,661       $  (23,114,617)       $ 114,039,989

  Issuance of common shares, @ $0.001 par value
    Cash                                                                                                               684,247
    Notes receivable                                                                             (960,138)                   -

  Contingently returnable shares, no longer
   subject to repurchase                                                                                            19,226,718

  Repurchase and cancellation of common
   shares, @ $0.001 par value                                                                                      (35,190,526)

  Cancellation of common shares, @ $0.001
   par value                                                                                    2,281,659                    -

  Non-cash compensation                                                                                                438,917

  Net income                                                              55,451,007                                55,451,007

  Dividends                                                              (55,328,679)                              (55,328,679)

  Other comprehensive income                               505,945                                                    505,945

  Proceeds from notes receivable
    for common shares                                                                           8,237,597            8,237,597
                                                       -----------     -------------      ---------------       --------------

Balance @ December 31, 2002                                 34,576        57,129,989          (13,555,499)         108,065,215

  Issuance of common shares, @ $0.001 par value
    Cash                                                                                                              971,701
    Notes receivable                                                                             (335,320)                  -

  Contingently returnable shares, no longer
   subject to repurchase                                                                                           13,180,632

  Repurchase and cancellation of common
   shares, @ $0.001 par value                                                                                      (1,189,694)

  Cancellation of common shares, @ $0.001
   par value                                                                                    1,294,329                    -

  Non-cash compensation                                                                                               381,633

  Net income                                                              43,075,283                                43,075,283

  Dividends                                                              (54,987,396)                              (54,987,396)

  Other comprehensive income                               538,708                                                    538,708

  Proceeds from notes receivable
    for common shares                                                                           4,632,508            4,632,508
                                                      ------------    --------------       --------------       --------------

Balance @ December 31, 2003                                573,284        45,217,876           (7,963,982)         114,668,590

  Issuance of common shares, @ $0.001 par value
    Cash                                                                                                              532,398
    Notes receivable                                                                             (148,373)                   -
    Restricted shares                                                                                                        -

  Contingently returnable shares, no longer
   subject to repurchase                                                                                             3,000,404

  Repurchase and cancellation of common
   shares, @ $0.001 par value                                                                                         (352,630)

  Cancellation of common shares, @ $0.001
   par value                                                                                      845,547                    -

  Non-cash compensation                                                                                                982,256

  Net income                                                              63,148,687                                63,148,687

  Dividends                                                              (55,161,858)                              (55,161,858)

  Other comprehensive income                               411,342                                                     411,342

  Proceeds from notes receivable
    for common shares                                                                           4,200,092            4,200,092
                                                       -----------      ------------        -------------       --------------

Balance @ December 31, 2004                            $   984,626      $ 53,204,705       $ (3,066,716)        $  131,429,281
                                                       ===========      ============       ==============       ==============
</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                      F-5
<PAGE>


                            W.P. Stewart & Co., Ltd.
                     Consolidated Statements of Cash Flows
              For the Years Ended December 31, 2004, 2003 and 2002

<TABLE>
<CAPTION>
                                                                                  2004             2003              2002
                                                                              -------------   --------------    --------------
<S>                                                                           <C>             <C>                <C>
Cash flows from operating activities:
  Net income                                                                  $  63,148,687   $   43,075,283     $  55,451,007
  Adjustments to reconcile net income to net cash
    provided by operating activities:
      (Gain)/loss on sale of available for sale securities                                -         (219,790)           8,522
      Amortization of bond premium                                                  104,380          262,527           43,807
      Depreciation and amortization                                               8,038,837        7,933,277        8,048,637
      Equity in income of unconsolidated affiliates                                 315,602           45,481          (86,314)
      Non-cash compensation                                                         982,256          381,633          438,917
      Minority interest                                                            (416,731)         251,599           99,493
  Changes in operating assets and liabilities:
      Fees receivable                                                              (730,774)         739,205          317,949
      Receivable from broker-dealer                                                 120,681          470,845         (284,371)
      Receivables from affiliates, net                                          (13,805,240)        (218,219)         (18,618)
      Income taxes receivable                                                     1,424,110        1,703,588          856,891
      Interest receivable on shareholders' notes                                     83,264          150,848           20,286
      Other assets                                                                 (206,574)        (366,893)         291,620
      Employee compensation and benefits payable                                  4,849,058           58,336           33,146
      Fees payable                                                                1,787,624         (424,093)         224,696
      Income taxes payable                                                                -                -       (1,078,713)
      Professional fees payable                                                     428,085          673,890         (520,096)
      Accrued expenses and other liabilities                                      1,058,404         (590,742)        (487,567)
                                                                              --------------  ---------------   --------------

               Net cash provided by operating activities                         67,181,669       53,926,775       63,359,292
                                                                              --------------  ---------------   --------------

Cash flows (used for) investing activities:
  Proceeds from sale of available for sale securities                             4,460,267        4,004,790          991,478
  Purchase of available for sale securities                                      (4,278,611)      (4,567,763)      (8,880,128)
  Investment in unconsolidated affiliate                                           (325,577)               -                -
  Cash dividends paid on shares subject to repurchase                               (97,680)        (293,040)      (1,268,600)
  Purchase of furniture, equipment, software and leasehold improvements            (755,249)         (93,729)        (336,938)
                                                                              --------------  ---------------   --------------

               Net cash (used for) investing activities                            (996,850)        (949,742)      (9,494,188)
                                                                              --------------  ---------------   --------------

Cash flows (used for) financing activities:
  Payments on loans payable                                                        (765,122)        (543,262)        (586,961)
  Proceeds from issuance of common shares                                           532,398          971,701          684,247
  Repurchase of common shares                                                      (352,630)      (1,189,694)     (35,190,526)
  Proceeds from notes receivable for common shares                                4,200,092        4,632,508        8,237,597
  Dividends to shareholders                                                     (55,161,858)     (54,987,396)     (55,337,207)
                                                                              --------------  ---------------   --------------

               Net cash (used for) financing activities                         (51,547,120)     (51,116,143)     (82,192,850)

Effect of exchange rate changes in cash                                             396,833          537,532          451,594
                                                                              --------------  ---------------   --------------

Net increase in cash and cash equivalents                                        15,034,532        2,398,422      (27,876,152)

 Cash and cash equivalents, beginning of year                                    36,824,614       34,426,192       62,302,344
                                                                              --------------  ---------------   --------------

 Cash and cash equivalents, end of year                                       $  51,859,146   $   36,824,614    $  34,426,192
                                                                              ==============  ===============   ==============

Supplemental disclosures of cash flows information
  Cash paid during the period for:

               Income taxes                                                   $   7,130,218   $    4,516,783    $   6,800,811
                                                                              ==============  ===============   ==============
               Interest                                                       $     585,997   $      998,364    $   1,231,937
                                                                              ==============  ===============   ==============
</TABLE>

Supplemental Schedule of Non-Cash Investing and Financing Activities:
In 2004, the final 20% of the shares originally issued in connection with our
acquisition of TPRS Services N.V. in 2000, ceased to be subject to repurchase,
and were recorded with a fair value of $3,000,404 (see Note 2). In addition, as
discussed in Note 2, in 2003, 20% of the shares originally issued in connection
with our acquisitions of NS Money Management (Bermuda) Limited, First Long
Island Investors, Inc. and TPRS Services N.V. ceased to be subject to
repurchase, and were recorded with a fair value of $2,333,644, $3,868,800 and
$6,978,188, respectively. Additionally, in accordance with the provisions of the
acquisition agreements, the Company reacquired 35,000 shares which were recorded
with a value of $377,650 representing the initial issue price of the shares (see
Note 2). In addition, as discussed in Note 2, in 2002, 20% of the shares
originally issued in connection with our acquisitions of NS Money Management
(Bermuda) Limited, First Long Island Investors, Inc. and TPRS Services N.V.
ceased to be subject to repurchase, and were recorded with a fair value of
$4,238,882, $5,659,200 and $9,328,636, respectively.

The Company cancelled outstanding notes of $845,547, $1,294,329 and $2,281,659
for the years ended December 31, 2004, 2003 and 2002, respectively (see Note
10).

The Company issued common shares for notes receivable for the years ended
December 31, 2004, 2003 and 2002 in the amounts of $148,373, $335,320 and
$960,138, respectively (see Notes 10 and 11).

The Company issued 138,000 common shares for the year ended December 31, 2004,
recorded with a fair value of $2,706,300 (see Note 13).

              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                      F-6
<PAGE>


         NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: BASIS OF PRESENTATION

The accompanying consolidated financial statements of W.P. Stewart & Co., Ltd.,
a Bermuda exempt company incorporated on August 16, 1996 and a registered
investment adviser under the United States of America ("U.S.") Investment
Advisers Act of 1940, as amended, ("WPS & Co., Ltd." and, together with its
subsidiaries, the "Company") are presented on a consolidated basis and include
the historical operations of the Company.

NOTE 2: BACKGROUND AND ORGANIZATION

For the years ended December 31, 2004, 2003 and 2002, the consolidated Company
consisted of several worldwide affiliated entities under common control, which
provide investment advisory and related services including securities brokerage.
The background and organization of the entities presented in the Company's
consolidated financial statements are set out below.

The Company's subsidiaries and affiliates include:

W.P. Stewart Asset Management Ltd. ("WPSAM"), formerly W.P. Stewart & Company,
Limited, a wholly-owned subsidiary, which was incorporated in Bermuda on July
10, 1995, and is a registered investment adviser under the U.S. Investment
Advisers Act of 1940 with clients throughout the world.

W.P. Stewart Securities Limited ("WPSSL"), a wholly-owned subsidiary,
incorporated as an exempt company under the laws of Bermuda on January 2, 1996.
WPSSL acts as an introducing broker, clearing all transactions with, and for,
customers of its affiliates on a fully-disclosed basis through an independent
clearing broker. WPSSL is a registered broker-dealer under the U.S. Securities
Exchange Act of 1934, as amended, and is a member of the National Association of
Securities Dealers.

W.P. Stewart Fund Management Limited ("WPS Dublin"), a wholly-owned subsidiary
of WPSAM, which was incorporated in Ireland on January 27, 1997. The primary
business of WPS Dublin is providing management and administrative services to
investment funds. WPS Dublin is currently the manager of W.P. Stewart Funds plc
and W.P. Stewart (Distributor) Funds plc, two umbrella-type open-ended
investment companies regulated by the Irish Financial Services Regulatory
Authority ("IFSRA"), formerly regulated by the Central Bank of Ireland. Prior to
April 2004, WPS Dublin was the manager of WP Stewart Global Funds plc, an
umbrella-type open-ended investment company regulated by the Central Bank of
Ireland. Effective April 28, 2004 WP Stewart Global Funds plc entered into
voluntary liquidation.

W.P. Stewart & Co., Inc. ("WPSI"), formerly WPS III, Inc., which was
incorporated in Delaware on May 15, 1998 and became a wholly-owned subsidiary of
WPS & Co., Ltd. on June 30, 1998. WPSI is a registered investment adviser under
the U.S. Investment Advisers Act of 1940. Its principal business is to provide
investment research and sub-advisory services to the Company.

W.P. Stewart & Co. (Europe), Ltd. ("WPS Europe") formerly W.P. Stewart Global
Management, Ltd., a wholly-owned subsidiary of the Company which was formed on
September 14, 1998 in the United Kingdom under the laws of England and Wales, as
a private limited company. WPS Europe is authorized and regulated by the
Financial Services Authority ("FSA") and previously was regulated by the
Investment Management Regulatory Organisation Limited ("IMRO"). Its principal
business is to provide investment research and sub-advisory services to the
Company.



                                      F-7
<PAGE>

WPS Aviation Holdings LLC ("WPS Aviation") was formed in Delaware on November
12, 1998, and is a wholly-owned subsidiary of WPSI.

Business Acquisitions

On May 19, 1999, the Company consummated its acquisition of 50% of the capital
stock of TPRS Services N.V. ("TPRS"), a then newly formed Curacao company that
is engaged in marketing of investment services, in exchange for 1,152,000 common
shares of the Company, subject to repurchase provisions. On December 29, 2000,
the Company consummated its acquisition of the remaining 50% of TPRS in exchange
for 814,000 common shares of the Company, subject to repurchase provisions.

On June 1, 1999, the Company consummated its acquisition of all of the
outstanding capital shares of NS Money Management (Bermuda) Limited, currently
known as NS Money Management Ltd. ("NSMM"), a Bermuda holding company, in
exchange for 898,831 common shares of the Company, subject to repurchase
provisions. NSMM operates as an investment adviser for clients located
throughout the world. On January 1, 2003, in accordance with the provisions of
the acquisition agreements, the Company reacquired 35,000 shares from NSMM.
Accordingly, the shareholders' equity account, contingently returnable shares,
was relieved of $377,650, which represents the initial issue price of the
shares.

On October 1, 1999, the Company consummated its acquisition of all of the
outstanding capital stock of First Long Island Investors, Inc. ("FLII"), a then
newly formed company engaged in marketing of investment services, in
consideration for 1,200,000 common shares of the Company, subject to repurchase
provisions. Operations of this entity continue under the name W.P. Stewart Asset
Management (NA), Inc.

The repurchase provisions of the TPRS, NSMM and FLII acquisition agreements
specified that 80% of the Company's common shares issued in connection therewith
could be repurchased ("contingently returnable shares") at par value by the
Company up to a maximum of 20% per year as of January 1, 2000, 2001, 2002 and
2003, except in the case of the December 29, 2000 TPRS acquisition where the
reference dates were July 1, 2001, 2002, 2003 and 2004, if assets under
management which were part of the acquisitions decreased below defined reference
amounts at the specified dates and were not replaced.

The recorded purchase price for each acquisition was determined by the sum of:

         1.       the number of shares issued on acquisition not subject to
                  repurchase multiplied by the fair value of each of those
                  shares at the acquisition date;

         2.       the number of shares that cease to be subject to repurchase at
                  each anniversary date multiplied by the fair value of each of
                  those shares at that date; and

         3.       the cumulative cash dividends paid on shares subject to
                  repurchase.

The shares issued in connection with the TPRS, NSMM and FLII acquisitions were
initially reported in shareholders' equity (within share capital and as a
contra-equity account captioned "contingently returnable shares") at their
issuance prices as of the dates the acquisitions were consummated. On the dates
on which the contingently returnable shares ceased to be subject to repurchase,
the contra-equity account was relieved and any difference between the initial
issue price and the then current fair value of the shares was charged or
credited to additional paid-in capital, and the purchase price was adjusted for
the fair value of the shares. Cash dividends on shares no longer subject to
repurchase were recorded as a reduction of shareholders' equity.


                                      F-8
<PAGE>

The following table shows information for each acquisition as of and for the
year ended December 31, 2004.

<TABLE>
<CAPTION>
                                                                    CASH
                                                                  DIVIDENDS
                                                                   PAID ON
                   AGGREGATE     SHARES NOT      CONTINGENTLY    CONTINGENTLY    PURCHASE       INTANGIBLE
                   NUMBER OF     SUBJECT TO      RETURNABLE       RETURNABLE      PRICE         AMORTIZATION
ACQUISITION          SHARES      REPURCHASE         SHARES         SHARES       ALLOCATION      FOR THE YEAR
-----------       ----------     ----------     -----------     ------------    ------------    -------------
<S>                <C>            <C>                           <C>             <C>              <C>
TPRS               1,966,000      1,966,000               -     $    97,680     $ 42,367,772     $ 2,496,619
NSMM                 863,831        863,831               -               -       17,042,406         953,839
FLII               1,200,000      1,200,000                                       23,703,088       1,536,279
                   ---------      ---------     -----------     -----------     ------------    ------------
                   4,029,831      4,029,831               -     $    97,680     $ 83,113,266     $ 4,986,737
                   =========      =========     ===========     ===========     ============    ============
</TABLE>

The following table shows information for each acquisition as of and for the
year ended December 31, 2003.

<TABLE>
<CAPTION>
                                                                  CASH
                                                                DIVIDENDS
                                                                 PAID ON
                    AGGREGATE    SHARES NOT   CONTINGENTLY     CONTINGENTLY      PURCHASE       INTANGIBLE
                    NUMBER OF    SUBJECT TO    RETURNABLE      RETURNABLE         PRICE         AMORTIZATION
ACQUISITION          SHARES      REPURCHASE      SHARES          SHARES         ALLOCATION      FOR THE YEAR
-----------        -----------   -----------  -------------   -------------    ------------    -------------
<S>                <C>           <C>               <C>        <C>              <C>              <C>
TPRS               1,966,000     1,803,200         162,800    $     293,040    $ 39,269,688     $ 2,285,037
NSMM                 863,831       863,831               -                -      17,042,406         953,839
FLII               1,200,000     1,200,000               -                       23,703,088       1,536,279
                   ---------     ---------   -------------    -------------    ------------     -----------
                   4,029,831     3,867,031         162,800    $    293,040     $ 80,015,182     $ 4,775,155
                   =========     =========   =============    ============     ============     ===========
</TABLE>


The following table shows information for each acquisition as of and for the
year ended December 31, 2002.

<TABLE>
<CAPTION>
                                                                    CASH
                                                                  DIVIDENDS
                                                                   PAID ON
                  AGGREGATE      SHARES NOT     CONTINGENTLY    CONTINGENTLY        PURCHASE        INTANGIBLE
                   NUMBER OF     SUBJECT TO      RETURNABLE      RETURNABLE          PRICE         AMORTIZATION
ACQUISITION        SHARES        REPURCHASE         SHARES         SHARES          ALLOCATION      FOR THE YEAR
-----------      -----------     ----------     -----------    --------------     ------------    -------------
<S>                <C>             <C>           <C>          <C>                <C>              <C>
TPRS               1,966,000       1,410,000       556,000      $  764,881       $ 31,998,460      $ 1,815,314
NSMM                 898,831         719,065       179,766         215,719         14,708,762          807,986
FLII               1,200,000         960,000       240,000         288,000         19,834,288        1,294,479
                   ---------      ----------    ----------      ----------       ------------      -----------
                   4,064,831       3,089,065       975,766      $1,268,600       $ 66,541,510      $ 3,917,779
                   =========       =========    ==========      ==========       ============      ===========
</TABLE>

On November 14, 2001, the Company acquired a controlling interest in TPR &
Partners N.V. ("TPR"), an asset-gathering firm based in The Netherlands via the
acquisition of shares in a Bermuda holding company that indirectly owns 100% of
the shares of TPR. Going forward, the Bermuda company, which is named W.P.
Stewart Asset Management (Europe), Ltd. ("WPSAM Europe"), serves as the umbrella
for the Company's European asset gathering and client servicing activities. In
the transaction, the Company initially acquired 9,000 of WPSAM Europe's 12,000
outstanding shares in exchange for 330,000 common shares of the Company. The
former beneficial owners of TPR and their assigns will continue to hold the
remaining 3,000 shares of WPSAM Europe until June 30, 2006, at which time the
Company will acquire those shares at a fair value price determined on that date.
The acquisition price of $8,052,000 less the fair value of net assets acquired
of $170,203 has been allocated to intangible assets and goodwill. For the year
ended December 31, 2004 there were no changes in the carrying value of goodwill.

                                      F-9
<PAGE>

For intangible assets subject to amortization expense, the estimated aggregate
amortization expense for each of the five succeeding years ending December 31 is
as follows:

                     2005                             $5,270,750
                     2006                             $5,264,183
                     2007                             $5,219,750
                     2008                             $5,219,750
                     2009                             $5,219,750


NOTE 3: ACCOUNTING POLICIES

These consolidated financial statements are presented in conformity with
accounting principles generally accepted in the U.S. The functional currency for
the Company and its affiliates is the U.S. dollar with the exceptions of WPS
Europe and WPSAM Europe for which the pound sterling and the euro, respectively,
are the functional currencies.

The process of preparing consolidated financial statements in conformity with
generally accepted accounting principles in the U.S. requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the dates of
the consolidated financial statements, as well as the reported amounts of
revenues and expenses during the reporting periods. Actual results may differ
from those estimates.

Principles of Consolidation
---------------------------
The Company consolidates all affiliated entities in which it has a majority
ownership interest or maintains effective control. All material inter-company
transactions have been eliminated.

Cash and Cash Equivalents
-------------------------
The Company considers cash in banks, money market funds and short-term highly
liquid investments with an original maturity of three months or less at the date
of purchase to be cash equivalents. The Company maintains the majority of its
cash in money market funds at The Bank of Bermuda, a Bermuda-domiciled bank.

Investments in Unconsolidated Affiliates
----------------------------------------
The Company includes its investments in the common stock of investees in which
it owns between 20-50% in the caption "Investments in Unconsolidated Affiliates"
and accounts for such investments under the equity method of accounting.

Investments, Available for Sale
-------------------------------
Investments in equity and municipal securities have been classified as
"available for sale" in accordance with Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities" and, as such, are recorded at quoted market values. Transactions are
recorded on a trade date basis. Unrealized gains and losses are recorded in
accumulated other comprehensive income within shareholders' equity.

                                      F-10
<PAGE>

Furniture, Equipment, Software, Leasehold Improvements and Investment in
Aircraft
--------------------------------------------------------------------------------
Furniture, equipment, software, leasehold improvements and investment in
aircraft are stated at cost less accumulated depreciation and amortization.
Depreciation is computed using straight-line and accelerated methods over the
estimated useful lives of the assets. Leasehold improvements are amortized over
the shorter of the lease term or the estimated life of the improvements. The
aircraft is depreciated using an accelerated method over seven years.

Fees
----
Fees for the management of clients' accounts are based on terms stated in client
contracts and are based upon a percentage of assets under management determined
as of the last day of the prior quarter as specified in the contracts. Fees are
recognized in the period in which they are earned. Under certain client
contracts, the Company is entitled to receive performance fees when the return
on assets under management exceeds specified benchmark returns or other
performance targets. Performance fees are recorded as of the date on which the
performance period ends.

Commissions
-----------
Commissions on brokerage activities and related trading costs are recorded on a
trade date basis.

Income Taxes
------------
The Company uses the asset and liability method required by Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS
109"), to record income taxes. SFAS 109 states that "deferred tax assets and
liabilities are recognized principally for the expected tax consequences of
temporary differences between the tax bases of assets and liabilities and their
reported amounts". A valuation allowance is established to reduce deferred tax
assets to amounts that are expected to be realized.

Foreign Currency Translation
----------------------------
The Company accounts for foreign currency translation in accordance with
Statement of Financial Accounting Standards No. 52, "Foreign Currency
Translation". Assets and liabilities are translated at the exchange rate in
effect at year-end, and revenue and expenses are translated at the average rates
of exchange prevailing during the year. Gains or losses resulting from foreign
currency transactions are included in net income. The U.S. dollar effect that
arises from translating the net assets of WPS Europe and WPSAM Europe is
recorded in "accumulated other comprehensive income", a separate component of
shareholders' equity.

Intangible Assets and Goodwill
------------------------------
Intangible assets arising from the Company's business acquisitions (see Note 2)
are amortized on a straight-line basis over periods of five to 20 years. The
carrying value of the intangibles acquired is reviewed for impairment annually
or whenever events or changes in circumstances indicate that they may not be
recoverable based upon expectations of future undiscounted cash flows over their
remaining lives. Where the undiscounted cash flow is less than the carrying
amount of the asset, an impairment loss will be recognized. The loss will be the
difference between the fair value of the asset and the carrying value of the
asset.

Goodwill from the Company's acquisition of TPR (see Note 2) is accounted for
pursuant to Statement of Financial Accounting Standards No. 142, "Goodwill and
Other Intangible Assets" ("SFAS No. 142"). In accordance with SFAS No. 142,
goodwill is not amortized but is tested annually for impairment.


                                      F-11
<PAGE>

Earnings Per Share
------------------
Basic earnings per share is computed by dividing the net income applicable to
common shares outstanding by the weighted average number of shares outstanding,
excluding unvested shares issued to employees of the Company or its affiliates,
contingently returnable shares, unvested options and vested unexercised options.
Diluted earnings per share is computed using the same method as basic earnings
per share, but also reflects the impact of unvested shares issued to employees
of the Company or its affiliates, contingently returnable shares and the
dilutive effect of unvested options and vested unexercised options issued to
employees of the Company or its affiliates using the treasury stock method.

Share-Based Compensation
------------------------
Effective January 1, 2003, the Company began to account for share-based employee
compensation in accordance with the fair value method prescribed by Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("SFAS No. 123"), as amended by Statement of Financial Accounting
Standards No. 148, "Accounting for Stock-Based Compensation - Transition and
Disclosure" ("SFAS No. 148"), using the prospective adoption method. Under this
method of adoption, compensation expense is recognized based on the fair value
of the share options granted in 2003 and future years over the related vesting
periods. The adoption of SFAS No. 123 did not have a material effect on the
Company's results of operations or financial position.

Prior to January 1, 2003, the Company had elected to account for its share-based
employee compensation plan in accordance with Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB No. 25"). In
accordance with APB No. 25, compensation expense is not recognized for employee
options that have no intrinsic value on the date of grant.

Share options granted for the years ended December 31, 2002 and 2001 were
accounted for, and will continue to be accounted for, under the intrinsic
value-based method as prescribed by APB No. 25. Therefore, no compensation
expense was recognized for those share options that had no intrinsic value on
the date of grant (see Note 12).

Business Segments
-----------------
The Company operates predominantly in one business segment, the investment
advisory and asset management industry.

Reclassification of Comparative Financial Statements
----------------------------------------------------
Certain prior year amounts have been reclassified to conform with current year
presentation.

New Accounting Pronouncements
-----------------------------

In December 2004, the Financial Accounting Standards Board ("FASB") published
Statement of Financial Accounting Standards No. 123 (Revised 2004), "Share-Based
Payment" ("SFAS No. 123R"). SFAS No. 123R requires that compensation cost
related to share-based payment transactions be recognized in the financial
statements. Share-based payment transactions within the scope of SFAS No. 123R
include stock options, restricted stock plans, performance-based awards, stock
appreciation rights, and employee share purchase plans. The provisions of SFAS
No. 123R are effective as of the first interim period that begins after June 15,
2005 with earlier adoption encouraged. Accordingly, the Company will implement
the revised standard starting January 1, 2005. Note 12 to our Consolidated
Financial Statements details our pro forma net income and earnings per share
data as if we had used a fair-value-based method similar to the methods required
under SFAS No. 123R. Management is assessing the implications of this revised
standard, which may materially impact the Company's results of operations in the
future.


                                      F-12
<PAGE>

NOTE 4: EARNINGS PER SHARE

<TABLE>
<CAPTION>
                                                           2004             2003              2002
                                                           ----             ----              ----
<S>                                                     <C>             <C>             <C>
Basic Earnings Per Share:
Net income                                              $ 63,148,687    $43,075,283    $ 55,451,007
                                                        ============    ===========    ============
Weighted average basic shares outstanding                 45,111,869     44,311,905      43,575,633
                                                        ------------    -----------    ------------
Net income per share                                    $       1.40    $      0.97    $       1.27
                                                        ============    ===========    ============

Diluted Earnings Per Share:
Net income                                              $ 63,148,687    $43,075,283    $ 55,451,007
                                                        ============    ===========    ============
Weighted average basic shares outstanding                 45,111,869     44,311,905      43,575,633
Add:  Unvested shares, contingently returnable
       shares, unvested options and vested
       unexercised options                                   412,174        886,060       2,437,739
                                                        ------------    -----------    ------------

Weighted average diluted shares outstanding               45,524,043     45,197,965      46,013,372
                                                        ------------    -----------    ------------
Net income per share                                    $       1.39    $      0.95    $       1.21
                                                        ============    ===========    ============
</TABLE>

Basic earnings per share is computed by dividing the net income applicable to
common shares outstanding by the weighted average number of shares outstanding,
excluding unvested shares issued to employees of the Company or its affiliates,
contingently returnable shares, unvested options and vested unexercised options.
Diluted earnings per share is computed using the same method as basic earnings
per share, but also reflects the impact of unvested shares issued to employees
of the Company or its affiliates, contingently returnable shares and the
dilutive effect of unvested options and vested unexercised options issued to
employees of the Company or its affiliates using the treasury stock method.

On December 31, 2004, 2003 and 2002, respectively, 46,113,462, 46,035,726 and
46,179,822 shares were issued and outstanding. The shareholders of record are
entitled to full voting rights (see Note 14) and dividends on these shares;
700,863, 1,212,254 and 1,988,415 of these shares were unvested and held by the
Company's or affiliates' employees on December 31, 2004, 2003 and 2002,
respectively.


                                      F-13
<PAGE>


NOTE 5: COMPREHENSIVE INCOME

The following table details the components of comprehensive income as described
in Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income".

<TABLE>
<CAPTION>
                                                             2004                 2003               2002
                                                          -----------         -----------        -----------
<S>                                                       <C>                 <C>                <C>
Net income                                                $63,148,687         $43,075,283        $55,451,007
Other comprehensive income, net of tax:
     Reclassification adjustment for
       unrealized gains/(losses) on
        available for sale securities
        included in interest and other                         (7,361)            (72,251)           133,284
     Unrealized gains/(losses) on available
        for sale securities                                    21,870              73,427            (78,933)
     Foreign currency translation
        adjustment                                            396,833             537,532            451,594
                                                          -----------         -----------        -----------
Comprehensive income                                      $63,560,029         $43,613,991        $55,956,952
                                                          ===========         ===========        ===========
</TABLE>


NOTE 6: INVESTMENTS IN UNCONSOLIDATED AFFILIATES

Investments in unconsolidated affiliates include the following:

<TABLE>
<CAPTION>
                                                              2004              2003             2002
                                                          ----------       ----------        ---------
<S>                                                       <C>              <C>               <C>
Investment in Bowen Asia Limited                          $2,317,130       $2,624,008        $2,826,185
Investment in Stewart Bowen Japan Ltd.                       158,557                -                 -
Investment in Kirk Management Ltd.                         1,307,323        1,231,398         1,157,074
                                                         -----------      -----------       -----------
Total                                                     $3,783,010       $3,855,406        $3,983,259
                                                          ==========       ==========        ==========
</TABLE>


At December 31, 2004, the Company owned approximately 40% of Bowen Asia Limited
("Bowen").

The Company owns a 40% interest in Kirk Management Ltd., a real estate joint
venture incorporated in Bermuda. Kirk Management Ltd. owns Trinity Hall, a
building located in Hamilton, Bermuda, which is leased by the Company from the
joint venture and serves as the Company's headquarters.

The Company owns a 50% interest in Stewart Bowen Japan Ltd. ("SBJL"), a joint
venture incorporated in the British Virgin Islands. W. P. Stewart Japan K.K., a
wholly-owned subsidiary of SBJL, is located in Tokyo, Japan and provides client
servicing and asset gathering activities. Bowen owns the remaining 50% interest
in SBJL.


                                      F-14
<PAGE>


NOTE 7: RELATED PARTY TRANSACTIONS

Research and administrative expenses include travel expenses of $2,531,126,
$2,311,783 and $2,000,796 for the years ended December 31, 2004, 2003 and 2002,
respectively, which were paid to Shamrock Aviation, Inc. ("Shamrock"), a company
owned by principal shareholders of the Company (see Note 8).

The Company has entered into agreements pursuant to which either Shamrock or an
entity affiliated with Shamrock has agreed to provide operational and
maintenance services at cost for the Challenger aircraft owned by the Company
(see Note 8). These costs, reflected in research and administration expenses,
include $2,569,082, $2,584,769 and $2,855,298 for the years ended December 31,
2004, 2003 and 2002, respectively.

In February 1999, the Company entered into an agreement with Shamrock in which
Shamrock agreed to delay the sale of an aircraft owned by Shamrock so that such
aircraft would continue to be available for use in the Company's business. At
that time, Shamrock agreed to release WPSI from any and all obligations of
approximately $37 million, to participate in the purchase of an additional
aircraft, delivery of which was scheduled for 2002. In return, the Company had
agreed to indemnify Shamrock for any loss in value of the aircraft Shamrock had
agreed not to sell from the time the agreement was made until the aircraft was
sold or replaced. The value of that aircraft as of the date of Shamrock's
agreement with the Company was estimated to be $27 million. In May 2002, in
exchange for a payment of $100,000, Shamrock released the Company from this
indemnity agreement.

A portion of the office space located in New York includes space occupied by
Stewart family interests. WPSI is reimbursed on a monthly basis for rent and
other costs associated with the space, which amounted to $175,187, $162,477 and
$144,619 for the years ended December 31, 2004, 2003 and 2002, respectively.
These amounts are based upon the actual space utilized in each of those years.

WPS Dublin served as the investment manager to an Irish fund solely advised by
WPS Investissements S.A., a Swiss investment management firm, principally owned
by a beneficial owner of a minority interest in the Company. The Company had no
ownership interest in either the Irish fund or WPS Investissements S.A. WPS
Dublin collected and remitted to WPS Investissements S.A. all of the advisory
fees in respect of such fund. Such fees amounted to $25,405 and $31,871 for the
years ended December 31, 2003 and 2002, respectively. In addition, the Company
pays WPS Investissements S.A. solicitation fees in respect of certain accounts
and an amount calculated on the basis of a portion of the brokerage commissions
paid by such fund and certain accounts, as directed by those clients. Such
payments amounted to $6,358, $12,995 and $16,425 for the years ended December
31, 2004, 2003 and 2002, respectively.

The Company pays Bowen, an unconsolidated affiliate of the Company (see Note 6),
the principal owners of which are an executive officer and a beneficial owner of
a minority interest in the Company, fees for solicitation, sub-advisory and
research services. Such costs amounted to $1,227,329, $859,333 and $665,319 for
the years ended December 31, 2004, 2003 and 2002, respectively. The Company
receives solicitation fees from Bowen Capital Management ("BCM"), a subsidiary
of Bowen, for client referrals to BCM. Total solicitation fees received from BCM
for the years ended December 31, 2004, 2003 and 2002 were $6,098, $7,600 and
$26,117, respectively.

The Company pays Carl Spangler Kapitalanlageges. m.b.H., which is controlled by
Bankhaus Carl Spangler & Co. AG, the Chief Executive Officer of which is one of
the Company's directors, fees for solicitation services. These fees amounted to
$625,617, $988,184 and $631,756 for the years ended December 31, 2004, 2003 and
2002, respectively.



                                      F-15
<PAGE>

The Company pays Appleby Spurling Hunter and Appleby Corporate Services
(formerly Appleby, Spurling & Kempe and A.S. & K. Services Ltd.), a senior
partner of which became a director of the Company in June 2002, fees for various
legal, corporate administrative and secretarial services. Such fees for services
amounted to $43,679, $50,339 and $29,648 for the years ended December 31, 2004,
2003 and 2002, respectively.

Certain directors of the Company serve as directors of funds from which the
Company receives investment advisory fees, fund management fees, subscription
fees and commissions. Such fees and commissions were $20,752,325, $5,765,255 and
$5,743,933 for the years ended December 31, 2004, 2003 and 2002, respectively.

The Company owns a 40% interest in Kirk Management Ltd. (see Note 6), a real
estate joint venture incorporated in Bermuda. The remaining 60% interest is
owned by The Bank of Bermuda of which, prior to 2004, one of the Company's
directors was the Chief Executive Officer. Kirk Management Ltd. also owns and
leases to the Company its Hamilton, Bermuda headquarters. Included in research
and administration expenses is rent expense of $180,000 for each of the years
ended December 31, 2004, 2003 and 2002.

WPSAM serves as investment adviser to W.P. Stewart Holdings N.V., our mutual
fund listed on Euronext Amsterdam. This fund has a fixed fee of 25 basis points
per annum and a 10% performance fee. Included in receivables from affiliates,
net, at December 31, 2004, is a performance fee receivable in the amount of
$13,537,506. There was no performance fee earned for the years ended December
31, 2003 or 2002.

Included in receivables from affiliates, net, at December 31, 2004, 2003 and
2002 is a subordinated loan of $212,526 and accrued interest on such loan in the
amount of $34,132 due from Kirk Management Ltd. The loan has no fixed repayment
date.

Included in investments available for sale at December 31, 2004, 2003 and 2002
are amounts of $895,423, $833,958 and $681,073, respectively, which were
investments in various funds managed by WPS Dublin, a wholly-owned subsidiary of
the Company.

Included in research and administration expenses for the years ended December
31, 2004, 2003 and 2002 is rent expense in the amount of $194,552, $155,581 and
$135,274 which is paid to a company owned by the former principals of W.P.
Stewart Asset Management (Europe) N. V., one of whom is an executive officer of
the Company.

Included in other operating expenses for the years ended December 31, 2004 and
2003 are contributions in the amounts of $411,000 and $222,450 paid to the W.P.
Stewart & Co. Foundation, Inc. (the "Foundation"), a private charitable
foundation.

NOTE 8: LONG-TERM DEBT

On December 16, 1998, WPS Aviation assumed from Shamrock Aviation, all the
rights and obligations of a purchase agreement ("Challenger Purchase Agreement")
dated July 8, 1998, relating to the purchase of a Challenger aircraft. On
December 17, 1998, WPS Aviation entered into a 10-year, amortizing loan
agreement with General Electric Capital Corporation ("GECC") to finance the
obligations of the Challenger Purchase Agreement. The loan was for the principal
sum of $17,340,000 at a fixed interest rate of 6.87% to be paid in 120 monthly
installments of principal and interest of $133,326 and a final installment of
$11,621,076. The first monthly periodic installment was due and paid on January
17, 1999 with installments due and payable on the same day of each succeeding
month.


                                      F-16
<PAGE>

On February 10, 1999, WPS Aviation entered into an additional 10-year,
amortizing loan agreement with GECC for the principal sum of $757,382 at a fixed
interest rate of 6.89% to be paid in an initial installment of $1,015 and 118
monthly installments of principal and interest of $5,869 and a final installment
of $507,635. The first monthly periodic installment was paid on March 17, 1999
with installments due and payable on the same day of each succeeding month.

On March 30, 1999, WPS Aviation entered into an additional 10-year, amortizing
loan agreement with GECC for the principal sum of $1,522,618 at a fixed interest
rate of 7.35% to be paid in an initial installment of $5,285 and 116 monthly
installments of principal and interest of $12,380 and a final installment of
$1,021,114. The first monthly periodic installment was paid on May 17, 1999 with
installments due and payable on the same day of each succeeding month.

On July 10, 2003, WPS Aviation entered into a 10-year amortizing loan agreement
with GECC to continue to finance its obligations under the Challenger Purchase
Agreement. The purpose of this new agreement was solely to consolidate all prior
obligations to GECC and to reduce the fixed interest rates under the previous
obligations. This new loan was for the principal sum of $17,278,264 at a
floating per annum simple interest rate, as defined in the loan agreement as the
contract rate, to be paid in 120 monthly installments and a final installment of
$8,608,913 plus any outstanding interest. The contract rate of interest is equal
to the sum of (i) two and 25/100 percent (2.25%) per annum plus (ii) a variable
per annum interest rate equal to the rate listed for one-month commercial paper
(non-financial). The first monthly periodic installment was due and paid on
August 10, 2003 with installments due and payable on the same day of each
succeeding month. The loan is collateralized by the Challenger aircraft.

Future principal payments on the loan as of December 31, 2004 are as follows:


               2005                                $ 790,651
               2006                                  816,729
               2007                                  843,756
               2008                                  871,570
               2009                                  900,587
               Thereafter (through 2013)          11,979,699
                                                ------------
                                                 $16,202,992
                                                 ===========

Interest expense on long-term debt totaled $579,318, $913,992 and $1,231,937 for
the years ended December 31, 2004, 2003 and 2002, respectively.

The carrying value of this loan approximates its fair value as of December 31,
2004.

The loan documents require the Company to maintain certain financial ratios and
a minimum level of $15 million of tangible net worth (as defined in the loan
documents).

NOTE 9: COMMITMENTS AND CONTINGENCIES

At December 31, 2004, the Company was contingently liable on three irrevocable
standby letters of credit. One letter of credit is in the amount of $1,000,000
in favor of Wachovia Corporate Services Inc. ("Wachovia") and collateralizes
amounts received from the Company's clients that Wachovia wires daily to the
Company's account at The Bank of Bermuda. The second letter of credit is in the
amount of $200,000, in favor of WPSI's landlord. The third letter of credit is
in the amount of $699,033 in favor of WPS Europe's landlord. The latter amount
is guaranteed by the Company, and is collateralized by a fixed deposit cash
account in the same amount, which will remain intact over the term of the lease
and, is reflected in other assets at December 31, 2004, 2003 and 2002.



                                      F-17
<PAGE>

WPSSL conducts business with a clearing broker on behalf of its customers
subject to a clearing agreement. WPSSL earns commissions as an introducing
broker for the transactions of its customers, which are normally settled on a
delivery-against-settlement basis. Under the clearing agreement, WPSSL has
agreed to indemnify the clearing broker for non-performance by any customers
introduced by WPSSL. As the right to charge WPSSL has no maximum amount, and
applies to all trades executed through the clearing broker, WPSSL believes there
is no maximum amount assignable to this right. At December 31, 2004, WPSSL has
recorded no liability with respect to this right. WPSSL is subject to credit
risk to the extent that the clearing broker may be unable to repay amounts owed.

For the year ended December 31, 2004, as discussed in Note 7, the Company earned
a performance fee from W.P. Stewart Holdings N.V. ("WPSH NV"), our mutual fund
listed on Euronext Amsterdam. As per the terms of the investment advisory
agreement, the annual performance fee is payable annually in arrears and is
calculated as 10% of the change in WPSH NV's net asset value per share from
valuation date to valuation date, multiplied by the number of shares outstanding
as of the earlier of the two dates. However, if the calculation were to produce
a negative figure, that amount would be treated as a credit against future
performance fees. If the advisory agreement were to be terminated by the
investment adviser, the remaining negative balance, if any, would have to be
paid back to WPSH NV by the investment adviser. At December 31, 2004, there is
no intention by WPSAM, the investment adviser, to terminate the investment
advisory agreement nor is there any negative balance.

The Company is involved in a legal action with a vendor arising in the ordinary
course of business. Management believes, based on currently available
information, that the results of such proceedings will not have a material
adverse effect on the financial condition or results of operations of the
Company.

NOTE 10: NOTES RECEIVABLE FOR COMMON SHARES

Pursuant to employee or director purchase agreements for common shares, in the
event a purchaser is no longer in the employment of, or no longer serves as a
director of, the Company or any of its affiliates, the purchaser, shall transfer
to the Company all rights to such shares that have not vested at the time of
such termination. The remaining balance of the outstanding notes receivable
related to the unvested shares shall be abated.

Pursuant to the terms of the purchase agreements, during the year ended December
31, 2004, 51,714 unvested common shares of former employees were repurchased and
their installment notes totaling $845,547 were abated.

In 2003, the Company issued 20,750 common shares to certain employees and
employees of affiliates, all of which were issued in connection with the
Company's 2001 Employee Equity Incentive Plan, for installment notes totaling
$335,320. The installment notes are full recourse, bear interest at 8.5% per
annum, are for a term of seven years and are collateralized by the shares
issued. Each principal payment, as defined in each of the promissory notes, is
equal to one twenty-eighth of the total face value of the note. During 2003, the
Company also issued 1,000 common shares to certain employees and employees of
affiliates, all of which were issued in connection with the Company's 2001
Employee Equity Incentive Plan, for cash payments totaling $16,160.

Pursuant to the terms of the purchase agreements, during the year ended December
31, 2003, 91,807 unvested common shares of former employees were repurchased and
their installment notes totaling $1,294,329 were abated.


                                      F-18
<PAGE>

In 2002, the Company issued 54,666 common shares to certain employees and
employees of affiliates, all of which were issued in connection with the
Company's 2001 Employee Equity Incentive Plan, for installment notes totaling
$960,138. The installment notes are full recourse, bear interest at 8.5% per
annum, are for a term of seven years and are collateralized by the shares
issued. Each principal payment, as defined in each of the promissory notes, is
equal to one twenty-eighth of the total face value of the note. During 2002, the
Company also issued 39,333 common shares to certain employees and employees of
affiliates, all of which were issued in connection with the Company's 2001
Employee Equity Incentive Plan, for cash payments totaling $684,247.

Pursuant to the terms of the purchase agreements, during the year ended December
31, 2002, 150,321 unvested common shares of former employees were repurchased
and their installment notes totaling $2,281,659 were abated.

All the common shares described above are subject to vesting provisions.

Future minimum payments expected to be received on notes receivable for common
shares as of December 31, 2004 are as follows:

                2005                              $   975,395
                2006                                  760,849
                2007                                  569,614
                2008                                  483,262
                2009                                  212,431
                Thereafter (through 2011)              65,165
                                                   ----------
                                                  $ 3,066,716
                                                  ===========

Interest income on all such notes was $464,146, $825,778 and $1,790,120 for the
years ended December 31, 2004, 2003 and 2002, respectively.

NOTE 11: 2001 EMPLOYEE EQUITY INCENTIVE PLAN

The W.P. Stewart & Co., Ltd. 2001 Employee Equity Incentive Plan, as amended
(the "Plan") provided for awards of common shares of the Company, to be granted
to eligible employees of the Company and its affiliates in the form of
restricted common shares and/or options. The exercise price of the options is
equal to the market value of the Company's shares on the date of the grant. All
awards that vest are exercisable in equal annual amounts on each of the first
seven anniversaries of the grant dates. The dilutive effect of unvested options
and vested unexercised options is included in the weighted average diluted
shares outstanding in accordance with Statement of Financial Accounting
Standards No. 128, "Earnings Per Share" ("SFAS No. 128").

On May 12, 2003, the Board of Directors approved an amendment to the Plan that
(i) increased the total number of common shares available for awards under the
Plan from 2,500,000 to a total of 3,000,000, inclusive of awards previously
granted, and (ii) increased the duration of the period during which vested
options may be exercised from one year to two years with respect to any option
grants made in the future.

As provided in the Plan, as of July 24, 2004 no further grants may be awarded
under the Plan. However, previously issued grants will extend beyond that date
as expressly provided in the Plan documents.

During 2004, pursuant to the terms of the Plan, 8,622 and 21,092 vested employee
share options granted in 2001 and 2002, respectively, were exercised for an
aggregate amount of $532,399. Additionally in 2004, 4,286 and 3,572 vested
employee share options granted in 2001 and 2002, respectively, were exercised
for installment notes in the amount of $148,373. The installment notes bear
interest at 8.5% per annum, are for a period of two years and are collateralized
by the shares issued.



                                      F-19
<PAGE>

In 2004, pursuant to the terms of the Plan, 19,756 and 7,714 unexercised options
granted in 2001 and 2002, respectively, were forfeited by former employees and
non-employee directors of the Company. Additionally, in 2004, 131,447 and 48,627
vested options granted in 2001 and 2002, respectively, expired.

In 2003, the Company granted awards under the Plan that consisted of rights to
purchase 21,750 restricted common shares, which vest in equal amounts in each of
the 28 calendar quarters following the grant, and options to purchase 65,250
shares, which vest in equal amounts on each of the first seven anniversaries of
the grant date. The exercise price of the options is equal to the market value
of the Company's shares on the date of grant.

During 2003, pursuant to the terms of the Plan, 44,629 and 1,644 vested employee
share options granted in 2001 and 2002, respectively, were exercised for an
aggregate amount of $955,541.

In 2003, 195,561 and 53,929 unexercised options granted in 2001 and 2002,
respectively, were forfeited by former employees of the Company. Additionally,
in 2003, 109,678 vested options granted in 2001 expired.

In 2002, the Company granted awards under the Plan that consisted of rights to
purchase 93,999 restricted common shares, which vest in equal amounts in each of
the 28 calendar quarters following the grant, and options to purchase 559,501
shares, which vest in equal amounts on each of the first seven anniversaries of
the grant date. The exercise price of the options is equal to the market value
of the Company's shares on the date of grant.

During 2002, pursuant to the terms of the Plan, 172,314 unexercised options
granted in 2001, were forfeited by former employees of the Company.

NOTE 12: SHARE OPTIONS

On January 1, 2003, the Company began to account for share-based employee
compensation in accordance with the fair value method prescribed by SFAS No.
123, as amended by SFAS No. 148, using the prospective adoption method. Under
this method of adoption, compensation expense is recognized based on the fair
value of the share options granted in 2003 and future years over the related
vesting periods. The amount of share-based compensation recognized under SFAS
No. 123 for the year ended December 31, 2004 for share options granted in 2003,
was $5,639. There were no share options granted for the year ended December 31,
2004.

The options outstanding as of December 31, 2004 for grants awarded during the
year ended December 31, 2003, are set forth below:

                                          WEIGHTED AVERAGE
                         OPTIONS       REMAINING CONTRACTUAL    WEIGHTED AVERAGE
   EXERCISE PRICES     OUTSTANDING          LIFE (YEARS)         EXERCISE PRICE
   ---------------     -----------     --------------------     ----------------
       $20.20             65,250               6                     $20.20

Prior to January 1, 2003, the Company had elected to account for its share-based
employee compensation plan in accordance with APB No. 25. In accordance with APB
No. 25, compensation expense is not recognized for employee options that have no
intrinsic value on the date of grant.



                                      F-20
<PAGE>

Share options granted for all periods prior to January 1, 2003, were accounted
for under the intrinsic value-based method as prescribed by APB No. 25.
Therefore, no compensation expense was recognized for those share options that
had no intrinsic value on the date of grant. The dilutive effect of these
options is included in the weighted average diluted shares outstanding in
accordance with Statement of Financial Accounting Standards No. 128, "Earnings
Per Share" ("SFAS No. 128").

The options outstanding as of December 31, 2004, 2003 and 2002 for grants made
prior to January 1, 2003 are set forth below:

<TABLE>
<CAPTION>

                                                                    WEIGHTED AVERAGE
                                                                  REMAINING CONTRACTUAL     WEIGHTED AVERAGE
DECEMBER 31,         EXERCISE PRICES      OPTIONS OUTSTANDING          LIFE (YEARS)          EXERCISE PRICE
-------------        ---------------      -------------------     ---------------------     ----------------
<S>                  <C>                     <C>                        <C>                     <C>
                     $20.80 - $25.65           672,540                    4                       $20.90
                     $16.58 - $28.42           422,924                    5                       $21.86
                                            ---------
    2004                                    1,095,464
                                            =========

                     $20.80 - $25.65           836,651                    5                       $20.89
                     $16.58 - $28.42           503,928                    6                       $21.88
                                            ---------
    2003                                    1,340,579
                                            =========

                     $20.80 - $25.65        1,186,519                    6                        $20.94
                     $16.58 - $28.42          559,501                    7                        $22.08
                                           ---------
    2002                                   1,746,020
                                           =========
</TABLE>

Options exercisable at December 31, 2004, 2003 and 2002 were 208,319, 227,378
and 185,976 respectively.

Had compensation cost for the options granted under the Plan prior to January 1,
2003 been determined based on fair value at the grant dates consistent with the
fair value method prescribed by SFAS No. 123, the Company's net income and
earnings per share for the years ended December 31, 2004, 2003 and 2002, would
have been the following pro forma amounts:

<TABLE>
<CAPTION>

(IN THOUSANDS, EXCEPT PER SHARE DATA)                                 2004                 2003                 2002
-------------------------------------                                 ----                 ----                 ----
<S>                                                            <C>                  <C>                  <C>
Net income, as reported                                        $63,148,687          $43,075,283          $55,451,007
Adjustment for compensation cost                                   477,685              913,393            2,092,813
                                                               -----------          -----------          -----------
Pro forma net income                                           $62,671,002          $42,161,890          $53,358,194
                                                               ===========          ===========          ===========
Earnings per share, as reported:
  Basic                                                              $1.40                $0.97                $1.27
  Diluted                                                            $1.39                $0.95                $1.21
Pro forma earnings per share:
  Basic                                                              $1.39                $0.95                $1.22
  Diluted                                                            $1.38                $0.93                $1.16
</TABLE>


                                      F-21
<PAGE>

In the preceding table, pro forma compensation expense associated with option
grants is recognized over the relevant vesting periods.

The following range assumptions were applied in determining pro forma
compensation cost:

                                    2004               2003               2002
                                    ----               ----               ----
Expected Life               1 to 7 years       1 to 7 years        1 to 7 years
Risk free interest rate    3.10% - 4.31%      1.60% - 4.32%       1.45% - 3.70%
Dividend yield             4.22% - 7.24%      4.22% - 7.24%       4.24% - 7.30%
Volatility                        16.22%             22.07%              39.96%

The effects of applying SFAS No. 123 on pro forma disclosures of net income and
earnings per share for the years ended December 31, 2004, 2003 and 2002, are not
likely to be representative of the pro forma effects on net income and earnings
per share in future years, because the assumptions used to determine the fair
value can vary significantly.

Disclosed fair values of options for the years ended December 31, 2004, 2003 and
2002, for those options granted prior to January 1, 2003, have been estimated at
the date of grant using a Black-Scholes option-pricing model. The Black-Scholes
option model was developed for use in estimating the fair value of traded
options that have no vesting restrictions and are fully transferable. In
addition, option valuation models require the input of highly subjective
assumptions, including the expected share price volatility. The Company's
options have characteristics significantly different from those of traded
options, and changes in the subjective input assumptions can materially affect
the fair value estimates. The weighted average fair values of those options
granted prior to January 1, 2003 were $2.12, $2.79 and $4.85 for the years ended
December 31, 2004, 2003 and 2002, respectively.

NOTE 13: RESTRICTED SHARES

On June 1, 2004, 20,000 restricted shares were granted to certain non-employee
directors of the Company and on August 1, 2004, 118,000 restricted shares were
granted to certain employees of the Company. These shares are subject to vesting
schedules and resale restrictions set forth in the associated Restricted Share
Agreements. Unearned compensation equivalent to the market value of the shares
at the date of grant was charged to shareholder's equity as of that date and is
being amortized over the four-year vesting period. Compensation expense
resulting from the amortization of the unearned compensation for the year ended
December 31, 2004 was $621,975.

NOTE 14: SHAREHOLDERS' VOTING RIGHTS

The Company's Bye-Laws limit the voting power of natural persons to 5%, and the
voting power of other entities, "groups" (as defined in the U.S. Securities
Exchange Act of 1934) and persons other than natural persons (legal persons) to
9.5%, of the votes attributable to the outstanding shares of the Company,
regardless of how many of our shares (including common shares) they own or
control. This restriction does not apply to parties who were shareholders
immediately before our initial public offering, including WPS II, Inc. and
certain individuals designated by the Company's Board of Directors who are
currently affiliated with the Company. Votes that could have been cast by
shareholders but for these voting restrictions are allocated to the other
holders of the common shares pro-rata based on the number of shares they hold,
except that no shareholder subject to the restrictions may receive an allocation
to the extent that it would result in the shareholder holding more than 5% (for
natural persons) or 9.5% (for legal persons, entities or groups) of the total
voting power. The Company's Board of Directors may approve the exemption of
other persons or groups from this restriction.



                                      F-22
<PAGE>

In addition, the Bye-Laws provide that no person or group (other than WPS II,
Inc. or its affiliates, direct or indirect subsidiaries of the Company, certain
employee benefit plans designated by the Board of Directors which may be
established by the Company or as otherwise exempted by the Board of Directors)
deemed to be a beneficial owner of common shares may vote more than 20% of the
total number of votes attributable to the common shares outstanding.

NOTE 15: INCOME TAXES

Under current Bermuda law, the Company and its Bermuda subsidiaries are not
required to pay any Bermuda taxes on their income or capital gains. The Company
and its Bermuda subsidiaries will be exempt from such forms of taxation in
Bermuda until at least March 2016.

Income from the Company's operations in the United States and from U.S.
subsidiaries of the Company is subject to income taxes imposed by U.S.
authorities. In addition, the Company's non-U.S. subsidiaries are subject to
income taxes imposed by the jurisdictions in which those subsidiaries conduct
business.

The provision for income taxes detailed below represents the Company's estimate
of taxes on income applicable to all jurisdictions and is calculated at rates
equal to the statutory income tax rate in each jurisdiction.

The income tax provision/(benefit), all current, for the years ended December
31, 2004, 2003 and 2002 is as follows:

                                     2004             2003             2002
                                  -----------      -----------     ----------
          U.S.:
          Federal                 $ 6,279,761      $ 5,046,492     $ 4,928,254
          State and local           1,562,487        1,600,296       1,437,829
                                  -----------      -----------     -----------
                                    7,842,248        6,646,788       6,366,083
          Other:                        9,527        (663,521)          15,116
                                     --------     ------------     -----------
                                  $ 7,851,775      $ 5,983,267     $ 6,381,199
                                  ===========      ===========     ===========

NOTE 16: PENSION BENEFITS

The Company sponsors both a defined contribution profit-sharing plan (including
a 401(k) feature) and a defined contribution money-purchase plan in the U.S. The
Company also sponsors similar defined contribution retirement plans in both
Bermuda and the United Kingdom. These plans cover substantially all employees
who meet the minimum age, service and eligibility requirements.

Total employer contributions amounted to $1,535,787, $1,486,044 and $1,259,929
for the years ended December 31, 2004, 2003 and 2002, respectively. Participants
are immediately vested in their account balances.


NOTE 17: LEASE COMMITMENTS

The Company has several lease agreements in various locations including Bermuda,
New York, Maine, London, Curacao and The Netherlands. The lease agreements are
for various periods through December 31, 2021. The leases are subject to
escalation charges based on increases in real estate taxes and maintenance
costs.



                                      F-23
<PAGE>

Future minimum rental commitments under non-cancellable operating leases in
effect as of December 31, 2004 were as follows:

         2005                                  $  2,983,734
         2006                                     2,774,616
         2007                                     2,774,616
         2008                                     1,002,242
         2009                                       963,888
         Thereafter (through 2021)                5,536,694
                                               ------------
                                               $ 16,035,790
                                               ============

Total rent expense for all operating leases was $2,909,452, $2,834,537 and
$2,525,139, for the years ended December 31, 2004, 2003 and 2002, respectively.

Included in the table above is an annual amount of $180,000 and an aggregate
17-year total commitment amount of $2,970,000 payable to Kirk Management Ltd., a
40% unconsolidated affiliate of the Company, which owns Trinity Hall, the
Company's headquarters in Hamilton, Bermuda. In addition, included in the table
above is a one-year commitment amount of approximately $209,000 payable to a
company owned by the former principals of TPR.

NOTE 18: GEOGRAPHIC AREA DATA

The Company's primary business is the provision of investment advisory services
to clients located throughout the world, in primarily two geographic areas, as
follows:

                                           Fee Revenue
                                           -----------

                            2004               2003              2002
                        ------------      -------------      ------------
          U.S.          $ 76,129,771      $  70,657,079      $ 79,095,944
          Non-U.S.        39,875,729         23,405,259        26,322,834
                        ------------      -------------      ------------
          Total         $116,005,500      $  94,062,338      $105,418,778
                        ============      =============      ============

NOTE 19: SUBSEQUENT EVENTS

On January 3, 2005, the Company declared a dividend of $0.30 per share to
shareholders of record as of January 14, 2005, payable on January 28, 2005 in
the aggregate amount of $13,839,599.

On January 3, 2005, 18,535 restricted shares were granted to certain employees
of the Company and on February 9, 2005, 19,500 restricted shares were granted to
certain non-employee directors of the Company. These shares are subject to
vesting schedules and resale restrictions set forth in the associated Restricted
Share Agreements.

During the months of January and February 2005, 4,950 and 200 vested employee
share options granted in 2001 and 2002, respectively, were exercised for an
aggregate purchase price of $106,276.


                                      F-24
<PAGE>


SIGNATURES

         The Registrant hereby certifies that it meets all of the requirements
for filing on Form 20-F and that it has duly caused and authorized the
undersigned to sign this annual report on its behalf.


                                                   W.P. STEWART & CO., LTD.



                                                   By:  /s/ John C. Russell
                                                       -------------------------
                                                       Name: John C. Russell
                                                       Title: Managing Director

Date:  March 16, 2005



<PAGE>


                                INDEX TO EXHIBITS


NUMBER     EXHIBIT
--------   --------------------------------------------------------------------
8.1        Subsidiaries of the Registrant
12.1       Certification pursuant to Rule 13a-14(a) of the Securities
           Exchange Act of 1934
12.2       Certification pursuant to Rule 13a-14(a) of the Securities
           Exchange Act of 1934
13.1       Certification pursuant to Rule 13a-14(b) and 18 U.S.C. 1350, as
           adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
13.2       Certification pursuant to Rule 13a-14(b) and 18 U.S.C. 1350, as
           adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
14.1       Consent of PricewaterhouseCoopers LLP