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Do you have a question about Walker Financial Advisors' business philosophy and services? Founder Scott D. Walker has the answers!
Frequently Asked Questions
What is the story behind the "Fee Based Asset Management" that you provide?
Several years ago, I shifted the focus of the firm and decided to specialize in portfolio design and investment management. As opposed to being compensated on a commission basis, clients now pay us an ongoing management fee based upon size and growth of the account. We think this approach is better because it minimizes up-front costs for the client and focuses our effort on growing the assets, as opposed to doing transactions. It allows us to be more objective and provides a built-in performance incentive to build the value of the account.
How would you describe your typical client?
We have a good mix of working professionals and retired clients. However, the majority of our clients are over age 50 and live in Southern Orange County. Most of them have an investment objective of growth and income, with preservation of capital being a key consideration.
Why should an investor consider the use of a professional financial advisor?
There are simply too many variables to keep track of in the investment universe for most individuals. We've invested a lot of money in a Windows NT network computer system, with various databases and internet access to keep abreast of the trends and events that impact the markets. By delegating the portfolio management duties to an advisor, the client simplifies their financial life, and has more free time to pursue other interests. I think there's also a certain peace of mind knowing that their money is being professionally managed.
What investment strategy or philosophy do you follow in making recomendations to clients?
We focus in on the needs of each individual client, and ask them to complete a brief questionnaire to help us identify and assess their investment goals, time frames, and tolerance for risk. During the initial meeting we develop asset allocation guidelines which are designed to achieve the appropriate balance between stocks, for growth; bonds, for income; and cash, for stability. It may be helpful to think of it as the art of balancing risk and return. With the proper structure, asset allocation can help the client pursue their investment goals, while providing diversification to limit the impact of market volatility.
What types of investments do you select for client portfolios?
We believe no-load mutual funds should form the core of each client's portfolio, and we typically dedicate at least half of the money to this area. Through the use of the internet, information on individual securities is readily accessible. We are increasingly using individual common and preferred stocks, along with individual bonds, to capitalize upon opportunities. Initial investments are reviewed with a client prior to committing money.
Why not pick up the latest issue of "Money" magazine and just buy the recommended funds?
Be my guest. Just make sure that the fund meets your objective, and remember that it's the sailor, not the ship - meaning that the fund manager is the key, and you need to keep tabs on that. A common mistake that we see with new people coming in is a fixation on past performance, and using that as their primary screen for picking funds. We refer to that as "rear view mirror" investing. As an example, what are the chances of you safely reaching your destination if you're driving down the road and spending 70-80 percent of your time looking in the rear view mirror? Now I'm not suggesting we throw track records out the window, but let's also think about what's around the corner.
How much trading would a client expect to see in their account?
If someone's looking for a lot of action and frequent buying and selling, we're not the answer. Now that's not to say we won't make changes when a holding begins to lag its peers or we identify a better opportunity. We monitor portfolio holdings on a daily basis and we're constantly assessing relative performance.
What types of communication could I expect as a client of yours?
We send a quarterly client bulletin with our market views and portfolio commentary. Also included is a performance summary and portfolio statement that details all the holdings in the account. In addition, Schwab mails a monthly statement directly to each client, and they also mail trade confirmations to the client any time there's a buy or sell in the account.
How do you differ from other advisors?
There are a lot of good advisors out there, but from what our existing clients tell me, they like Walker Financial because we're a small, local firm where they get individualized service. We have an approved list of investments from which we custom design a portfolio for each client. Also, since Scott and Warren have passed the CFP® comprehensive exam, we can answer questions relating to income tax, retirement, and estate planning, and work with the client's CPA or attorney to coordinate efforts to meet the client's objectives.
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