Do you have a question about Walker Financial Advisors' business philosophy and services? Founder Scott D. Walker has the answers!
- What is the story behind the “Fee-Only Asset Management” service you provide?
- How would you describe your typical client?
- Why should an investor consider the use of a professional financial advisor?
- What investment strategy or philosophy do you follow in making recomendations to clients?
- What types of investments do you select for client portfolios?
- Why not pick up the latest issue of "Money" magazine and just buy the recommended funds?
- How much trading would a client expect to see in their account?
- What types of communication could I expect as a client of yours?
- How do you differ from other advisors?
1. What is the story behind the “Fee-Only Asset Management” service you provide?
In the early 1990’s we stopped accepting commissions from investment product providers. In order to eliminate potential conflicts of interest and align ourselves squarely with the clients’ best interests, we are paid a quarterly asset management fee based on the value of the client account. This allows us to be more objective and provides a built-in performance incentive to build the value of the account.
2. How would you describe your typical client?
We have a good mix of working professionals, business owners, executives, and affluent retired individuals. Our average client age is 60, with a portfolio of $500,000, and a net worth of $1.5 million.
3. 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. 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 with daily monitoring of investments.
4. What investment strategy or philosophy do you follow in making recomendations to clients?
We want to own only liquid marketable securities that provide the flexibility for us to easily exit a position if need be. We blend different types of non-correlated investments to control overall portfolio risk, and endeavor to minimize investment costs for our clients. Our customized asset allocation approach incorporates the current economic and interest rate environment, along with the client’s goals, time frame, risk tolerance level, and income tax position. Preservation of capital is an overriding objective for all accounts.
5. What types of investments do you select for client portfolios?
We utilize only liquid marketable securities. Individual common stocks and bonds (U.S. Treasuries, Municipals, Corporates), along with exchange-traded funds (ETF’s) and no-load open end funds are used to construct client portfolios. Income-generating investments are typically placed in IRA or tax-deferred accounts, while growth investments are more prevalent in non-qualified trust accounts. We prefer individual stocks and ETF’s for taxable brokerage accounts due to their greater tax-efficiency. We seek to own best of breed companies across different industries, and we are continually on the look-out for opportunities to upgrade holdings.
6. 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.
7. 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.
8. 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 sends a monthly statement directly to each client, along with trade confirmations for each buy or sell transaction.
9. How do you differ from other advisors?
We are a smaller local firm where clients have direct access and communication with the investment professional that is calling the shots on their portfolio. We have no monthly product quotas that are often found with major brokerage firms. As Certified Financial Planner professionals we provide individualized service and can answer questions relating to income tax, retirement and estate planning, and employee benefits. We are happy to work with the client’s CPA or attorney to coordinate efforts to meet the client’s objectives.
