Austin Asset, one of the first firms in Austin to offer fee-only financial services, began conducting business in 1986. The company offers wealth planning and wealth management. It serves an exclusive clientele: You need at least $1 million to become a client.
Who Should Use Austin Asset?
Families, individuals and nonprofits are the best fit for Austin Asset. The company, similar to Durbin Bennett, is a fee-only firm. This means advisors are compensated through annual fees (outlined below) rather than through selling products (such as insurance) and receiving commissions. This differs from fee-based companies, such as Century Management or Richard P. Slaughter Associates, which can earn commissions through selling or recommending products or services, in addition to their fees.
If you like working with a team, you’ll enjoy working with Austin Asset. The company advocates a team-based model during the wealth planning process. The company has more certified financial planners than many of the other companies on our top 10 Austin list. That equals a broad and deep pool of experience to help you plan your financial future.
Austin-based clients are generally the best best for this firm as it’s usually preferable to visit your advisor in person at least once a year. Most clients usually find themselves within driving distance to their advisor, but it’s certainly not a requirement. Austin Asset has jurisdiction in California along with Texas, but all representatives are based in Austin.
What You’ll Pay in Fees
Austin Asset’s fees are based on your portfolio’s value. As a fee-only company, this is how the company makes money. This means that you won’t be sold any products by the company that an advisor would be compensated for selling you. Advisors earn their pay through the yearly fee structure.
The fee percentage decreases as your portfolio value increases, but the percentages are calculated cumulatively. This means if you have $3 million in portfolio assets, the first $2 million have a 1% fee and the next $1 million adds a 0.75% fee for a total of $27,500. While it’s shown as a yearly fee, you’ll pay a portion of it each quarter.
Brokerage fees have to be paid separately. This includes transaction charges, brokerage commissions and asset-based fees. For example, if your account purchases a mutual fund from Fidelity, you will have to pay the cost of transaction to Fidelity through your account. This is the general arrangement for most financial advisor firms.
Austin Asset wealth planning is a separate service apart from wealth management and is charged as a fixed fee that typically is between $4,000 and $8,000. This service provides you with a written report that details a financial plan designed to help you achieve your financial goals and objectives.
What to Watch Out for with Austin Asset Management
Austin Asset doesn’t have any glaring red flags. It’s a fee-only company, which is the hardest standard to meet for fee structure in the financial advisor firm arena. It was also one of the first fee-only companies in the area. That means that the company culture was built on making money through a percentage of assets managed rather than commissions the entire time it’s had clients.
As for user-reviews, unfortunately, you can’t find many on sites such as Yelp or Google or Angie’s list; for the most part, people are pretty tight-lined about their money managers! That said, this company has had no disclosures, meaning it’s operated legally and its advisors haven’t broken any laws.
The fees charged by Austin Asset are in the same ballpark as comparable firms in Austin for similar services. However, Austin Asset does charge separately for financial planning services, which is not the case with all Austin advisors. Some will consider the financial planning fee as part of the management fee, but Austin Asset does not. You’ll be charged separately.
Austin Asset Advisors: What to Know
The 13 advisors at Austin Asset often work as a team, such as during the wealth planning process as well as when the committee that reviews investment choices monthly. Out of 19 total employees, Austin Asset has 13 advisors. Out of those advisors, 13 are certified financial planners (CFPs), which is an additional, time-consuming certification that has extensive requirements to obtain and keep. The company has among the most CFPs of the 10 Austin firms we profiled.
While the company is not a certified public accountant (CPA) firm (meaning it’s not licensed to provide bookkeeping services or prepare financial statements), there are four certified public accountants on staff. Usually those with CPA training are useful for help with tax planning and other accounting needs.
The company is owned by W. Eric Hehman, the CEO. Hehman was one of the youngest CFPs in the country at one point and his passion for financial planning has been constant since graduating the University of Texas at Austin with a degree in business economics.
Gregory Vanwyk, CFP, is the the executive vice president and the head of wealth planning and client relationships. He’s also a graduate of UT. Jonathan Davison, the chief investment officer and chief compliance officer, is also a CFP. Davison is a Baylor University alum and chairs the investment policy committee at Austin Asset.
Awards and Recognitions
Austin Asset was recognized by the Financial Times as one of the top 300 registered investment advisers in the country. The list was generated by grading on six broad factors that includes assets under management, asset growth, company age, industry certifications of key employees, Security and Exchange Committee compliance and online accessibility.
The company’s CEO, W. Eric Hehman, won the 2013 Austin Under 40 Award in the finance and insurance category.
Most firms have relationships with brokerage companies to help facilitate client portfolio management. Austin Asset recommends that clients work with Schwab Advisor Services, a division of Charles Schwab, or Fidelity Investments for brokerage services. While the firm states that clients aren’t required to do so, the best prices have been worked out between the two recommended companies.
Currently, no advisor who works for Austin Asset has incurred a disclosure or disciplinary action.
Austin Asset Investment Philosophy
The overarching philosophy behind Austin Asset’s investing is that there is no place for speculation and that diversification spreads risk. That means the company tries to capitalize on already existing efficiencies in the market rather than try to profit from perceived inefficiencies. Additionally, Austin Asset believes in taking more risk in equities rather than fixed income. The company also looks to invest in funds with low transaction costs and minimal portfolio turnover.
This means equity allocation is diversified globally and spread across companies, industries and asset classes. Fixed income is invested in short-term debt instruments of high quality.
Your portfolio’s asset allocation is constructed based on your risk and return goals developed during your initial discussions with an advisor. Your assets will be managed using a number of analysis methods, including:
- Asset allocation
- Mutual fund and ETF analysis
- Risks for all forms of analysis
Ultimately, your portfolio will be allocated and rebalanced to have the highest probability of meeting your financial goals outlined in your investment policy statement. Your portfolio is rebalanced when you reach a minimum or maximum tolerance level (as outlined in your statement), but not as a reactive to short-term volatility.
Austin Asset Management Portfolio Styles
Austin Asset will recommend and advise on the following types of securities your portfolio potentially might include:
- Municipal securities
- Variable life insurance
- Variable annuities
- Exchange-listed securities
- Securities traded over-the-counter
- Foreign issuers
- Corporate debt securities
- Certificates of deposit (CDs)
- Mutual fund shares
- United States governmental securities
- Options contracts on securities
Each of these investments involve different degrees of risk. Your wealth manager will keep that in mind when recommending investments to you: the recommendations will be based on your objectives, tolerance for risk, suitability and liquidity.
Before implementing the portfolio created during your investment planning discussions, your manager will look for any barriers in your existing asset holding that might prevent implementation. This could be large, unrealized capital gains, or holding requirements of company stock, among other barriers.
After identifying obstacles, your manager will determine your allocation mix based on the information you provided during your initial and follow-up discussions. Austin Asset looks at long-term purchases (holding for a year or longer) as one of its main strategies.
Starting an Account With Austin Asset
To get started working with Austin Asset, you can call (512-453-6622), email (firstname.lastname@example.org) or fill out a contact form on the company’s website . You’ll either make an appointment to discuss your financial needs in person, or decide on what remote method to use if you can’t come into the office.
For wealth management, your portfolio is based on an investment policy statement that is developed during discussions about your circumstances and goals. This means your portfolio will be guided based on factors such as growth and income objectives and capital appreciation, as well as include tax consideration.
Your advisory account is managed on a discretionary basis, which means securities are bought and sold without your active participation or consent. However, you are allowed to impose restrictions on investing in certain industry sectors, types of securities or certain securities.
If you choose to use Austin Asset’s wealth planning services, you’ll pay a separate fixed-fee for an individualized plan. You’ll meet with a team of experts at Austin Asset over six months, meeting three to six times. Together, you’ll develop a plan that covers the following areas:
- Financial goals and budget, records, personal liability and estate information.
- Tax and cash flow. This means Austin Asset will look at your historical income tax, spending and saving tendencies and your current income and tax liability.
- Investments and how alternatives would affect your portfolio.
- Insurance, including life, health, long-term care, auto, home and disability.
- Retirement strategies and goals.
- Plan for death and disability, including income, estate liquidity and dependent income needs.
- Estate plan, including wills, estate tax, power of attorney, living trusts, asset protection plans, Medicaid and nursing homes.
To develop your plan, you’ll discuss your financial outlook with an advisor. This will take place during in-depth personal interviews. Additionally, your advisor will analyze the relevant documents you supply to create the plan. Usually, you receive the plan within six months as long as you provided all the necessary information.
Austin Asset created two different proprietary tools to help you set goals and track financial performance. The Building Organized Wealth (BOW©) Model helps align your goals with an appropriate portfolio by modeling different incomes, expense and saving scenarios. The Actual Rate of Return (ARROW©) Model will track your portfolio (including assets not managed by Austin Asset) and give you an outlook of the performance against the goal you set in the BOW model.
You also have access to the online performance reporting portal. This is a secure way to review your portfolio as well as share sensitive documents with your management team. You can also download quarterly reports from this platform.
What Types of Clients Does Austin Asset Accept?
Austin Asset’s website highlights the company’s stance on who it serves. It would “rather service and delight a select number of discerning families and nonprofits than recruit the masses.” This means that the company is selective when it comes to clients. Austin Asset primarily accepts:
- Families, individuals and high-net-worth individuals
- Nonprofits and endowments
Where Is Austin Asset Located?
You can find Austin Asset between Northwest Hills and Crestview in the northern part of Austin. The company has jurisdiction in Texas and California but only has offices in Austin, Texas.