STA Wealth Management is a financial advisor firm headquartered in Houston, Texas with about $930 million in assets under management. The firm works with a range of individuals, wealthy individuals, corporations, pensions and charitable organizations. It has an account minimum of $500,000.
With 15 years under its belt in the Houston area, STA Wealth Management has grown to serve more than 950 clients. The firm provides a range of services including investment management, financial planning and consulting services.
STA Wealth Management Background
STA Wealth Management was founded in 2003 by Luke Patterson and Michael Smith. Today, Patterson serves as CEO and chief investment officer (CIO) and Smith serves as president of the firm. Over the last 15 years, the firm has opened a second office in nearby Sugar Land, Texas and grown its client base to more than 950. The firm has more than $930 million in assets under management.
What Types of Clients Does STA Wealth Management Accept?
STA Wealth Management works with individuals, high net worth individuals, pooled investment vehicles, pension and profit sharing plans, charitable organizations, and corporations.
STA Wealth Management Minimum Account Sizes
STA Wealth Management generally requires that clients have a minimum of $500,000 for investment advisory services. STA may choose to waive this minimum or charge a lower fee at its sole discretion.
Services Offered by STA Wealth Management
STA Wealth Management provides a typical collection of services to its clients, including the following:
- Investment Management
- Hedged Tactical Equity Strategy
- Core Options Strategy
- Investment Management Wrap Fee Program
- Financial Planning
- Consulting Services
- STA Wealth Management Investment Philosophy
STA Wealth Management Investment Philosophy
STA Wealth Management relies on a combination of charting, fundamental analysis and technical analysis when it comes to analyzing investments for clients. The firm also combines long-term purchasing, short-term purchasing and trading strategies when managing client portfolios. With all portfolios, STA looks to achieve high returns and below-average volatility with a process that’s both research-driven and repeatable.
Fees Under STA Wealth Management
Investment management fees at STA Wealth Management typically adhere to the following schedule, although the firm may negotiate a different fee at its discretion.
|Fee Schedule for Managed Accounts*|
|Assets Under Management||Fee Percentage|
|$500,000 - $749,999||1.50%|
|$750,000 - $999,999||1.35%|
|$1,000,000 and above||1.25%|
These fees are paid quarterly, either in advance or in arrears, depending on the advisor. Fees are typically calculated based on your total assets on the last business day of the preceding quarter.
Financial planning or consulting fees can vary widely depending on the specifics of your situation. They generally fall between $2,000 and $30,000 as a one-time fee or $150 and $350 as an hourly fee. STA Wealth Management advisors don't earn performance-based fees. The below table shows how STA Wealth Management's fees compare to the national median. Remember that these are only estimates and actual fees may vary.
|Estimated Fee Comparison*|
|Your Assets||STA Wealth Management||National Median Advisory Fees**|
|$1MM||$13,500||$8,500 - $10,000|
|$5MM||$62,500||$25,000 - $32,500|
|*Fee estimates only consider the maximum base fees for the services each firm provides. You may also pay manager fees and other fees, which can vary in amount. **All figures are based on median fee levels according to Bob Veres' 2017 Planning Profession Fee Survey. The above estimates solely take into account AUM-only fees. Total costs will likely be higher due to additional expenses.|
The firm also offers a wrap fee program, in which clients pay a single fee that encompasses all fees, including those for brokerage transactions and custodial services. This simplifies things and allows clients to know exactly what they'll be paying in fees. However, the firm notes in its SEC disclosure that participating in the wrap fee program could result in paying higher fees than if you purchased the services a la carte. If you take part in the firm’s wrap fee program, you’ll pay fees monthly instead of quarterly.
What to Watch out For
Some advisors at STA Wealth Management are independently registered representatives of a broker-dealer, meaning they can earn commissions on certain security transactions. This could create a potential conflict of interest since these representatives will have an incentive to recommend or enact transactions that would generate commissions.
Further, the firm's principals, Luke Patterson and Michael Smith, own and are licensed agents of STA Insurance Agency LLC. If clients choose to purchase insurance products (including life insurance and annuities) from STA Insurance, that would both generally benefit and generate commissions for Patterson or Smith. This creates another conflict of interest because there is an incentive to recommend insurance products.
Finally, STA Wealth Management sponsors a number of private investment funds that it also manages. STA may occasionally recommend that certain clients invest in these funds, which creates a potential conflict of interest. The firm has an incentive to grow the funds as much as possible since doing so would increase its own compensation. Despite these potential conflicts of interest, STA Wealth Management is bound by fiduciary duty to act in its clients’ best interest.
STA Wealth Management has one disclosure involving its CIO, Luke Patterson. In 2002, Patterson received a forgivable loan from his employer at the time. Three years later, the employer filed an arbitration proceeding to collect a portion of the loan that hadn’t been forgiven, but since Patterson had moved away by that time, he didn’t receive notice of the arbitration and didn’t appear at the proceeding. This led to a temporary suspension of his National Association of Securities Dealers (NASD) registration. In 2011, once Patterson learned of what had happened, he contacted the former employer and settled the matter, and his suspension was lifted.
Opening an Account With STA Wealth Management
You can start the process of opening an account with STA Wealth Management a few different ways. You can visit either office in person to either speak with an advisor or set up an appointment to do so. You can also call the Houston office at (281) 822-8800 or the Sugar Land office at (281) 652-5303. If you’d prefer to contact the firm online, you can email firstname.lastname@example.org or fill out the contact form on the firm’s website.
Where Is STA Wealth Management Located?
STA Wealth Management is located in Citycentre Plaza, which is near the intersection of the Sam Houston Tollway and Interstate 10 in Houston, Texas. The firm also has a second office on Dairy Ashford Road off Route 90 in Sugar Land, Texas.
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