As a smaller Austin firm that’s part of a larger entity, WorthPointe offers the best of both worlds – boutique-sized but with larger reach – for those with at least $500,000. The company’s small staff has decades of experience as wealth managers. The company has offices in Texas (Austin and Fort Worth) and California (San Diego and Orange County).
Who Should Use WorthPointe?
If you have at least $500,000 and are based in Texas or Southern California, you’re the right demographic for WorthPointe. The company operates with modern portfolio theory in mind. That means if you believe in the award-winning economic model that advocates diversification across asset classes, you’re aligned with how WorthPointe would invest your assets.
Potential clients should also want to work with a smaller firm. WorthPointe has a smaller staff than many competitors in Austin, yet has the sixth-most assets under management. A smaller staff size might mean that you get to know everyone, rather than just your advisor. However, if you’d prefer the team approach with experts on multiple aspects of financial planning, you might be better served somewhere larger, such as Per Stirling.
The company is also tech-savvy. If you enjoy keeping an eye on your investments, you’ll find WorthPointe 360, an online dashboard to monitor your investments, easy-to-use and convenient on the go.
According a Morgan Smith, a partner at Worthpointe, you should consider getting a financial advisor when:
- You want to get an early start with the discipline of budgeting and saving.
- You are too busy with life and cannot be diligent in constant management of your financial affairs.
- You have enough assets to know you need to be smart and tax-efficient with your decisions.
- You are contemplating retirement and want to understand their retirement picture.
- You inherit a large sum of money.
Smith goes on to say that the financial advice he'd give clients is "the essential ingredient in a successful outcome is discipline. Most people lack the expertise and are too busy to put the amount of time and effort day-in and day-out over decades needed to significantly increase their probabilities of success on their own."
What You’ll Pay in Fees
WorthPointe charges a fee based on your assets under management. The firm operates under a fee-only compensation model. This means advisors don’t make money from commissions for selling you products or services. All money comes from the flat rate fee or for financial planning hourly charges. Fee-only is the hardest standard to meet (and differs from fee-based). As a fiduciary, the company is obliged to put your best interests first.
What to Watch out for With WorthPointe
There’s no obvious downside to WorthPointe. Since it’s a fee-only fiduciary firm, client interests have to come first. And, it means that money is made from set management fees or services, rather than commissions or other product-selling incentives.
However, one potential detractor for certain clients may be the size of this firm. It’s on the small side, with only six employees. With larger firms, you have more staff specialization which could translate to more in-house expertise.
One last potential downside is that financial planning services are not included with your management fee. While this isn’t unusual (more than half of the Austin firms we researched operate under the same pricing model), it’s something that you should be aware of prior to making your financial advisor decision.
Finally, WorthPointe doesn’t make a strong case for who its ideal client is. It seems to be for the everyday professional, although Smith told SmartAsset that the firm's typical clients are doctors, attorneys, executives and families. Other firms position themselves more strongly, for example Richard P. Slaughter calls itself the firm for the sudden wealthy.
WorthPointe Advisors: What to Know
The Austin office of this firm has six employees, half are certified financial planners (CFPs), a designation that takes years of industry experience and ongoing certification requirements to maintain. However, the company doesn’t have any certified public accountants (CPAs). Some companies do have these tax and accounting experts on staff in a non-accounting role and their expertise can help. But, to be fair, WorthPointe isn’t alone in not having any on staff.
As with any advisor firm, you’ll have an initial consultation to see if you’re a good fit with the firm. The relationship will hopefully last decades, so you want to make sure you find someone you can work with for the long term.
The three WorthPointe Austin partners have over half a century of combined industry experience:
Morgan Smith has over 20 years of experience in finance and business development and has served as a fee-only advisor for over 12 years. He’s a certified financial planner (CFP) and a former naval flight officer.
Texas Monthly Magazine named Scott W. O’Brien a Five Star Professional Wealth Manager for Austin, San Antonio and the Central Texas region in 2015, 2016 and 2017. O’Brien is a CFP and the author of Evidence Based Investing. He has worked in finance since 1982.
The third partner, Kermit Johns, previously served as a managing director of his own registered investment advisory firm. A FINRA-registered broker-dealer since 1997, he also has years of experience with the financial goals and planning that same-sex couples face.
Awards and Recognitions
WorthPointe was recognized as a top 300 registered investment adviser by the Financial Times in 2017.
The company was also listed by Financial Advisor Magazine as one of the top financial planning firms in 2016.
Forbes Magazine named Joshua Wilson, chief investment officer as one of the top next generation wealth advisors in the county.
WorthPointe, like most financial advisors, has a relationship with several brokerage firms. As a client, you’re not obligated to work with any particular firm, but you will be recommended a few based on WorthPointe's prior relationships. These firms include TD Ameritrade, Schwab and Scottrade.
No advisor employed at WorthPointe has incurred a disclosure or a disciplinary action.
WorthPointe Investment Philosophy
The strategy WorthPointe stands behind is modern portfolio theory. This means a diversified portfolio with different assets in varying proportions depending on your financial objectives and the current economic outlook.
Modern portfolio theory is also what most robo-advisors use as a guiding principle, such as Betterment and Wealthfront. The economists who developed the theory were awarded a Nobel Prize, and it’s now one of the most popular investment strategies.
WorthPointe uses a fundamental analysis approach. This type of approach looks at:
- Economic conditions
- Industry outlook
- Political conditions (related to the investment)
- Historical data
- Price/earnings ratios
- General level of interest rates
- Company management
- Tax benefits
This information is gathered from annual reports and prospectuses, Security and Exchange Commission filings, press releases and financial newspapers and magazines and additional sources.
The research is used to invest your assets in the securities that WorthPointe feels have the best possibility for long-term growth.
WorthPointe Portfolio Styles
When WorthPointe builds your portfolio, it’s based on your:
- Time horizon
- Risk tolerance
- Expected rate of return
- Asset class preferences.
Your financial objectives and current financial situation will dictate how your portfolio is constructed; it’s individualized to your needs, which means there’s no cookie-cutter portfolio for every client. And, if your objectives change, your advisor can shift your portfolio to reflect that at any time.
Your portfolio is invested for long-term, not short-term, gain. That means WorthPointe also doesn’t systematically rebalance your portfolio. Instead, your advisor will make adjustments when necessary, instead of relying on an arbitrary timeline. Your portfolio is managed for downside protection along with upside gain.
WorthPointe mainly uses mutual funds as the primary investment vehicle.
Starting an Account With WorthPointe
You have the option to call (1-800-620-4243), email (firstname.lastname@example.org) or fill out an online contact form to start your relationship with WorthPointe. Appointments can be booked via the website, as well, for an in-person meeting or phone meeting.
Your first consultation will last roughly 90 minutes. During this time, you can expect to review your financial status and objectives. This could include your current investments and assets, tax planning and retirement goals. During this meeting you can get a sense of what WorthPointe offers and whether you’d like to become a client.
According to Smith, new clients meet quite frequently with advisors to fine-tune financial plans, review investment strategies and learn from investment academics or even to review a plan of action for their entire estate. On the other hand, clients who have been with WorthPointe for years only want periodic updates on their investment and meet much less frequently.
Clients can choose investment management for an annual fee. Financial planning and consulting is an additional service and comes with an hourly fee. Consulting services include business planning, estate planning, risk management, college planning, retirement planning and other options.
Once you become a client, you can monitor your investments at any time with WorthPointe’s online dashboard called WorthPointe 360. The secure platform works on your phone, tablet and computer, allowing you to monitor your money from any location with Wi-Fi.
Most financial advisors recommend checking in at least once a year, preferably in person. While that will depend on your relationship with your advisor, you’re usually more than welcome to schedule quarterly check-ins if you prefer to keep in closer contact.
What Types of Clients Does WorthPointe Accept?
The following types of clients are accepted by WorthPointe:
- High-net-worth individuals
- Pension and profit sharing plans
As mentioned earlier, Smith, one of the partners at WorthPointe Austin, stated his typical clients are doctors, attorneys, executives and families.
Where Is WorthPointe Located?
WorthPointe has locations in Austin and Fort Worth, Texas and in San Diego and Orange County in California. Additionally, WorthPointe has jurisdiction in:
- District of Columbia
- New Jersey
- New Mexico
- New York
- Puerto Rico