Where can I go to get a comparison of your performance with other investment management companies?
We publish our composite performance information on a quarterly basis in mailings to our clients. We also claim compliance with the Global Investment Performance Standards (GIPS®).
For professional advisors and others in the investment business, we report to several external database services to which we submit our performance numbers on a regular basis. Subscribers can make a comparison of a variety of firms on a true “apples to apples” basis.
Where can I find helpful information on the types of questions an advisor should be asking me?
The CFA website publishes a list of questions on its website at http://www.cfainstitute.org/aboutus/investors/tools/questions_advisers_should_ask.html.
How does a small firm like South Texas Money Management compete with larger firms?
Like many small companies, we can stay very close to our clients, understand their needs and work with them individually in a way that larger companies sometimes can’t do. Our focus is on helping individuals, individually – by managing assets prudently, communicating often and building long-term relationships. Most important, the objective is to outperform the MSCI World Index net of fees on an annualized basis over a three- to five-year period with less volatility than the index during the period.
Where do you get the research for your investment decisions?
We do independent research on each of our stock names and have a considerable array of research tools at our disposal because of today’s advanced technology. Most of the stocks we invest in are large- to mid-capitalization, providing good diversification. Our access to Wall Street research comes from a variety of sources and is comparable to that of any of the larger firms.
What is the benefit of having value and growth stocks, rather than just one or the other?
Historically, value and growth stocks have enjoyed an inverse relationship, meaning when value is up, growth is down and vice versa. This relationship is one of the only natural hedges available to investors. By having both types of stocks in our portfolio, our goal is to reduce the overall volatility of the portfolio.
Who makes the decisions as to which stocks you buy or sell for your portfolios?
Jeanie Wyatt, CFA, is our CEO and Chief Investment Officer, and ultimately responsible for all purchases or sales in each client’s portfolio. Aided by her portfolio management and research teams, she guides the investment process.
We have a team who reviews all the securities that meet our investment discipline.
Will you develop an investment plan for me?
We need to be confident our clients have reasonable expectations of what we can provide and have a good understanding of our process, so we always start with an investment plan and an understanding of your investment goals and objectives.
Asset allocation is more than a guiding principle at South Texas Money Management. By developing an individualized asset allocation strategy for each of our clients, we have the best opportunity to provide the returns they are looking for.
We review these asset allocation strategies regularly and make adjustments as needed.
We are very pleased to work with other professionals, such as your accountant or attorney, who will likely have a broader overview of your financial picture, to develop a portfolio best suited to your needs.
In particular, we work with a number of CPAs and always encourage each of our clients to have one, so we can work as a team and improve the financial management process for you.
Do you incorporate tax planning into your overall investment strategy? Will you work with my lawyer and CPA?
Tax planning is very important and, therefore, tax management is a vital aspect of all our investment accounts. We always look at the potential tax consequences of our trades and encourage all of clients to involve their other professional advisors in the investment process with us.
What is your minimum to open an account with STMM? How much do I need to open an account with you?
Typically, we work with account relationship minimums of $1,000,000 and may look at more than one account in calculating the minimum fee of $10,000 per year. Our fee schedule explains this clearly.
What are your asset management fees?
Our minimum fee is $10,000 per year, which equates to about one percent of a $1,000,000 account. As you will see on our fee schedule, for accounts larger than that, the fee is reduced on a sliding scale in proportion to the amount of assets you have under management with us.
However, we look at various factors both in deciding to accept an account and in assessing a fee. These might include the number of family members who invest with our firm, potential for growth and other factors.
What do I get for these fees?
First of all, you benefit from the wide-ranging experience of the investment professionals in our firm and the high level of service they provide for our clients. We do independent research on each of our stock names. We offer an investment discipline that is focused and to which we adhere consistently.
Specifically, your fee covers:
- Investment management
- Asset allocation management
- Quarterly performance and strategy summary reports
- Annual investment presentation upon request
- Annual written analysis of accounting holdings and performance
- Open communication.
How are fees paid – monthly, annually?
Fees are deducted from your account on a monthly basis. We work to ensure there is a sufficient cash balance in your account to cover the fees so that there is no need to liquidate assets to make these payments.
How do STMM fees compare to those of mutual funds?
Generally, mutual fund expense ratios range from under 0.20 percent to over 2 percent.
STMM fees are very competitive and, in addition, you have the benefit of a relationship with a professional advisor. Please note that STMM occasionally purchases exchange traded funds or other mutual funds, which charge special fees that are not included in the fees paid to STMM for management.
What commissions would I pay?
We are not a brokerage firm and receive no commissions on the trades that we make. However, there are commissions involved and we have worked very hard to negotiate favorable commission rates with the brokerage firms we use.
Would my account be insured?
Unlike bank accounts, investment accounts are not covered by the Federal Deposit Insurance Commission (FDIC). The insurance coverage for the safety of the assets is protected by the custodian selected by the client. For instance SIPC insurance covers brokerage firms, and the depository trust company protects the safekeeping of trust assets held by national banks.
What’s the next step if I want to open an account with South Texas Money Management? What documents do I need to bring?
It’s easy. The forms are on our website, as is a checklist of documents we need initially to get you started, such as driver’s license, social security number and financial statements that include cost basis information for your current investments.
Specifically, they are:
- Financial statements with cost basis information
- Social security number or tax identification number
- Driver’s license (for both parties if it’s a joint account)
- Trust or partnership documents (if applicable)
- Will (if applicable)
You can call us and we will either mail them to you, or we will help you download the forms and fill them out. You can reach us at 210-824-8916 in San Antonio, 361-904-0551 in Corpus Christi, 512-342-2272 in Austin, 713-683-3818 in Houston, 214-969-7088 in Dallas, or toll-free at 866-805-1385.
What if I want to transfer my account from another investment firm?
We will make this as simple as possible and work with you through the process. There may be fees with some of your funds or accounts at your current investment firm, but we do not charge to transfer your funds.
Do I have online access to my account?
You may have online access through the custodian you select to hold your assets that we manage. You will also have a client login on our website which will take you to our quarterly statement.
Do you only work with equities? What if I am interested in bonds or fixed-income investments?
STMM is a full-service investment firm. If fixed-income investments make sense, as they often do, we determine the right mix between taxable and tax-free bonds and use a variety of investment-grade or insured issuers with an emphasis on diversification.
How frequently do you meet with your clients?
Our goal is to meet with every client at least annually. Some accounts require quarterly meetings. We find that often it is a good idea to meet more frequently at the beginning of a new account relationship. It is our goal that our clients understand and feel comfortable with our process. Also, we pride ourselves on being very accessible.
How do you view and manage my retirement, annuity and mutual fund accounts?
We have an operational relationship with TIAA-CREF that allows us to view and manage clients’ retirement, annuity, and mutual fund accounts, depending on the level of authorization the client allows, through TIAA-CREF’s secure access advisor web portal.*
*South Texas Money Management, Ltd. is not sponsored by, affiliated with, or in any way related to TIAA, CREF, or any of their affiliates or subsidiaries (collectively, “TIAA-CREF”). TIAA-CREF has not reviewed and is not responsible for any of STMM’s content. Any TIAA-CREF materials or TIAA-CREF information linked or provided by STMM are based on sources TIAA-CREF believes to be reliable, but TIAA-CREF does not guarantee that such materials or information are accurate or complete. Teachers Personal Investors Services, Inc. and TIAA-CREF Individual & Institutional Services, LLC, Members FINRA/SIPC, distribute securities products.