Wallace Wealth Management
Scott Wallace is a CERTIFIED FINANCIAL PLANNER™ professional with more than 23 years of experience helping individuals and families achieve their short- and long-term financial goals.
In addition, Scott is a Regional Director for the Landmark region of Cetera Advisor Networks. In this capacity, Scott strives to increase regional productivity by mentoring, training and supporting independent financial advisors within his region. Scott’s objective is to help each advisor build and grow a successful practice while providing top quality service to their clients.
Committed to a higher fiduciary standard of excellence, Scott has earned the professional designation of CERTIFIED FINANCIAL PLANNERTM professional. He currently holds securities registrations including the Series 7, 24 and 63, as well as Life and Health insurance licenses.
Scott shares his time with the community by providing financial consulting and educational workshops benefiting students of all grades throughout Houston and Fort Bend Independent School Districts. To help educate business owners and employees on investing, he frequently speaks to groups offering his knowledge and opinions on the current economic environment. Scott can occasionally be heard on the radio expressing his views on pointed financial planning topics or trends within the industry.
Spending most of his childhood in Spring, Texas; Scott now resides in Katy, Texas with his wife Jenny and their two children, Joshua & Braden. Raising two young boys keep them very busy. When not in the office or attending his boys hockey games, Scott enjoys snow skiing, playing golf, or smoking brisket, ribs or any other good ole Texas BBQ at home while spending time with his family.
Assets Under Management:
Securities and advisory services offered through Cetera Advisor Networks LLC, Member FINRA/SIPC.
Cetera is under separate ownership from any other named entity.
Branch: 22322 Grand Corner Drive, Suite 125, Katy, TX 77494
Assuming that you do not go with the Vanguard service, my advice to you to to look for a CERTIFIED FINANCIAL PLANNERTM to work with. CFP® designees must not only have experience requirements, but they go through extensive training and testing in order to show proficiency in most areas of financial planning and the financial planning process. Regarding the few points you listed about your particular situation, a CFP® professional should acknowledge some of the complexities that you will be faced with and help you to navigate through them; all in your best interest.
Also, CFP® designees are held to a very high level of ethical standards and transparency. Don’t get me wrong, there are many fine men and women in this industry that are not only competent but always put the needs of the client ahead of their own.
Lastly, make sure that you interview the potential CFP® professional you intend to work with. Ask pointed questions and expect pointed answers. A solid client/advisor relationship begins with communication. Make sure they are aware of your needs and your dreams so that they can help put you in the best financial position possible for your retirement.
There are many reasons why mutual funds tend to be popular with investors. However, I’ll touch on a couple of the most glaring ones.
A mutual fund can be a basket of stocks, bonds or a combination thereof. These days, mutual funds can be even more exotic than that with portfolio managers utilizing all different types of asset classes.
The first reason they are popular is that as an investment, it spreads out risk to the investor. In the case of an all stock mutual fund, that fund may have just a few stock companies that the portfolio manager wants included inside the fund or it can contain hundreds of stock companies. Either way, the idea is that if an investor were to purchase shares of a company's stock by itself and the company goes out of business, the investor could lose their entire investment. Whereas inside a mutual fund with many other stock companies, if that same company were to go out of business, the mutual fund would not lose its entire value since it has all of the other companies to help prop it up; thereby, spreading out the risk to the investor.
Another reason is cost efficiency. For example, if a company’s stock trades for $100 per share and the investor has $10,000 to invest, not including trading or other costs, the investor would be able to purchase 100 shares and all $10,000 would be invested in one company. This does not give the investor much room for diversification.
On the other hand, in the case of a mutual fund, That same $10,000 could allow the investor to own hundreds of companies (not just one) and in most cases, mutual fund share prices tend to be lower allowing the investor to own more shares in their portfolio.
Because of their flexibility, mutual funds have become popular from novice to experienced investors.
Most investment markets move in cycles. Sometimes they’re up in value and sometimes they’re down. Whether you’re talking about the equity (stock) markets or the fixed income (bond) markets, they both experience the ebb and flow of price movement. However, in this example, I’m only going to refer to the stock market.
When investors are “bullish”, the stock market increases in value because more buying than selling is taking place in that particular market. However, over an economic period of time or due to some event, the market can start to turn “bearish” and investors will begin to see their profits and/or principal erode.
So, if an investor thinks the market is going to continue to lose value for the foreseeable future, they may decide to sell their investments that are within that market in order not to lose any more value. In this hypothetical example, the investor who owned shares of a particular stock as the market was bullish, will now sell all of those shares of stock and leave the proceeds to sit in cash until they feel it is time to re-enter the stock market.
Whether it’s stocks, bonds or any other asset class, investors can “liquidate and move to cash” when the feeling of losing money is greater than the feeling of making money.
A wrap account typically is a brokerage account that your advisor manages and chooses the investments within the account.
Firms may have variations of these accounts. For example, whereas one option provided to the client may be that their advisor can perform the duties of the portfolio manager for the account, another option might be to provide the client a turnkey solution with investment firms directly making the buy/sell decisions; which, is one of the advantages.
Either way, most of these wrap accounts are fee-based and the client is charged a percentage of the assets under management versus a commission for doing this work. Also, things such as custodial fees, ticket charges, etc. may be “wrapped” into the account and the client would not incur these extra fees.
Furthermore as an example of an advantage, a client may have an IRA account, a Roth IRA account and an account with their spouse. All three of these accounts can be wrapped together for billing and reporting purposes making it easier for the client to keep track of their investments.
Best of Luck!
There are different forms of compensation an advisor can receive. I’m surprised that after all of the time he’s been working with you, this topic was not clearly addressed. Quite frankly, this should have been a conversation between the two of you before the account was even transferred to you.
Be that as it may, investors prefer to be charged in different ways just as advisor’s business models are different from each other. Some advisors charge a commission for their services. While this may be okay for a client is in the early stages of asset gathering, it may not be appropriate for a seasoned investor. On the other hand, clients who have sizable assets or financial planning needs should really consider paying a fee rather than a commission. One percent on assets under management that are less than a million dollars tends to be the average. Anything over one million is typically discounted down.
Lastly; a couple of things to consider…
- A commission based advisor needs to place a transaction in order to receive his/her income. Make sure to understand why a transaction in your account is taking place so that it is not just to put food on your advisor’s table.
- If you are paying a fee to your advisor, make sure that you are regularly engaging in account reviews with him/her. If you have not talked or met with your advisor in over a year and they are receiving fees, that is a problem.
Most importantly, all advisors should give you full disclosure on how the account will be managed and charged. Ask questions if you are still not clear; it is your money. If you are still not getting a straight answer, it might be time to find a new advisor.