WELCOME TO STA Wealth Management Since the founding of STA Wealth Management in 2002 by experienced financial industry executives in Houston, Texas, we have focused on delivering comprehensive portfolio management services to our clients. As a growing independent asset management and wealth advisory firm, our disciplined investment approach is founded on an emphasis on risk management and a research-driven investment process that seeks dual goals: superior investment portfolio returns and below-average investment portfolio volatility. STA Wealth Management serves a wide range of clients, including high-net worth families, executives, business owners and foundations. We place the highest priority on working as a dedicated partner to our clients, continually keeping our clients educated and updated on your portfolio performance and market analysis. Our team leverages its extensive technical, financial planning and money management expertise to provide highly personalized wealth management services in developing tailored strategies that meet your needs now and for the years ahead. We invite you to learn about STA Wealth Management and our capabilities and welcome the opportunity to discuss your financial needs and goals.
CONSERVATIVE Limiting Risks to Deliver Long-Term Results At STA Wealth Management, preservation of capital has always been an important component of superior performance. Using economic, fundamental and technical analysis, we create portfolios focused on limiting downside risk to deliver long-term investment results. Centered on our conservative guiding principles, you will find a STA Wealth Management team that goes beyond the traditional advisory model through our dedication and service to every client. DISCIPLINED Repeatable and Sustainable Portfolio At STA Wealth Management, we have designed and defined our approach to portfolio management by structuring investment portfolios that conform to our distinct set of fundamental parameters. Our disciplined investment approach enables our portfolio performance to be repeatable and sustainable delivering meaningful value to our clients. DIFFERENT Customized Investment Strategy While many firms provide active portfolio management, STA Wealth Management takes a different philosophical approach to managing our clients money. Reflecting our commitment to conservative, disciplined and transparent investment approaches, we develop customized investment strategies to meet each client s unique requirements. Our team guides each client in making informed critical decisions at every step for their investments with handson, experienced service from the big picture to the last 50 feet. 1
Financial Planning Wealth Management Focused on Supporting and Protecting Your Financial Future At STA Wealth Management, you will find a firm whose financial planning process is truly different from other financial companies. We firmly believe that superior financial planning involves much more than just retirement projections, portfolio allocation, or insurance solutions. From our viewpoint, financial planning should be customized to fully realize your unique goals and vision. We take a thorough and in-depth approach to understand your situation and objectives, analyze multiple and often complex options to identify and provide appropriate solutions. Our goal is to deliver a tailored wealth management plan that is focused on supporting and protecting your financial future. We follow the disciplined financial planning process as illustrated in this graph: Step 1 > IDENTIFY Our process begins with a face-to-face meeting so that we can fully understand your current situation, needs and long-term goals. Along with this in-depth discussion, we also can assist in identifying and gathering your key documents to facilitate our discussions and planning activities. Step 4 > PROPOSE At this stage, we sit down to review with you our findings and observations. To do this, we provide a customized engagement proposal that highlights areas of concern, potential opportunities to meet your goals, and areas we feel we can add value to each planning objective. This proposal is provided to you at no cost or obligation. If you are interested in moving forward, we will, in a clear and open manner, present our financial planning agreement which will outline our cost for building, implementing and monitoring your financial plan. Our goal is to demonstrate the value we can bring to you and your family. Step 5 > RECOMMEND Once you select STA Wealth Management to serve as your financial planner, we formalize your plan with specific recommendations and develop a detailed action plan and implementation timeline. Implementation of any financial planning recommendation is entirely at the client s discretion. Step 2 > ANALYZE Following our first meeting, our planning team analyzes your family assets and objectives to determine any problems,issues, gaps, or opportunities that need further investigation. Step 3 > TEST Based on your current situation and future goals, we review multiple scenarios using state-of-art financial planning tools and web-based software to project and test possible solutions to determine the best opportunities and ideas to meet your objectives. Step 6 > IMPLEMENT One of the most important steps is implementing the ideas and strategies we have agreed upon. As needed, we coordinate with your team of advisors, attorneys and accountants to implement your planning goals. Should a financial planning client decide to use one of STA Wealth Management s advisors to manage their portfolio (s) a separate advisory agreement will be provided for that portion of the portfolio. Step 7 > UPDATE We understand that your situation and financial goals may change over time. Additionally, our team meets with you periodically to review these changes to determine any impact these changes will have on your financial plan. We also serve our clients by helping you organize your key documents and important personal data as desired on our secure financial planning website. 2
Areas of Focus A Comprehensive Understanding of Your Financial Needs and Goals STA Wealth Management s team has decades of experience in meeting and helping our clients with their financial needs. Depending upon their unique situations and objectives, our team takes the time to understand your needs and key areas to achieve your goals, which may include: Investment Planning Retirement Planning Estate Planning Business Succession Planning Asset Protection Planning Charitable Planning Tax Planning Education Planning Insurance/Risk Management Employers Benefits Planning Specific Planning Services for a Wide Range of Clients STA Wealth Management clients benefit from our team s expertise and in-depth knowledge of tailoring financial plans for a wide range of individuals, families and businesses. We bring decades of experience in understanding the complex challenges that business owners and physicians, for example, face in addressing their unique situations. We provide specialized services for some segments of our clientele, including: Executives Business Owners Retirees and those preparing for retirement High-Net Worth Individuals and Families 3
Your Customized Financial Plan The Cornerstone of Our Wealth Management Process The ultimate goal of the STA Wealth Management Process is to create a comprehensive, customized financial and investment road map that guides you and your family from where you are today to where you want to be in the years ahead. Our team takes these steps to develop your personalized map: 1 We review your objectives and goals which serve as the foundation of your road map. While many clients already have solid goals in mind, we are skilled in helping others explore, clarify and expand their objectives. We take the time needed to understand your family s needs, goals, and objectives. 2 Our team examines various models to evaluate the gaps between where you are today and where you want to be. We provide in-depth reviews of appropriate solutions to close those gaps and recommend the best options that address your unique situation and goals. 3 We then implement solutions and provide ongoing monitoring to help ensure that you are on track to meet your goals and objectives. We communicate regularly with you to review your plan and portfolio and recommend any tactical changes as required. 4
Portfolio Management The Overarching Goal: Enhancing Total Portfolio Performance While Controlling Risk STA Wealth Management s investment approach is driven by our overarching goal to enhance each client s total portfolio performance while controlling risk across all market cycles. To accomplish this goal, our team adheres to a strong set of conservative, disciplined investment fundamentals: Disciplined strategies that emphasize the long-term A focus on after-tax, total portfolio returns Global diversification and balance across multiple asset classes Given this era of increased financial complexity, an investment portfolio that is developed and actively managed by professionals is more essential than ever. To achieve the best possible results for each client, STA Wealth Management provides extensive expertise and capabilities in numerous asset classes, including equity, fixed income and alternative investments. Clients benefit from our strengths in: Investment process Asset selection Matching objectives Asset allocation Balancing risk to performance Volatility Buy/sell decisions Liquidity Capital appreciation vs. income Domestic vs. international Growth vs. value Taxation 5
Investment Process Rigorous, Repeatable and Transparent STA Wealth Management s investment process is rigorous, repeatable and transparent. Our approach is researchdriven and seeks two investment goals: superior investment portfolio returns along with below-average investment portfolio volatility. Our investment committee selects investments using a disciplined, thorough screening process. Our team weighs each position within the portfolio model relative to its specific purpose, risk and potential return metrics. The portfolio and every position within it are regularly monitored, reallocated and sold as necessary to maximize gains, reduce risk and protect the underlying investment capital. Economic Analysis Fiscal / Credit / Consumer / Monetary / Economic Market Fundamentals Momentum / Valuation / Quantitative Analysis Market Technicals Trends / Support & Resistance / Deviation / Relative Strength / Momentum Style/Sector Active vs. Passive / Domestic vs. International / Value vs. Growth Capitalization / Long vs. Short Allocation & Management Mutual Funds vs. ETF vs. Individual Securities / Yields vs. Restrictions Aggressive vs. Defensive / Benchmark vs. Peer Group Ongoing Evaluation Monitor Results / Sell Discipline / Reallocation 6
Portfolio Construction Selecting Appropriate Investments to Match Your Unique Goals To implement a client s customized investment strategy, we select appropriate investments, including equities, bonds, ETFs, mutual funds, separately managed accounts and insurance products. Depending upon a client s situation, we may also review alternative investments, such as real estate, managed futures and other appropriate investment vehicles. Guided by your circumstances, goals and comfort level with investment risk, we explore the appropriate mix of asset classes for you. Additionally, we communicate our investment strategy with you, ensuring a common understanding and consistent execution. Ultimately, our goal at STA Wealth Management is not to outperform a specific index which may require taking excessive portfolio risk. Instead, our goal is to target the returns necessary to achieve your specific investment objectives. STA Wealth Management s portfolio components include: Fixed Income Our Fixed Income makes up an important part of our overall portfolio construction. The objective of our Fixed Income portion is to achieve capital appreciation and stable income through a portfolio of fixed income credit securities, which may include corporate bonds (both investment and non-investment grade), municipal bonds, agency bonds, convertible bonds, treasuries and foreign bonds. Core Strategy Our Core Strategy portion seeks to capitalize on long-term macro-trends, deep value strategies and non-correlated asset classes aimed at developing low volatility returns. The primary asset classes include domestic equities, international and emerging equities, long-term commodity exposure (such as metals and agriculture), managed futures and currencies. The use of non-traditional asset classes provides low correlation performance opportunities. The use of alternative investments or private placements may be used as a part of the core strategy. Adding this component is not done on a discretionary basis and is subject to accreditation and/or qualification certification. Tactical Strategy Market cycles create situations which, we believe, can be short-term, mis-priced (either upside or downside) opportunities. This represents the most dynamic strategy in the portfolio. We handle risk management in the Tactical Strategy portion of the portfolio by selling the positions to reduce risk or exposure in the portfolio. Cash Cash management is an essential function of portfolio management. When our investment team believes that the risk outweighs the possible returns, cash may be raised to reduce risk of volatility. Cash may include money market and/or other cash equivalents. GROWTH GROWTH WITH INCOME BALANCED INCOME WITH GROWTH FIXED INCOME 30% 70% 25% 25% 50% 25% 40% 35% 20% 20% 60% 95% This strategy seeks to maximize capital appreciation without consideration for current income. This strategy seeks total return through a combination of capital appreciation as its primary objective and current income as its secondary objective. This strategy seeks to balance capital appreciation and current income. This strategy emphasizes current income as its primary objective with capital appreciation as its secondary objective. This strategy seeks capital appreciation and may invest in bonds or other stable value securities to achieve this goal. Portfolio allocations are subject to change based on market conditions and outlook 7
Client Services Ways We Serve You At STA Wealth Management, the cornerstone of our client services is the preservation of our clients principal, generational income and capital appreciation. For every client, we deliver a customized strategic approach to invest your money to meet your specific goals and needs. We provide our services through our team of experienced, dedicated associates who bring years of expertise, industry knowledge and technical skills. As a STA Wealth Management client, you will benefit from: Clear Expectations: Our team works in a straightforward manner, telling you what we can and cannot do for you, how our services will be delivered and how you will be charged. We know that a solid client-to-professional relationship builds trust over time and maintains a constant focus on your goals. Responsiveness: We take pride in delivering quick, accurate responses to each client s requests and issues. We value every client and take responsibility in addressing your needs with urgency and professionalism. Relationship: We understand that strong working relationships require time, open communication and commitment. Our goal is create long-term relationships with our clients across market cycles and generations. To accomplish this, we strongly encourage our clients to keep an open communication with us, letting us know if there are changes in your lifestyle, goals or expectations that could involve adjustments in your portfolio. A Professional Client Services Team While many investment companies offer a single advisor to handle your account, STA Wealth Management provides a complete team of investment, planning and service professionals to address your requirements. Whatever your needs from asset management to research to portfolio modeling to cash management to paperwork and forms, an experienced team member is available to assist you in a professional and responsive manner. We take every step such as streamlining the account opening process and making it easier to access your accounts to simplify your financial life and give you the highest level of superior customer service. Dynamic Portfolio Performance Reporting STA Wealth Management s clients can view continually updated portfolio performance across all of their accounts as a household or individually. Our system enables you to track your portfolio asset allocation and performance as well as view a detailed bond analysis to stay updated on all your investments. Our goal is to ensure your privacy and security and provide you with full access to your accounts. Our services for clients include, but are not limited to: Custodian management through Fidelity Investments, Charles Schwab and Millennium Trust File maintenance Investment accounts: IRAs, taxable, limited partnerships, trusts, self-directed 401(k)s Account transfers Account maintenance Dedicated customer service team to meet all cashiering and scheduling needs 8
Scott A. Bishop CPA, CFP Director of Financial Planning 800 Town & Country Blvd. Suite 410 Houston, TX 77024 phone (713) 600-9000 office (281) 822-8800 fax (713) 600-9001 scott@stawealth.com
800 Town & Country Blvd. Suite 410 Houston, TX 77024 phone (281) 822-8800 free (888) 988-8308 fax (713) 275-2999 www.stawealth.com DISCLAIMER: Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended and/or undertaken by STA Wealth Management, LLC), or any non-investment related services, will be profitable, equal any historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. STA Wealth Management, LLC is neither a law firm nor accounting firm, and no portion of its services should be construed as legal or accounting advice. Please remember that it remains your responsibility to advise STA Wealth Management, LLC, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. A copy of our current written disclosure statement discussing our advisory services and fees is available upon request. The scope of the services to be provided depends upon the terms of the engagement.