Austin Asset Management is first and foremost a financial planning firm. However, we manage in excess of $380 million for the firm's clients. Our method of management and reporting is designed to coordinate the client's goals with the day to day management of the client's money. Austin Asset Management provides the following for its investment clients: You may open your account at either Charles Schwab, T.D. Ameritrade, or Fidelity.

We believe that diversification spreads risk, that risk and return are related, and that the asset allocation decision is the primary determinant of a portfolio's risk and expected return.

We believe that investors are better rewarded for taking risk in equities rather than fixed income. The equity allocation is diversified globally, minimizing concentrations in any one company, industry, or asset class. The fixed income allocation is composed of high quality, short-term debt instruments in order to minimize interest rate and default risk.

We believe that risk as well as return must be evaluated. When selecting the individual equity components, we choose a structured investment approach over active portfolio management. Active management attempts to beat the market through stock selection, researching and buying only stocks in those companies that the manager believes will provide superior returns. Conversely, structured portfolio management is based on the science of capital markets. The equity allocation is exposed to three risk factors that academic studies have shown to produce returns: the equity risk premium, the value premium, and the small company premium. These three risk factors can explain over 96% of an equity portfolio's variation in return. Utilizing institutional share class mutual funds, the result is a total market portfolio engineered to capture these three risk premiums with low transaction costs and portfolio turnover, minimizing risks that do not add to expected returns.

Since the asset allocation decision is the primary determinant of a portfolio's risk and expected return, we monitor portfolios to keep the allocation in balance. Rebalancing will occur when an asset class reaches either the minimum or maximum allowed range. We believe that maintaining the relationship between a client's goals and their wealth should ultimately drive the asset allocation decision. Therefore, we develop an asset allocation which we believe has the highest probability of achieving that goal. Asset allocation changes are not made in an attempt to time markets or in reaction to short term volatility. Allocation changes will occur to achieve further diversification, to improve the risk return relationship, or to adjust to changes in a client's goal.

• AAMC has an Investment Policy Committee that establishes the investment philosophy. The investment philosophy is founded in Modern Portfolio Theory. The Investment Policy Committee meets monthly to review the investment philosophy. Topics include: expected returns, interest rate risk versus reinvestment rate risk, taxes, portfolio construction, Monte Carlo probability, investment performance and fund selection.
• Clients work with a CERTIFIED FINANCIAL PLANNER™ practitioner through the financial planning process to create individual strategies for each client. Investments are made consistent with the investment philosophy. Portfolios are tracked against a targeted return and asset allocation. The Portfolio Manager reviews the portfolios on a quarterly basis with the clients' CFP^® practitioner prior to being sent to our clients. Clients meet with their CFP^® practitioner at least on an annual basis to review and update the plan.
• Financial planning clients of our firm will receive an additional "Building Organized Wealth" or BOW report. It is maintained to track and graphically illustrate the clients progress towards a predefined portfolio target. Click here for a sample BOW report.
• AAMC will invest all dollars without receiving any commission.