Redefine Your Path

Because it's time to simplify.


Most people we talk with have come to the realization that they are paying twice what they should for the management of their financial situation and are concerned about the conflicts associated with the advice they are receiving.

The common denominator is a desire to gain a better understanding of what’s really going on.

Our objective is simply to allow each client with whom we are privileged enough to work, the opportunity to own their future. We boil down the intentionally complex into easy to understand elements of wealth building. Through an educational process, this site is dedicated to helping you redefine your path.

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Simplifying the Process

Allow us to simplify the intentionally complicated process of building and preserving your wealth into three critical elements:

1. Save more, spend less
2. Preserve your accumulated wealth
3. Reduce the cost of the advice you are receiving

While the first element ‘save more, spend less’, is impossible to argue, many advisors will argue the latter two points.  Many advisors profess growth over preservation and justify their high fees and commissions on the basis of their unique ability to pick investment vehicles that better your chances of achieving that growth.  

But, in the justification of their fees, are they properly aligning the risk of your investment portfolio with your measured preference for risk?  Has your preference for risk ever been formally measured?  


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Consider reasons why advisors might argue these latter two points.  Could it be they are doing so to preserve and enhance their income rather than your wealth? 

All while you take on the elevated risk in pursuit of returns that may, assuming they perform as planned, justify the fees they charge or the commissions you endure.  It has long been our opinion there are inherent conflicts of interest baked into the financial planning and investment advisory business.  So much so that the federal government formulated a regulation that essentially says ‘where retirement investments are concerned, you must act in your client’s best interest’.  

Why stop there?  Why not force a fiduciary standard that places client interests ahead of advisor’s interests?  In our opinion, this is largely due to the influence imposed by the insurance and investment lobbies.  Insurance policies and investment products are sold not bought and the brokers who sell these products are paid handsomely for their efforts.  

And, while often legally disclosed, the disclosures of the underlying costs associated with these products are buried in the descriptions by design. 

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You Must Understand The Risks

There are institutionally imposed risks exerting themselves within your investment vehicles as well. You see, mutual funds have become an accepted part of the investment tapestry.  

For example, they are the investment vehicle of choice within every 401(k) plan in the country.  Mutual funds are big business!  But most investors don’t understand how they work and therefore may be overlooking major risk factors.  As an investor, it is important to understand not only the investment strategy of the mutual fund in which you invest but the risks as well. 

Most investors have a cursory understanding of investment risk—the fact that investments both gain and lose money and that there is no guarantee of performance.  

These disclosures are everywhere.  Where investor understanding falls short in our experience is in the area of how these vehicles actually work.  This is where we would like to convey a bit of knowledge.

Mutual funds are governed by a written document called a prospectus.  Within the prospectus you’ll find information about fees, investment objective, risks etc.  Most never take the time to read these tissue paper filled documents and it has been our experience that, when they do take the time to read the prospectus, they stop after understanding the fees, investment objective and risks.  

What most do not take the time to understand is that these prospectus documents also contain restrictions on the manager.  Restrictions as to how the fund may be allocated at any point in time.  Restrictions as to how much the manager may invest in stocks, bonds, cash etc.  

Why is this Important?

The restrictions imposed on mutual fund managers are of concern to you because the restrictions create an institutional risk that arises when a series of investors choose to redeem their shares of the fund.  

Because the manager has a restriction on how much cash they may have on hand at any given time, there may be insufficient cash with which to pay the investors redeeming their shares.  This requires the mutual fund manager to liquidate holdings within their investment portfolio both to pay out the investors vacating the fund and to realign their mandated allocation to stocks, bonds, cash etc.  

Now, while this may not sound all that alarming, consider the reason why a series of investors may choose to redeem their shares of the mutual fund.  Maybe they are spooked for some reason and are interested in protecting the value of their investments.  

Here’s the problem—Once this process starts, and investors that may have been spooked for some reason begin selling out of the mutual fund, other investors that may also have concern about the markets may see the fund value drop the following day.  If those investors now choose to redeem their shares the negative feedback loop that is the cause of major market corrections could ensue.  

You must understand what you own, why you own it and how you expect it to behave the next time problems arise—so you don’t inadvertently become a victim of the system.  

We believe it’s time to redefine your path.

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It’s Time for a New Approach

It’s time for an approach that focuses on educating you as a consumer instead of deceiving you with all too common sales tactics.  

It’s time to eliminate the 60 page so called ‘financial plans’ the advisors themselves cannot explain.  

Let’s boil all these concepts down to a simple conversation that begins with an understanding of where you are today, progresses through actionable items that will help you redefine your path forward and adds a layer of accountability ensuring you remain on track.

Now, we may be among the first to tell you that your goals are way too lofty but, that’s the deal.  We are going to be completely honest with you about where you are and assess the likelihood of you reaching your goals.  

If your goals are too lofty, we’ll help you adjust them to reflect those that are more realistic. If you’d prefer to remain in fantasyland, there’s no need to read further.  But, if you’re looking to engage in a discussion that is based in reality, read on.

The Landscape is Changing

We find ourselves in uncharted waters.  Governments around the globe including ours here in the United States are conducting economic experiments.  Zero Interest rate policies. Negative interest rate policies.  Currency buy-back programs.  We’d like to see historical evidence that any of these programs have produced sustainable economic growth.  

The fact is, there is no evidence of this as it is the first time in history these tools have been introduced.  To make matters worse, the real economy appears to be crumbling away rather than improving.  

What do we mean?  Let’s take a step back and observe the forest rather than staring at the trees themselves.

There are a few important big picture issues that we’d like you to consider as they may impact your future:

1. Pensions are underfunded
2. Healthcare costs are rising
3. Social Security isn’t viable

While the uninformed will argue these points until the polar ice caps melt, these are all systemic issues that require attention.  Here’s the cold hard truth—the only way you avoid these issues is for you to insulate yourself from them.

But, first, you must understand them.  Let’s start with a simple lesson in economics.  We promise, it will help you redefine your path.

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A Simple Lesson in Economics

Allow us to condense a doctorate in economics into a paragraph that will help you better understand the evolving situation you face.  

There is a single common thread that runs through the issues with the pension system, rising healthcare costs and the viability of social security:
There will soon be more retirees in the United States than there are employed individuals. 
Let us underscore this by sharing that when retirees in the United States outweigh employed individuals, there simply isn’t enough money pouring into pension plans and the Social Security system to allow them to continue making payments to recipients.  

Put simply, the system is bankrupt and we all know and accept that as fact.

Ok, it’s going to take a couple paragraphs to really explain this but we feel it’s worthwhile. Stick with us.  

Let’s expand on the pension issue a bit further because when we mention pensions to most people, they envision the smoke filled conference rooms of the giant companies that occupy the Dow Jones Industrial Average and the highly paid executives with fat pension checks arriving in the mailbox. 

While these pensions are in jeopardy, these giant companies have taken initial corrective measures to rectify the issue—like not allowing new employees to participate in the pension.  This contains the pension liability.

And, these companies do generate profits which can be diverted to help offset the pension liabilities.  

The significantly larger issue rests in the municipal pensions.  Those that depend fully on real estate tax revenue for survival.  This is where we see the iceberg emerging. 

You see, with retirees soon outnumbering employed individuals, two things occur:
1. Contributions to these pension plans are outweighed by distributions
2. Retirees lack sufficient income to sustain ever increasing real estate taxes
So what happens?  Let’s use the northeast as an example.  Retirees from the northeast move to the southeast in search of both warmth and a lower cost of living.

The result?  Home values in the northeast, the values the real estate tax revenue is based on, become static or decline.  This creates an unrecoverable situation.  We know, depressing right?  Ready to feel better?  

Here's a Refreshing Approach

You must leverage your power to extract yourself from this negative feedback loop.  But how?  Recognize that not everyone will suffer in this environment—some will prosper.  Isn’t that the way it works?  Wealth is reserved for the few while the many remain largely penniless.  

The question really is: How do you become a part of the few rather than the many?  

We’re going to let you in on a little secret that your current advisor doesn’t even know about wealth creation.  More than 90% of all millionaires and billionaires created their wealth through real estate and private enterprise.  Less than 10% created their wealth in the investment markets.  

And where are you trying to create your wealth?  The investment markets.  Why?  

Because your current advisor probably doesn’t know any more about wealth creation than you do.  In addition, what you and your current advisor probably don’t realize is, like casino odds in Las Vegas, the deck is stacked so heavily against you from the start that you have no chance.  Unless, you begin to approach this differently.
We tell everyone that will listen the following:
1. You will retire with what you save
2. The investment markets may help or hinder you in your pursuit of retirement
You see, the amount you save really determines what you will have in the future, not some magic investment product or insurance policy.  The pace at which you save coupled with how soon you begin determines whether you will be among the few that have wealth or the many that do not.  And, how you invest that wealth will determine whether you preserve it and build upon it or not.  

Pretty simple right?


A Word About Advisory Fees

Well, five words: You’re paying way too much!


Determine how much Wealth Management Oversight™ and Proactive Tax Management™ could save you in advisory fees alone.

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More on Advisory Fees

Now, let’s also touch upon our belief that these advisory fees should be viewed not as a function of investment return but rather as a fee for service provided.  This is an uncomfortable discussion for many financial advisors as they really aren’t doing much for you.  

Sure they’re nice enough and you’ve been with them for years but are they really able to justify what they are charging you for their ‘advice’?  Maybe you’re among the few that have a great advisor—there are some that really do care enough to put your interests ahead of their own, to help you along your journey.  

But, we feel you should critically review your advisory relationship just like you review other service oriented relationships in your life.  Are you getting what you’re paying for?

Where advisory fees are concerned, they should be viewed through the prism of: ‘How much is my advisor helping me to better position myself for the future’.  Not through investment performance as much of that is really market driven but rather wholly from a service perspective.  

After all, financial advice really is a service. Ask yourself the following questions: 
1. Is my financial advisor really engaged with me on an individual level?
2. How well does my financial advisor understand my goals?
3. Is my financial advisor instrumental in the pursuit of my goals? 
4. Is my financial advisor holding me accountable in the accumulation of or preservation of my accumulated net worth?


Take the Next Step

If you’re unsure about the answers to any of these questions or want to better understand your financial future, we’d like to suggest you pursue an Objective Second Opinion™ with us.

Our process is simple, we seek first to understand what you are trying to accomplish and then provide you with an objective set of observations that will help you see your path more clearly.  After you understand our observations, a determination can be made if and to what extent you would like to leverage our services to guide you going forward.  There is no catch, and there are no surprises.   

About Fieldstone Financial

Fieldstone Financial is a 20-year-old financial advisory firm headquartered in Foxboro, Massachusetts.  While we generally provide our Objective Second Opinion™ reviews by leveraging our technology, our strategically placed client service locations throughout the country often allow face to face meetings for more complex situations.  

We’re here to help you redefine your path.