Paul Mauro • Westboro, MA
Legacy Financial Advisors, Inc. • SII Investments, Inc.

Paul Mauro, managing partner of Legacy Financial Advisors, Inc., has an extensive track record of helping families and business owners with a wide variety of financial-planning needs—including those needs that only come to be recognized after his firm’s extensive fact-finding and planning process.

Mauro has a deep understanding of the evolution of the financial-services industry and a commitment to staying at the forefront of all elements of today’s technology and client service. This began with his pursuit of the CLU and ChFC designations years ago, and he was one of the early graduates of American College’s comprehensive financial-planning program.

His commitment has extended now to rapid and continuing growth for his Boston-area advisory firm, which employs around 30 professionals at all levels and has roughly $700 million in assets under management.

Half-jokingly he says, after four decades in the business, “You spend your first 10 years convincing clients you are mature enough to handle their accounts, the last 10 years explaining that you are not too old, and the remainder in between really growing your business.”

Fueling that rapid growth has been an emphasis on a full-service practice centered on five core competencies: investment management, risk management, cash-flow planning, estate planning, and tax management.

Mauro says, “Because of our history and great bench strength in skilled advisors, just about every really substantial client that we have has been a homegrown client—counter to the trend in the industry today to essentially skip the first 30 years of a client’s life and go right to the pre-retirees and 60-year-olds.

“We can speak with some authority about having taken our clients through the process for many years, and having experienced many different market environments. Of course, we will work with new clients approaching retirement, but, honestly, it is a lot more effective to manage clients from a younger age all the way through. Our ‘legacy clients’ are well-prepared for retirement.”

Mauro gives a lot of credit for that preparation to his firm’s focus on active investment management. He broadly says, “We utilize active management because we are risk managers. Risk first, always. Downhill ski racing is probably the best example of how trying to go too fast and crashing does not get you the gold.

“We want all of our clients to get the gold in their finances, in more ways than one, and that requires getting through all of the gates in their downhill ski to glide into retirement. It usually begins with a discussion of risk management and how implementing active management can help them avoid those disastrous crashes.”

“We want all of our clients to get the gold in their finances, in more ways than one …”

While Mauro will on occasion use a range of some passive investing strategies and income-generating tools, he believes, “Active management is absolutely necessary for what we call ‘lifestyle portfolios.’ Active management for a 40-year-old client who’s an accumulator is very different than the active management for a 70-year-old income distributor which, in turn, can be very different from a 60-year-old pre-retiree.

“While one may have a heavy emphasis on an actively managed equity portfolio, another might require more of a tilt toward an actively managed fixed-income portfolio. And, of course, there are blended strategies that can cross many age groups.”

But for Legacy, the real differentiator of their process comes down to the selection of third-party money managers. For the more affluent client, their approach allows access to what they consider some of the best money managers in America on a very preferential basis, giving Legacy the opportunity to develop custom financial programs that meet the unique needs of these clients. Mauro says, “I think active management is a critical part of everybody’s portfolio at different stages, but it requires access to numerous third-party managers. Our clients all feel as if they own the Boston Red Sox. We are the coaches, and these active managers are the players.

“It’s not our job to pick stocks or sectors every day. Our job is to pick active managers that fit into each slice of the portfolio to accomplish the optimization of that one category. Whether it is a long/short bond portfolio, small-cap foreign stocks or managed futures, as examples, our goal is to put a team of all-star managers on the field.”

Legacy works closely with broker-dealer SII Investments, Inc., and calls them “a great broker-dealer for someone like me practicing active management. They exercise the due diligence at a very high level that we need and will work to both vet third-party managers on their own and review managers we recommend.”

Legacy’s selection of third-party managers is very collaborative, says Mauro. “We let our managers actively manage the daily, weekly, and monthly changes, but we take a close quarterly look at their performance.

“This approach has served our clients and us very well. Our clients who were actively in our system had a very good 2008—they were very happy, referring many, many clients to us as a result. We saw a lot of portfolios from more traditional investment firms that got very banged up. And those clients came to us.”

Mauro concludes with a few big-picture themes that help to separate his practice from the field:

“While putting together a smart retirement plan is obviously critical, I think the notion of outliving your retirement funds is entirely over-marketed. The retirement plan for most people can be managed properly.

“But there are several areas of concern that are not emphasized enough and those can derail that retirement planning. Soaring college tuitions, end-of-life health-care costs, handling the tax implications of estate planning and income distribution, and active management of 401(k) money are some of the areas that really distinguish us in our clients’ eyes. Remote asset management of those 401(k) portfolios is a major growth area and is often overlooked.

“Money requires management, no matter where it is. You cannot just ignore this and buy a target fund and go to sleep on it. You need someone running your portfolio who can capitalize on opportunities and do their best to avoid the downside dangers. You need active management on your side.”