2021 State of the Firm

By Honore Matteson on February 28, 2022

Two roads diverged in a wood,

And I-

I took the one less traveled by,

And that has made

All the difference

Robert Frost

Dear Clients and Friends of Lexington Wealth Management,

I write this update from our home on the coast of Maine on a cold, snowy winter day in early 2022.  The scene above is from my kitchen window so please forgive me if I get a bit sentimental.  Whether you have been a client from our humble beginnings, have joined us somewhere along the way or are here as a result of one of our recent mergers, I would like to express my gratitude for your partnership with us. We do not take for granted the trust you have placed in us, and we wake up every morning with “fire in our belly” to improve our offerings to you!

Our “Why” – “Reflecting Back”

When Kristine and I co-founded Lexington Wealth Management back in 2000- (then called Lexington Advisors as some of our first clients still refer to us), we had high hopes of building a firm that was much different from most others that existed at that time.  We did not want to be “stuffy and self-important” like many of our peers.  We really wanted our service to be warm, real, and to know our clients beyond their balance sheet.  If we could know and understand our clients as people, we could help make a difference in their lives. This ethos was put to the test very early on in our existence, when “9/11” occurred.  We and our clients were all devastated on so many levels.  Discussing personal finance felt wrong.  Yet on the advice from one of our clients, and a friend, who happened to be a psychologist, we sat with each client, in many cases in their kitchen, and just talked.  Not about what markets did the last time there was a major shock, not to run Monte Carlo simulations around how this event may derail their portfolios (although we did this homework in the background), but about this devastating event and how they felt. From that point on, many clients opened up and discussed their lives, their kids, their hopes, dreams and fears. Wow! We learned so much beyond the basics of their financial lives.  It was then that we learned that wealth planning is not “two dimensional” but is “three dimensional.” This “third dimension” is the emotional side of wealth.  We have come to believe integrating this “third dimension” into the planning process is the “secret ingredient” in helping you, our clients, achieve your ultimate goals. And why we believe so strongly in connecting the head and the heart of wealth management.

In those earliest startup days when Lexington was just 4 of us, me, my co-founder Kristine, Brenda, and Lina (who are all still here today and thriving), we were all 100% committed to the Buddhist saying of “how you do anything is how you do everything.”  We took the extra time to build relationships with our clients, to really get to know them on a personal level.  While this was time consuming, it was well worth the investment, as it made us more effective at what we were doing and made our jobs more meaningful.

Over the years we grew and had to figure out how to deliver the same personal experience and balance it with the growth and demands of clients and the industry. 

Why, you may ask?  We knew that to make Lexington Wealth Management a multigenerational successful firm, and to provide more sophisticated technical solutions to our ever more complex clients, we needed to start expanding our human capital.  We decided to take it slow at first, bringing in young talent and training them in the “Lexington Way.” We did not realize it at the time, but we embraced what author and business coach Simon Sinek advocates: we looked for people who “believe what we believe.” We figured out how to create a uniform client experience where that “third dimension” – the emotional side of wealth–is a key part of our culture. “Connecting the Head and Heart of Wealth Management.” Lexington does more than play lip service to this. We’ve defined our core values as a firm, hire to them and train all new team members and reward them for living up to them. Culture is everything in our view and we believe this culture provides our clients with a positive client experience.

“The Here and Now”

By 2019, Lexington had grown to about $1 billion of assets under advisement and had a core group of 15 team members and a fantastic group of clients! All was going very well on many fronts. Yet the world was changing rapidly. Client needs and wants were growing, alongside Lexington’s need for advanced technology, cyber security, more sophisticated investment solutions, and complex trust, tax, charitable planning solutions.  Our clients ranged from retirees with $1 million to families with an excess of $100 million. We found that more and more of our time was being spent on things that were necessary to run the business, yet did not directly benefit our clients.  We also knew of many other excellent practitioners in our area who were grappling with similar issues.

So we hired an investment banker to help us evaluate the marketplace and look for a partner who could help us.  We had no intension of “cashing out” or becoming a small satellite office to a massive operation.  Kristine and I are laser focused on creating a firm for clients who value the concierge level service and personal touch that we can provide.

After speaking with 21 firms, we found the perfect match in Hightower Advisors.  In fact, Kris and I had known the CEO of Hightower, Bob Oros,  for a few years prior to him joining Hightower. Hightower’s business model worked perfectly for us.  It would take on the tasks that we did not enjoy nor provide demonstrable value to our clients, yet are vital and necessary to running a firm. This has allowed us to give greater focus to our clients.  Partnering with Hightower has also provided us with resources that have accelerated our service offerings, including:

  • Access to two institutional class investment research groups—one internal to Hightower and another from a third party firm called Fiduciant. As well as Stephanie Link’s investment solutions group. We still remain fee only but accessing knowledge and resources from these teams are invaluable!
  • Access to Hightower’s Trust Services group, in addition to Schwab and Fidelity’s trust services, providing us with a range of options and solutions for clients.
  • Access to tools and technology to dig deeper for clients as needed.
  • Access to liquidity providers to help bring liquidity to shareholders of certain privately held entities.
  • Ability to offer new estate planning and trust services, to further enhance financial plans.
  • Access to bill pay services
  • Ability to introduce a business valuation service for entrepreneurs and business owners to help clients gain a holistic picture of their assets.
  • Ability to attract other wealth advisors to our practice.
  • Access to a M&A team to help us attract other strong firms in the region that are looking to join forces-

It is not in numbers, but in unity, that our great strength lies”

Thomas Paine

We are super excited to have three local firms join the LWM team this year: Marcus Investment Group, Freed Investment Group, and Thompson Wealth Management, totaling nine new employees. Our new team members have joined our wealth advising, investment committee, and operational teams, and have provided tremendous support to both new and preexisting projects, while increasing the firm’s depth and breadth of knowledge. New team members now have additional resources to serve their existing clients by taking advantage of Lexington’s resources. Lexington’s existing clients also benefit as an additional knowledge base is added to our firm!

“Strength lies in differences, not in similarities.” 

Stephen Covey

From the very beginning of our firm, we have believed that if you do what you love and do it with people you really enjoy being around, you will excel personally, professionally, and truly satisfy and delight those you work for. Culture is a key part of this.  In fact, although everyone at Lexington is responsible for our culture, we have a senior member of our management team that is directly accountable for the stateof Lexington’s culture.  As we continue to evolve and grow, we treasure the fact that we are still a boutique firm, not a hierarchical institution, and everyone’s input is valued. We have consistently honored and will continue to honor a sense of mutual respect, collegiality, challenging one another, and kindness.

Finally, we wanted to highlight two communities we have cultivated over the last several years: the Empower Women Series and our work with entrepreneurs. 

Empower Women

The Empower Women Series was created by my partner Kristine Porcaro in 2017 as a safe space for women to discuss a myriad of topics with professionals in various fields. Tackling topics ranging from Medicare and estate planning , health and wellness, caring for aging parents to managing love and relationships through the pandemic and life.  The Empower Women Series focuses on arming women with knowledge and creating meaningful conversations while providing access to resources they might otherwise not had. The Empower Women Series runs the second Tuesday of every month with a podcast following.

Entrepreneurial Services

From my youngest days, I have been involved in various entrepreneurial ventures and have loved being around entrepreneurs.  Their energy, optimism and drive is invigorating.  As talented as most entrepreneurs are with their business, I have been astonished at how little attention they pay to their own personal finances. So several years ago, I spearheaded a group within Lexington Wealth that specializes in working with entrepreneurs. Before we could start rendering advice to this group, we had to understand where they were coming from.  I joined Entrepreneurs Organization, an international organization with monthly peer-to-peer local meetings. I have also been involved with Vistage, another organization with peer-to-peer meetings and many national professionals who present to us monthly.   My involvement with these groups has been a life changing experience. The insight I have gained and passed on to our team has made us better, more empathetic advisors to this great group of people.

Our closing thoughts 

With 2022 beginning, we have reflected on who we are and our story. Connecting thehead and the heart has been our core value at Lexington Wealth Management.  It has felt incredibly timely and meaningful these past few years as we all navigate this pandemic. Looking forward into the new year, we will continue to listen to you, our valued clients. We will continue to innovate on your behalf and create new goals and objectives to better our firm and the services we provide. We look forward to continuing our relationship with you into 2022 and beyond!

With Gratitude,

Michael Tucci

CEO & Cofounder Lexington Wealth Management

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