Bluestone® Financial Advisors, LLC (“Bluestone®, us, we, and ours”) is an investment advisor
formed as a Limited Liability Company under the laws of the State of Maryland. Bluestone has
been registered as an investment advisor since June 2008. Bluestone was formed for the
purpose of providing investment and non-investment advisory services to entrepreneurs.
Bluestone is owned by Andrew S. Cosgrove.
We serve as personal CFO to entrepreneurs. Similar to a business CFO, our personal CFO work
focuses on four key areas:
• Supporting the entrepreneur’s long-term financial strategy;
• Capital allocation;
• Risk management; and
• Reporting and financial organization.
Advisory services include financial planning, consulting, and may include investment
management. Advisory services are unique to each entrepreneur but generally include some
combination of review, analysis, recommendations, and planning. Client deliverables capture
information about each client’s circumstances, communicate recommendations, and facilitate
planning and goal setting.
Financial planning and consulting services do not involve the active management of client
investment accounts, but instead are typically more comprehensive so as to focus on a client’s
overall financial situation. Non-investment related advisory services are offered for cash
management, business assets, real estate, personal insurance, estate and business succession
planning, and health management. Our primary focus is on ensuring that planning and actions
for each of these asset types is appropriate in the context of the other asset types that make up
the client’s net worth.
Services are offered on a fixed fee basis. This compensation model has been carefully chosen
and is a very important part of the Bluestone’s approach. From the client’s perspective, we
think it is the preferred approach for mitigation of conflicts of interest when delivering advisory
services across a broad range of asset types.
Description of Advisory Services
Personal CFO services are offered in two different ways:
(1) Project (“Financing Planning & Consulting”):
• Includes planning services but does not include investment management
• Services are provided over a short time period (typically 90-120 days)
• Client pays a one-time fixed fee
(2) Retainer (“Financial Advisory”):
• Includes planning services and may include investment management
• Services continue for as long as the client elects (typically multi-year service period)
• Client pays a fixed fee each month
We generally recommend that you engage us for the Project service prior to engaging us for the
Retainer service. This allows you to evaluate us, and vice versa, over a relatively short period of
time prior to entering into the Retainer service. While there is no time commitment required of
you in engaging us under the Retainer service and you are free to terminate at any time, it is
generally anticipated that services will be provided under the Retainer service over a time
period that is substantially longer than for the Project service.
Additional Information Regarding Advisory Services
As part of our review of each asset type, we may make recommendations for resources and
services provided by independent third parties, if, in our opinion, such resources may assist the
entrepreneur in achieving their stated objectives. Resources may include accountants,
attorneys, real estate professionals, consultants, private health advisory firms, etc. Under no
circumstances do we receive compensation from any independent third-party resource or
service.
In performing advisory services, we are not required to verify any information received from
you or from your other professionals (e.g., attorney, accountant, etc.) and we are expressly
authorized to rely on such information. We may recommend that you use us and/or other
professionals to implement recommendations provided by us. A conflict of interest exists
whenever we recommend our own services. You are under no obligation to act upon any of the
recommendations made by us or to engage the services of any recommended professional,
including the services offered by us. You retain absolute discretion over all implementation
decisions, and you are free to accept or reject any of our recommendations. Moreover, you are
advised that it remains your responsibility to promptly notify us if there is ever any change in
your financial situation or investment objectives.
Investment Management Services for Securities Portfolios
For clients electing the Retainer Service we may provide investment management services on a
discretionary, non-discretionary, and advised basis. Each investment account is scheduled as a
discretionary, non-discretionary, or advised account in your executed agreement with us.
We perform research and due diligence consistent with our investment philosophy in order to
identify suitable investments for your account. We seek to identify mutual funds, separate
accounts, hedge funds and/or similar private investment vehicles with managers whose
investment philosophy and process are consistent with our investment philosophy for a given
objective. Primary objectives include:
• Reserve Assets – primary focus on liquidity and safety of principal
• Growth Assets – primary focus on growing purchasing power over time (5+ years)
• Aspirational Assets – higher risk assets characterized by potential for strong wealth
creation
Managers of the investment products identified and recommended by us will generally employ
an investment process with a very strong focus on the valuation of businesses, securities, and
other assets. They will tend to employ fundamental research in an attempt to identify assets
they consider to be mispriced relative to the underlying “fair value” of the asset. Such managers
may also require that certain parameters be met prior to committing capital to new
investments, and to the extent these parameters are not met there may be extended periods of
time in which the recommended managers will hold substantially more cash in their portfolios,
relative to other managers.
Discretionary Investment Management Services
For any assets or accounts that are designated to be managed via the use of discretionary
trading authority you authorize us to make changes in your account without your further
approval. When providing discretionary investment management services, we primarily allocate
your investment management assets among mutual funds in accordance with your investment
objectives.
Non-Discretionary Investment Management Services
We may render
non-discretionary investment management services to you for any accounts or
assets you so designate. For any assets or accounts that are designated to be managed via the
use of non-discretionary trading authority, we will be required to contact you prior to
implementing changes in your account. This means that for these assets and accounts, you will
be contacted and required to accept or reject our investment recommendations including:
• The security being recommended
• The number of shares or units
• Whether to buy or sell
Assets Under Advisement Services
We may provide continuous and ongoing supervision for certain of your non-managed assets
which will be identified and referred to as Assets Under Advisement in your executed
agreement.
For Assets Under Advisement, we will provide active monitoring and supervision and will
provide you advice regarding buying, selling, reinvesting or holding securities, cash or other
investments but will not have trading authority. You will have the sole responsibility for
implementing any recommended transactions.
Similar to our discretionary and non-discretionary investment management services, for Assets
Under Advisement we will obtain information from you to determine your financial situation,
investment objectives and risk tolerance. Assets Under Advisement are commonly assets or
accounts for which we are not formally indicated on the custodial statement as the investment
adviser of record on the account. You will receive an account statement from the qualified
custodian of the Assets Under Advisement detailing transactions in the Account. You will be
responsible for promptly notifying us of any changes to your financial situation or investment
objectives.
Assets Under Advisement Services are typically offered for (1) private (non-registered)
investment funds, and/or (2) separately managed accounts, and/or (3) variable life/annuity
products that you may own, and/or (4) your employer-sponsored retirement plans. Private
(non-registered) investment fund assets are held at the custodian(s) designated by the manager
of the fund. Separately managed account assets are held at the custodian(s) designated by the
manager of the separate account. Variable life/annuity assets are maintained at the specific
insurance company that issued the variable life/annuity product which is owned by you. Your
employer-sponsored retirement plan assets are held at the custodian designated by the
sponsor of your retirement plan.
Fiduciary Statement
We are fiduciaries under the Investment Advisers Act of 1940 and when we provide investment
advice to you regarding your retirement plan account or individual retirement account, we are
also fiduciaries within the meaning of Title I of the Employee Retirement Income Security Act,
(“ERISA”) and/or the Internal Revenue Code, (“IRC”), as applicable, which are laws governing
retirement accounts.
We have to act in your best interest and not put our interest ahead of yours. We must take into
consideration each client’s objectives and act in the best interests of the client. We are
prohibited from engaging in any activity that is in conflict with the interests of the client. We
have the following responsibilities when working with a client:
• To render impartial advice;
• To make appropriate recommendations based on the client’s needs, financial
circumstances, and investment objectives;
• To exercise a high degree of care and diligence to ensure that information is presented
in an accurate manner and not in a way to mislead;
• To have a reasonable basis, information, and understanding of the facts in order to
provide appropriate recommendations and representations;
• Disclose any material conflict of interest in writing; and
• Treat clients fairly and equitably.
Regulations prohibit us from:
• Employing any device, scheme, or artifice to defraud a client;
• Making any untrue statement of a material fact to a client or omitting to state a material
fact when communicating with a client;
• Engaging in any act, practice, or course of business which operates or would operate as
fraud or deceit upon a client; or
• Engaging in any manipulative act or practice with a client.
We will act with competence, dignity, integrity, and in an ethical manner, when working with
clients. We will use reasonable care and exercise independent professional judgement when
conducting investment analysis, making investment recommendations, trading, promoting our
services, and engaging in other professional activities.
Wrap Fee Programs
We do not participate in any wrap fee programs.
Other Information about Investment Management Services
We primarily construct each client’s portfolio using mutual funds, separate accounts, hedge
funds and/or similar private investment vehicles. We may modify our investment approach to
accommodate special situations such as low basis stock, stock options, legacy holdings,
inheritances, closely held businesses, collectibles, or special tax situations. Account
construction is generally customized to meet the individual needs of each client. We may agree
to allow you to impose restrictions on the accounts managed on your behalf.
You may make additions to and withdrawals from your account at any time. You may withdraw
account assets on notice to us, subject to the usual and customary securities settlement
procedures. However, you should note that we design our portfolios as long-term investments
and asset withdrawals may impair the achievement of your investment objectives.
Additions to your account may be in cash or securities provided that we reserve the right to
liquidate any transferred securities or decline to provide advisory services to particular
securities in your account. We may consult with you about the options and ramifications of
transferring securities. However, you are advised that when transferred securities are
liquidated, they may be subject to transaction fees, fees assessed at the mutual fund level (i.e.,
contingent deferred sales charge) and/or tax ramifications. You are advised to promptly notify
us if there are ever any changes in your financial situation or investment objectives or if you
wish to impose any reasonable restrictions upon our management services.
Client Assets Managed by Bluestone
The total amount of client assets managed by us as of December 31, 2023, was $146,446,558;
$132,557,878 was managed on a discretionary basis and $13,888,680 was managed on a non-
discretionary basis.
The total amount of client assets advised by us as of December 31, 2023, was approximately
$119,894,000.