Jon Jones has a few thoughts about  what work-life balance means. During a long phone interview, the sound of lapping lake water can be heard over the talk of client goals and financial freedom. It’s the same glacier-fed lake in Washington state, Lake Chelan, where he met his wife at age 17. (He’s now 45.) 

It might seem perverse that, a few years ago, just as the company he founded, Brighton Jones in Seattle, had hit $2.5 billion in assets under management, Jones launched a new program in which employees could start taking extended sabbaticals after 10 years—and then took the first one himself, lighting out for a year with his family, including four kids, on a 35-country backpacking tour. 

Strange, but not, since the pursuit of happiness and fulfillment is a subject as dear to Jones’s heart as tax planning. His firm has taken the subject to heart, too. It’s a place where emotional intelligence and mindfulness are discussed with intensity, where fun and philanthropy and meditation are serious topics of discussion. Where there’s a “chief fun officer.” Where clients’ assets are discussed as instruments to realize their true desires and retirement plans are known as “vocational freedom analyses.” 

The result is a firm with a very touchy feely, even crunchy granola approach to life and finances, but the founders defy professional stereotypes. Jones and co-CEO Charles Brighton have accounting backgrounds. 

Their RIA firm reflects the values of its clientele—which, especially in the beginning, was made up of young tech entrepreneurs in Seattle, one of the cradles of the tech industry. To young tech millionaires in their 20s and 30s, old age and retirement are abstract and alien subjects. They want money to serve their lifestyles. Have impact. 

That attitude has informed the growth of Brighton Jones in many ways, from its approach to planning and cash management to staff management and philanthropic outreach. (Local charities come in frequently.) 

“We really focus around not deferring gratification because you never know when you may die,” Jones says. “My father passed away when I was 3. I’ve always had this perspective of you never know when you may die. So let’s have a good balance of saving some money as we go but living life and trying to figure out what that balance is.” 

In some cases that might be getting clients to spend more money rather than save it. Or perhaps keep working, as long as they love working.

Whatever it is, it has drawn a client base of 1,200 people and some $3.5 billion in assets under management and $4.5 billion under advisement. 

A Little Dream, A Little Luck

Brighton and Jones took a big leap of faith 16 years ago, leaving cushy accounting jobs at Deloitte & Touche to launch a holistic planning firm from scratch. They didn’t go to a bank for help. To save money, they opened their first office in a funky part of Seattle, the Capitol Hill area. They were ensconced not among financial services firms but in an industrial-style brick office over a tuxedo and costume shop, next to an LGBT bookstore. Jones had a new baby; Brighton had one on the way.

“We were risking everything,” says Brighton.

“It was credit card debt for the first couple of months. … Anybody who could fog a mirror was a potential client.”

It was part pluck, part luck, but the firm was in the right place at the right time—Seattle in the middle of a tech maelstrom, full of young entrepreneurs with all sorts of incentive stock options, restricted stock, deferred comp and other benefits they were either too green or too busy to manage, smart as they were. Wide open targets for a couple of tax guys.

“A lot of that stuff is tax-driven,” says Jones. Wirehouses wouldn’t have the CPAs on hand to help clients understand the tax ramifications of the benefits. Jones and Brighton started to make cold calls (or send e-mails using suffixes they figured out). The pitch was that the firm could be a personal CFO to young tech whiz kids, just like the ultra-wealthy had.

Jones and Brighton don’t run down their old firm, Deloitte, where they were planners in an accounting office. But they didn’t like billing clients by the hour. 

“It leads to being more reactive than proactive,” Jones says, adding it’s hard to plumb somebody’s soul if the meter is running. For meaningful discussions about real goals—“I’ll have to bill you or I’ll have to eat the hours,” he continues. 

Brighton Jones went for retainers instead. That way they could have talks and no transactions. It also meant, of course, that client relationships would not be profitable for long dry spells. “It’s easier to provide advice as things come up. So the first year or two of a client relationship is just not very profitable,” Jones says.

The two partners had the right complementary skills to start a business together. Jones was an outgoing, life-of-the party, heart-on-his-sleeve type. Brighton was more subdued, pragmatic and technical. Jones is more likely to get a big idea and want to reinvest money in the business. Brighton is more likely to want to take it out. 

 

In its second or third year, the firm turned a major corner after sending a flurry of emails to execs at Washington Mutual (whose employee benefit packages they knew through their Deloitte connections). That led to a callback. 

Not just any callback, but a call from WaMu’s chief risk officer, who had exactly the kind of problems Jones and Brighton had anticipated. The meeting almost didn’t happen. The executive drove up to Capitol Hill looking for Brighton Jones amid the dry cleaners, yoga studios and tuxedo stores. He couldn’t find it and turned his car around while Jones failed to wave him down. 

An inauspicious beginning, but that executive eventually came back and became a champion for Brighton Jones within the bank. Execs there, like everywhere, were good at making money, but didn’t know how to maximize or protect their windfalls. 

“They were going to pay a bunch of tax they didn’t need to pay,” Charles Brighton says. “And it wasn’t just regular income tax, it was also alternative minimum tax.” (Brighton remembers one client who had rung up $10 million in AMT without even knowing it, having exercised all his IPO stock options at a low strike price. The firm caught it and reversed it before the calendar year ended. “So he’s a client for life,” says Brighton.)

The bank even started paying part of their executives’ Brighton Jones fees. Eventually 90 to 100 bank employees became firm clients—representing up to half Brighton Jones’s business. Not bad for a meeting Jones almost missed. A happy start (even if there was no happy ending for Washington Mutual, which disintegrated in the subprime mortgage crisis in 2008).

Since then the success that the firm has enjoyed with younger clients has spawned an interesting trend. While most of the profession frets about losing the children of clients—and their assets when they die—the young clients at Brighton Jones are bringing their parents in the door. Some 50 relationships are now with the parents or aunts and uncles of clients, Jones says. 

“Some of the older people,” Jones says, “are still in a very traditional model where they have a stock broker and [the broker is] picking stocks and they don’t do a very good job at performance.” (And they are being overcharged.)

Younger people, however, are more focused on the social impact of their investments than getting an extra 2% of performance, says Brighton. “I’m seeing a huge growth in the impact investing realm in the younger set,” he says, where older clients have been more concerned about not paying taxes. 

But with all clients it’s about the freedom.

Vocational freedom doesn’t have to mean how much money you make, Jones insists. “It’s not a dollar amount as much as it is ‘I love what I do and it doesn’t feel like work.’ So for some [clients], that’s retirement. They don’t really love their day jobs and they’re looking forward to retiring,” he acknowledges. “They need to get to an asset number so it can purchase an income for them so they can do what they really love, which might be woodworking, or it might be working doing a technology start-up, it might be working for a nonprofit or golfing, or it might be nothing.” 

That goes for him, too.

“Part of me taking my taking a year off [in 2013] is that I had spent eight years being a manager and the entrepreneur, and I’m like, ‘I want to get out of this manager role’ and the day-to-day operations of the business and focus more on the future and where we’re headed. So I’d hired another really strong manager … kind of handed the business off to him to operate for the year I was gone and then came back.” 

So how does vocational freedom affect actual planning? Knowing how much clients spend is a big part of it, says Jones. Most people don’t know the answer to that, so don’t know how much their freedom might be within reach. The firm’s first job is to find that out. Cash management plays a big role.

 

“You have to look at your return … but in a total return portfolio versus a yield portfolio,” Jones says. “So trying to live off a laddered bond portfolio and not touching the principal is just not realistic. So what we do is we look at what the total return is of the portfolio—whether it’s capital preservation, a dividend or a yield from a bond—and we’re going to use any one of those or all of those to help fund the client’s paycheck, depending on which asset class is performing above its kind of historical mean return.

“So if the mean return of the stock market is roughly 10%, and we’re getting, say, 13% to 14% over the last year or two, we’re going to live off more capital appreciation than we are yield. And then vice versa—the market is down and bonds have gone up and we’re still getting the yields on bonds; then we’ll harvest capital appreciation from the bonds and take the yield and fund the paycheck from that asset class. So I think that people that are planning on investing people’s money based on traditional yield portfolios to fund the paycheck, I just don’t think that works. Either that or people are going to live off a fraction of what they really could live off of.” A 10-year preservation account is part of that strategy. Then there is a core asset holding and diversification holdings as well.

Mind And Mindfulness

The firm takes the touchy-feely stuff seriously, and has programs based around concepts such as “mindfulness” (present moment awareness) and “EQ” (emotional intelligence). People’s awareness of their own feelings and their dealings with others are just as important as taxes, Jones says, and helps the firm talk with people about their life goals and happiness. Meditation, concentration exercises, even Sudoku—these are all mindfulness exercises that Jones says require a different part of the brain. 

“We’re not forcing people to meditate,” Jones says, “but forcing people to at least understand what mindfulness is and what emotional intelligence is and what the benefits are.” 

That’s important for staff if they want to have better client and colleague interactions, too.

Happy Staff, Career Path

The firm has even brought its “meta” approach to its own staff. The firm boasts a “chief fun officer” for extra-curricular activities, peer recognition programs and a philanthropy committee that brings in local charities. The culture of emotional honesty can make training sessions at Brighton Jones different. It’s not uncommon for tears to be shed in staff meetings (even by principals) as people tell stories about clients in trouble or dealing with death, says Brighton. 

But fun aside, the emotional intelligence part of management is about something much more serious: growing advisors right on the tree.

Cory Custer, director of learning and development, came on board in 2015, charged with helping employees with career development—he and colleague Liv Freeby provide a sort of client service team to the staff. Custer, a broker-dealer vet and professional career coacher, says employees at big companies often hit a plateau, even if they are ambitious. He was brought on because Brighton Jones wants to help short-circuit that malaise.

“We figured out how to grow advisors,” where other firms acquire them, Custer says. “We have a number of great advisors who started in client service roles right out of school. Not everybody is figuring that out.”  

Most of our advisors,” Jones adds, “are home grown where they come up as an analyst and move up to senior analyst and then a manager, then a senior manager, then a lead advisor. Then we feed them clients all year every year. So they are the furthest thing from salespeople.” Clients will eventually be rolled over to younger staffers so that the average account size for an advancing advisor can rise, Jones says. Happy staff. Career path.

The emotional training with staffers—getting a type A personality to listen to somebody’s family problem—is crucial to the firm’s definition of a “mindful” employee. Crucial because a new generation of advisors is coming up in the industry who won’t remember what it was like to build a book of business at an insurance company or brokerage.

“I think the financial advisor of the future looks way more like a life coach or therapist than they do a financial planner,” Custer says. “Where they need to be able to handle that emotional-social connection to really get to what’s driving people.” 

“If there’s any problem that I’ve seen in wealth management it’s this “client first” mentality taken too far,” Custer says. “We are so focused on our clients and we treat each other like s*** and employees are second-class citizens. Jon and Charles understood that it’s got to be a whole ecosystem.”

The home-grown approach also means that the firm has eschewed acquisitions so far to jealously guard its culture. Hitting 20% growth targets, then, means thinking new business lines. 

The firm, says Jones, will have roughly $30 million in revenues this year ($24 million is the personal CFO business, $5 million is the tax business and $1 million is retirement). But it wants to diversify its revenue stream. The 20% asset growth target is harder when you’ve got more assets to lift off from every year. “The law of large numbers is what keeps me up at night,” Jones says. 

As part of that growth strategy, the firm created a 401(k) business a couple of years ago to create a channel of growth. The firm also added legacy planning as a separate channel and a financial literacy program.

But he adds that three years out, the firm might have to think about growing inorganically (through an acquisition) if it’s going to keep that 20% growth target. He says he knows: When you adopt another culture, it changes you. 

And right now, the culture is precious, summed up in the company’s mission statement: to help people live a richer life. “As we’ve matured as a company, we’re about helping them live a richer life. They can define what richer means. Whether it’s peace of mind or traveling more or buying things that they want to buy. Whatever it might be.”