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.