On the Occasion of Our 4th Birthday
By AJ Ayers, CFP
It’s not easy to run a company. But some days, it feels easy here at Brooklyn FI. We have a truly remarkable team here and a growing client base that inspires us every damn day. The past year has been one of growth for us, but it also had its challenges.
When we (me AJ, and Shane, my co-founder) first met we made it very clear to each other that we intended to work very very hard but that we also intended to have a hell of a lot of fun.
We always intended for Brooklyn FI to be something BIG. It was never about creating a lifestyle practice where Shane and I could go golf on Thursday and Friday afternoons while we manage a small roster of relationships. No shade on advisors that do that at all. That’s a really nice life: give financial advice to retirees who are in a period of transition and create a semblance of work/life balance. At the end of a long hard day, sometimes I think, man we’re doing this wrong, it shouldn’t be this hard.
But that was never our vibe. From Day 1 it was about changing the way financial advice is given. It was about solving complex problems and finding ways to systematize and scale the solutions. It was about using technology and ingenuity to try things that many other advisors would shy away from (with good reason!). Needless to say, it has been hard, but so incredibly rewarding. Stuff breaks, projects we’ve spent months on go nowhere, software we’ve invested in is a bust. We’ve always thought of ourselves as a technology company within the financial services industry. However, the product is not an app or an algorithm. The product is the process of delivering financial plans that include complex solutions to tax problems, and the ability to repeat that process for hundreds, and someday soon, thousands of clients.
A lot of silicon valley’s companies were built on the motto of Zuckerberg’s “move fast and break things.” That’s cool and all but you can’t exactly move fast on a tax return. And as an SEC-regulated firm, we’re not really interested in breaking that much stuff.
But at the end of the day, four years in, with a growing client list, it feels like it’s finally just working.
Brooklyn FI by the Numbers
Date founded: April 20th, 2018
Client households served: 330
Financial planners: 8
CPAs: 3
Total team: 19
Value of stock options under advisement: $750,000,000
Assets under management: $130,000,000
We always intended to build something great – there was a product market fit for professionals in tech who needed not just a financial plan, but also complex tax advice.
And hey, we were right.
But don’t take our word for it:
Brooklyn FI has completely revolutionized financial planning. By providing us with a financial plan completely tailored to our lifestyle and our needs, we have the confidence that we can meet our goals and do it in a way that works for us! Also, their podcast is fire. Thanks, BKFI!
Back in the early days we looked insane. Here’s this hipster planner and this accountant with long hair who think they can change the financial services industry. It sounds kind of funny now. To those early clients that trusted us, the ones that ignored the fact that we had been in business for about two months, thank you. They saw us for who we are: genuinely good people who want to deliver highly technical advice in an accessible way for people who really need it and want to be treated with respect. You are the real MVPs. The people who said, sure, fuck it, these people seem to know what they are talking about, I’ll sign up for a subscription to financial advice, even though they look like extras in the HBO show Girls and nothing like what financial advisors are supposed to look like (a white dude in his 60s).
Would you trust this guy with your money? So many of you did!
Would you trust this guy with your money? So many of you did. And we’re forever grateful.
What’s changed? A lot. And nothing at all.
So we have these 8 core values. Honestly, I can’t even remember all of them and I wrote most of ‘em. But the ones that always stick out to me are transparency and mutual respect. We should probably just go with the ones that we all remember. Curiosity is in there too.
Heck, apply those to your friendships, family ties, and romantic relationships, and you’re basically set up for a happy and fulfilling life. Those core concepts are how we built Brooklyn FI, and more specifically, the business partnership that Shane and I have. We have to make a lot of pretty big decisions every damn day. It can be exhausting. Without that mutual respect, nothing moves forward. Without transparency, we lose trust.
Anyways, these are our core values.
We knew this was going to work. We knew too many super smart people starting to make money with nowhere to turn for financial advice. But we have taken calculated risks. Hell, this whole thing we now call Brooklyn FI was a calculated risk.
There’s no script for this. We’re making it up as we go along. We’ve of course been inspired by peers and mentors and coaches and had tremendously valuable advice imparted along the way, but at the end of the day…we’re a very different kind of financial planning firm.
The vibe is different. Our team members get it, our clients get it. It comes across on our website, in our communications, our videos, and our new podcast!
We’re Still Learning but We’re Doing Something Right
I think the most valuable lesson I’ve learned over the past four years: You can’t be all things to all people. I’ve talked to “valuable” potential clients who were looking for advisors with decades of experience and an office with a view of the Empire State Building. I wanted to be that so firm so badly for these people. I wanted them to trust me and my expertise like they would the older gentleman who has the two decades of experience and the fancy office. But I’m not that advisor, and Brooklyn FI is not that type of firm.
Then there are the clients who seem like a perfect fit but insisted we meet in person when we’re a 100% remote firm. I’ve caught myself thinking, well, this client is such a great fit, maybe we could just meet in person. It’s hard to say no as a business owner and you can’t please everyone.
But there’s a bit of a catch here. Even though you can’t be all things to all people, when you start a business, you HAVE to be all things to all people. You have to be a client-facing advisor, the CFO, the marketing director, the admin, the sales team, and so much more.
What’s changed the most over the past year is that Shane and I have started to take off some of those hats. We’ve hired some incredible team members who have taught us so much. We’ve found people who wear those hats better than we ever could. Watching our team thrive is what I’m most proud of. I joke with our newly minted Director of Financial Planning, John, sometimes: “please make me irrelevant.” It’s not that I’m done caring or I’m done working, quite the opposite! There’s just so much else to focus on at a fast-growing company like ours that needs my attention, and what I’m most looking forward to in year five is finally getting the time back to think much bigger picture.
Here's a team photo from our first retreat taken last summer. We’ve already almost doubled in size since this was taken!
The Brooklyn FI Difference
Remote work is here to stay
Will we be remote forever? That’s the plan. It’s offered our team members incredible flexibility and autonomy. Our clients love it. They are able to hop on calls during the day instead of having to take valuable travel time and meeting time after work to see us. Will we never ever have a physical office space? I’m not sure. We’ll certainly have in-person client events and retreats with our team. Those are fun as hell! I do love the idea of having a Brooklyn FI HQ someday – perhaps one in Brooklyn and one in Berkeley, CA (one that isn’t my home office with a closet full of BKFI merch).
We’re Obsessed with Innovation
This idea of transparency is so important. A lot of the client experience you may know and love comes from years of fine tuning and trying new things. And chances are, if there’s something you love about Brooklyn FI, it was an idea that came from one of our brilliant team members.
We have an extremely collaborative process here. Everyone’s opinion is valid and heard at Brooklyn FI.
We have a tax preparation process improvement list that we started on February 1st that as of today, April 20th, has 115 items on it! And only half of them are from me! JK. They are improvements from admin staff, tax preparers, financial planners, tax managers, and yes the bosses, all who not only do excellent work, but also directly contribute to big decisions at the company.
We’ve Asked 431 people what truly makes them happy
…and are currently helping them use their money to do more of whatever that is
Many of our clients are weirded out that in one our first financial planning meetings we talk a lot about feelings. We ask our clients a series of prodding questions that try to get to the core of their purpose in life. It’s a discipline of financial planning called Financial Life Planning and it’s a true game-changer. We work with a lot of tech professionals and in particular a lot of wickedly smart engineers and analysts. This Life Planning exercise usually spooks some folks in the beginning, but the exercise has an enormous impact on their financial plan. A lot of these tech professionals have just experienced a liquidity event or have one on the horizon. And many of them are about to have more money than they ever thought they would. What good is that money if we don’t do the work to find out what they love most about life and how they actually want to spend their most precious resource: time.
Shane and I have personally benefited from Financial Life Planning. We went through the exercise together and made some pretty massive passive changes to our lives. Shane fulfilled a lifelong dream of owning a sailboat. He would want me to tell you that his sailboat cost about as much as a used Toyota Camry but he loves that damn thing so much. Brooklyn FI has always been about using money as a tool to live your best life. And not waiting until your ‘60s to do it.
What We Do is Unique, And It’s Challenging
This isn’t a dig against our peers, there’s a very good reason most advisors don’t do your taxes: it’s really hard. There are a lot of wonderful financial planners and investment advisors out there, and we’re friends with a lot of them. But there are very few financial planning and investment firms that will track the basis of your Non Qualified Stock options to ensure you aren’t overpaying your taxes. There are very few financial planning and investment management firms that combine Financial Life Planning with top-notch technical expertise when it comes to equity compensation.
Most investment managers will not recommend that high earners execute a back door Roth strategy – it’s kind of messy when it comes to the paperwork and most CPAs don’t really know how to report it on your tax return. It’s taken a few years for us to make the process seamless but now we have a perfect loop that ensures a tax-free retirement contribution can be made every year and reported seamlessly on the tax return. And again, not a dig at other advisors but with a contribution limit of $6,000 per year, it’s not “worth it” for most investment managers to spend the hours it could take to get this strategy right for a few clients. It took years of internal log jams to finally find a workflow that works.
Cool stuff that happened over the past year:
The Liquidity Event podcast launched!
We built a piece of software that’s almost ready to track the tax implications of every stock option decision
We registered with the SEC
We were honored by our peers at the XYPN Network as Firm of the Year
What we’re excited about for the next year:
The podcast of course!
Training and empowering our team members to become managers and leaders
Studying how sudden wealth impacts the happiness of our clients
We’re expecting the first Brooklyn FI baby this summer (no, it’s not mine)
Attracting the top tax and financial planning talent in the country
The past four years have been an explosive period of growth. We’ve grown by more than 100% every year. I’m really proud of that and I’m proud of how quickly we matured into the firm we are today. We don’t plan to grow 100% this year, that might literally kill me. We’re at a size now where growth feels comfortable. We’re not expanding at a breakneck pace but we’re growing with purpose. We’re taking longer to make decisions because they have larger implications because we’re just...bigger. And that’s okay. At the end of the day, we get to work with clients who come to us seeking solutions to their complex financial and tax problems and their worries and anxiety around money. We’ll keep providing those solutions and will do it with integrity, innovation, and a sense of humor. Financial planning should not be boring and I don’t intend for that ever to be the case at Brooklyn FI. The clients that seek us out aren’t looking for fancy offices, or perceived experience, they work with us because they see the transparency we provide, the mutual respect, and the passion we have for this.
Much love and gratitude,
AJ