On the Occasion of Our Third Birthday
Today, April 20th, 2021, marks the third anniversary of Brooklyn FI’s existence as a financial planning firm. Now one could argue that our true birthday is somewhere around February 15th, 2013, when Shane began preparing tax returns and offering ad-hoc financial advice to his network of friends and creative professionals in Brooklyn. Or is it June 24th, 2017 when we (Shane and AJ) met for the first time when Shane was a guest on AJ’s old personal finance podcast? Or maybe it’s somewhere around August 1st, 2017, when we met in a bar to share Japan travel tips but ended up talking about our shared passion for providing financial advice to our underserved peers and laying the groundwork for Brooklyn FI. Those are certainly important milestones to remember, but today marks the day that we were officially approved to give investment advice in the state of New York by the financial regulators. So, we wanted to celebrate and reflect on three years of existence, share what we’ve learned, thank those who helped Brooklyn FI become what it is today, and show you where we’re headed. Hop on the Brooklyn FI rocketship!
Who We Are
Brooklyn FI is a full-service financial planning, tax, and investment firm specializing in tech professionals and creatives on the path to financial independence. At least that’s what the website says. But we’ve become so much more than that. At our core, we’re good humans who set out to make financial advice more accessible. Our methods of doing that have changed and evolved over the past three years and we’re excited to take it to the next level over the next three. The “FI” in Brooklyn FI stands for “financial independence” and that’s truly our goal for anyone coming in the door: reach financial independence so money is no longer a roadblock to achieving your dreams. The “Brooklyn” part of our name of course geographically ties us to the world’s best place to live, but we think the idea of “Brooklyn” transcends the borough. Brooklyn is sort of a global brand that means creativity, diversity, innovation, and history. We’re good with that, even as we have fewer and fewer ties to the place. We have rapidly growing client bases in San Francisco, Los Angeles, Denver, and wherever else the wind scattered folks during the pandemic. They all kinda get the whole Brooklyn thing. By the way, it’s pronounced “Brooklyn Eff Aye.”
In the early days of the Brooklyn FI partnership, we talked a lot about what was wrong with the world of finance. Both of us were repelled by the industry in general and shared the notion that finance bro culture is toxic and exclusive and that most people who work in finance don’t know the first thing about saving for their own future or doing their taxes properly and look down upon us financial planners from their glass offices in Midtown towers. They use big and fancy meaningless words and unnecessarily complicated investment strategies to impress and confuse clients. There’s a focus on sales and what looks good in a marketing presentation. We’re more interested in nerding out on tax-saving strategies for our clients and actually implementing them.
We also looked around at the makeup of the financial planning profession. Only 23% of Certified Financial Planners are women and only 3.5% are black AND Latino combined. Those are depressing statics and don’t represent the reality of our friends and loved ones, our firm, and our client base. It’s a well-known fact in the industry that most financial planners are white married men with children who likely go to church every Sunday. There’s even a designation for faith-based financial planning. That’s just not who we are and that’s not who are our clients are, for the most part. It’s a demographic that’s already overrepresented in financial services and often comes with a different set of priorities: family, liability protection, security, and college planning. As business owners and humans, we have different priorities. We prioritize ambition and drive, we want to have the financial and employment freedom to travel the world spontaneously, we look for ways to maximize our leisure time while also working long hours (work hard, play hard), we want to start businesses, we want to make sure we leave the planet in better shape than it is now, we like to go to concerts, we want to feel financially secure before we start a family or buying a home, we make time to travel to see our scattered families, we try to stay healthy and fit, we want to spend Sundays curled up on the couch with a book, and we spend time thinking about causes we care about and taking action. Our clients are generally on the same page.
Like our clients, we’re at an exciting transition period of our lives. We’re helping our clients answer life’s important questions while also figuring things out for ourselves: Should we have kids? Should we buy a house? Should we quit our jobs and start a business (been there, done that)? How do we talk to our parents about aging? Where should our kids go to college and how will we pay for it? How do we combine finances with a partner? Should we even get married? Should we sell it all and move to Costa Rica? Like we said, big questions.
In the beginning, it was just Shane doing taxes from various co-working spaces, bars, his living room, etc. Then it was AJ and Shane doing taxes at our first WeWork office. Then we added some team members, moved into a bigger WeWork office, and just when we were about to move to an even bigger office with our team of five, the pandemic hit and we sent everyone home to set up offices in their kitchens and second bedrooms. In the past year, we’ve grown to a team of ten and we’re looking at adding a new team member about every three months. The pandemic has been both a challenge and a touchpoint for us - we never thought we’d be hiring financial planners outside of Brooklyn but we now have planners in four different time zones! We’re hiring the best and brightest CFPs and as we add team members, we add new perspectives and that gives new clients an opportunity to work with the absolute best planner for their situation.
Brooklyn FI by the numbers:
Date founded: April 20th, 2018
Client households served: 195
Financial planners: 4
Value of stock options under advisement: $600,000,000
Assets under management: $37,000,000
Percentage of new clients that come from existing client referrals: 75%
Average client age: 35*
*This is an average. We don’t ONLY work with people in their 30s, our client base just skews that way. We have many clients in their 20s, and a handful in their 60s (Judy and Tony we love you) (Almost there Rob!). We define our target age range as “youthful,” not “young.”
We’ve experienced some pretty incredible growth these past few years and we’re currently on track to double in size about every nine months. We attribute this growth to a few key things:
1. The strength of our partnership
2. Our amazing clients
3. Core Values
The Strength of our Partnership
We think every entrepreneur should have a business partner. We have peers who have built financial planning firms on their own and we’re seriously in awe of them. Building Brooklyn FI together has been a wild roller coaster but we’ve had each other along the way to handle the ups and the downs. There are of course the obvious things: having complementary skill sets, having someone around to answer the phone when you’re on vacation (still haven’t taken one of those yet), delegating the hard things, sharing responsibility, having different perspectives when problem-solving, and so much more. It’s also the little things that make us grateful for our partnership: having someone to check your tone in an email before sending, reminding you of the bigger picture when you’re stuck on a tiny problem, providing inspiration and energy when you’re headed down the wrong path, and so much more. A lot of the tax advising we do around equity compensation is more of an art than a science so we’re constantly bouncing ideas and strategies off each other, and our clients have benefited. We’ve experienced stellar growth because we both are extremely hard workers with a disturbing amount of passion for financial planning. We dare each other to do better, read more, and innovate more every day.
Our Amazing Clients
We seriously have the best clients. They are smart, ambitious, and compassionate. They ask questions about our financial recommendations and they trust us with massively personal financial decisions. It’s the clients that make this whole thing so damn awesome and it’s why we love coming to work every day. We’re constantly inspired and challenged by our clients. Our clients are also directly responsible for the growth of Brooklyn FI. We have been laser-focused on improving our current client experience and taking care of our flock while new faces are coming in at record rates. Clients have a great experience here and then drop our link in the company Slack channel and we hear from small clusters of employees at a specific company. It’s pretty neat because we get to become experts in a specific company’s benefits and equity plans. To our clients: thank you for trusting us and thank you for inspiring us.
Core values
Most business books have a chapter somewhere about defining core values. Usually, it’s three to four defining values that the founders share. These are guiding principles that influence every business decision we make. We’re a bit extra so we went with eight.
Transparency – both internal and external – Open
Passionate about the work and personable – Spirited
Constant pursuit of knowledge – Curious
Repeatable/Scalable Focus – Practiced
Constant innovation/Process improvement – Nimble
Delightful client experience – Fulfilling
Clear, concise, and constant communication + keep your promises – Clarity
Mutual respect - Trust
We’ve written an entire culture guide (thanks for that Angie) on how we act on these values that we won’t bore you with here. In a nutshell: we use technology and knowledge to innovate on our already fantastic client experience. Once we defined our core values it became clear that we needed to change the way we interact with clients. In the past, we’ve offered two different service models: one where we offer tax preparation for a one-time fee and the other where we offer comprehensive financial advice to businesses and individuals. We realized that the one-off tax preparation was a transactional relationship. When you prepare someone’s tax return after the year is over, there are very few things you can change - what’s done is done. We watched these clients cycling through the door each April 15th and then we’d send them on their way to make the same mistakes over and over. They weren’t ready to pay for ongoing advice, and until Brooklyn FI was founded in 2018, we weren’t ready to offer it. Now, with three years of delivering almost 200 financial plans, we’re pretty friggen good at planning for our clients’ specific needs. We also realized that our niche had shifted. In the early days, most of our clients were creative professionals or freelancers, but as we scaled up, our client base naturally shifted (mostly due to those amazing clients who referred their colleagues) to technology professionals.
We often joke that Brooklyn FI is the perfect marriage of creatives and tech but we do find that when a couple comes on board - there’s often a creative small business owner spouse and a spouse who works in technology with equity compensation. Equity compensation has always been in our blood: when Shane first got started in the accounting world, he was doing audits for tech start-ups in Austin, TX, and got his first glimpse of stock options plans and how a successful IPO can make unsuspecting employees into millionaires overnight...and how smart tax planning can make or break an employee’s exit. For AJ, it was actually working at a tech company and trying to understand her own Incentive Stock Options that started her on the path to founding Brooklyn FI and our eventual niche of equity compensation. Both of us have spent the past three years amassing a wealth of knowledge in the space and consider ourselves among the leading experts on the taxation of equity compensation. We’ve added like five designations to our names if that matters to anyone (it typically doesn’t, le sigh). We’ve increased our technical chops and invested time and energy into our softer skills like “active listening”, both of which are necessary for a Brooklyn FI client relationship. Brooklyn FI will always be unique in that we combine the financial plan and the complicated timing of an employee’s exit with the actual tax preparation. Owning every stage of that relationship provides tremendous value to our clients and presents some unique challenges for us as a firm.
What We’ve Learned This Past Year
The pandemic nearly broke us last year. We got sick, our team members got sick, we lost family members, our team lost family members and we were simply freaked out like most humans. When the world shut down around March 15th, literally on the second most important tax deadline of the year, we were scared. We were scared for ourselves, our clients, and our business. The stock market took a big dip and our clients began to lose their jobs and shutter their businesses. Then the government launched the PPP program and we switched into high gear, working 14 hour days from March 15th straight through the extended tax deadline of July 15th to make sure our scared and financially strapped clients were okay. Even our financially independent clients were terrified and needed extra guidance. For most of us millennials, this was the first financial crisis where we actually had money invested in the market. But then things turned around and with a slew of successful IPOs in the fall and our clients were suddenly showing up with huge portfolios concentrated in one stock and wanting to buy houses upstate. We mostly talked them out of buying houses upstate but we did successfully diversify those portfolios :).
We’re now a 100% remote firm which allows more flexibility with meeting scheduling for clients and team members all over the country. We have a physical office presence at a co-working space in Greenpoint should we ever need to meet a client in person, but we have no current plans to return to an office any time soon. To sum it up: the pandemic was really difficult for us personally and professionally but we pivoted quickly and then excelled.
Where We’re Going
Here are a few things we’re really excited about.
We’re starting a podcast. It’s called The Liquidity Event. We’ll cover all things related to the financial lives of tech professionals and investors. We’re super excited to launch this June!
We’re building software! We are both enrolled in the Columbia School of Engineering Fintech Bootcamp to learn how to integrate technology (even more) into our process. Currently, our highly complex stock option tax plans live in spreadsheets. The spreadsheets work and provide the answers our clients need, but they are cumbersome and ugly and our tech-forward clients deserve better. We figured we’d learn how to code like so many of our clients. We’re also not delusional and know that we’re not going to be shipping perfect code in six months so we’ll be looking to partner with engineers and product managers to bring our software dreams to life.
We’re helping business owners understand and optimize their income. For years we’ve offered bookkeeping services and tax preparation to small businesses and in 2021 we’re taking that service to the next level. We’re adding financial forecasting and business consulting services to help our clients scale up quickly and efficiently.
We’re making the most of this new work from home reality. We’re navigating the new realities of remote work and maintaining personal relationships with our team members and clients. We’re looking to attract the next generation of superstar wealth managers by offering them incredibly flexible schedules and a rewarding digital experience. We also deeply miss human connections so we’ve instituted an annual company retreat. We’re taking our whole team to SUMMER CAMP this July and will be hosting in-person client events later this year. We’ve actually grown to love Zoom meetings but at the end of the day, we just want to hang out and laugh with smart people (our colleagues and clients).
Thank you for making it this far on this very long post.
Much love to our clients and colleagues.
- AJ Ayers + Shane Mason, April 20th, 2021