Her normal office hours are at most 40 hours a week. Her clients have a minimum of $1 million in investable assets. Her practice has virtually no client turnover and no employees. And did we mention that her practice is based in Honolulu?
Life is good for Lesley Brey, a NAPFA-registered solo practitioner and president of LJ Brey. By helping her clients fulfill their dreams she has fulfilled her own. A midlife career change got her there. Before that, Brey's life was not always so idyllic.
With a B.A. in mathematics from Pomona College and a master's degree in engineering from Stanford University, Brey started as an engineer for Chevron, working as a construction manager in the downstream part of the oil industry, first in Seattle, then in California, and finally in Hawaii.
In order to stay in Hawaii, she switched to a Hawaii-based firm that required stints in the South Pacific, including Samoa and Fiji. She added an M.B.A. from Chaminade University in Honolulu to her credentials, eventually moving to another local company, Pacific Resources.
When Broken Hill Proprietary bought out Pacific Resources in 1989, it became clear to Brey, then a petroleum economist, that she would be expected to travel internationally. Yet she and her family were determined to live in Honolulu.
STAYING AT HOME
A good friend, financial planner Dale Yahnke of Dowling & Yahnke in San Diego, convinced her that fee-only planning would both keep her in Hawaii and provide a rewarding career. His advice included four strict caveats: obtain a CFP and CFA designation, join NAPFA and go to the annual Dimensional Fund Advisors conference.
Brey was willing to follow this advice, though she worried that she might not have all the necessary expertise. She also discovered that paradise had a price. The CFA exam turned out to be even more difficult than the PE exam for engineers.
"It took me two years to build up a sufficient nest egg and make significant progress toward my CFP and CFA certifications before I was willing to take the plunge,'' she says. Before launching her practice in 1997, she asked herself the same question she asks her clients: What would give me a great, balanced life?
Her answer? Maintaining a small, disciplined practice. She created a business plan with specific targets and dates, for example, X number of clients and X dollars in assets under management by such and such a date. After 15 years, she has 29 clients with a bit more than $40 million in assets under management, one client shy of her business plan's limit of 30 families.
Her target investable assets for new clients have grown over the years to $1 million. Brey's fee structure is 0.875% on the first $1 million in AUM and 0.5% on anything over that. For client investments, she predominantly uses DFA funds, along with some Vanguard and Schwab funds. All three fund families allow her to control client taxes, client expenses and client exposure to the markets.
The use of DFA core funds has provided a mix of investment styles with automatic rebalancing that saves her clients transaction costs. Despite her analytic pedigree, Brey avoids commodity funds and hedge funds. Although she spent a good deal of her career in an industry where commodities and futures trading were part of daily life, she thinks this type of trading has no place for the individual investor. "It's pure speculation," she says.
Another key to the simplicity of her practice has been remaining solo. Starting her advisory business in the post-Internet world, she did not need or even consider adding staff. She always has had a tremendous level of virtual and real resources within reach, creating growth for her clients.
Brey outsources compliance regulations and details, but handles all financial planning, client data reporting and investing in-house. "With the help of ProTracker software, I follow all of my own procedures, numerous lists and checklists that I have written for myself," she says.
The small size of her firm permits time for backpacking treks and exotic vacations. She and her husband, a dentist, recently returned from three weeks in Africa. For urgent needs, clients can contact her custodian, Charles Schwab.
"Since day one, I have had a plan to allow personal flexibility while providing high-touch service,'' she says. "I am committed to knowing what is enough in my life, and living in balance so that I can credibly coach my clients in that direction."
In addition to her successful practice, Brey serves on the NAPFA board of directors. Her particular role is that of national board study group coordinator, in which she helps support, maintain and improve NAPFA-sponsored study groups all over the U.S. in which planners share their own experiences and financial know-how.
A CLIENT BALANCING ACT
Along with the usual investment, tax, retirement and estate planning part of any advisory practice, Brey engages her clients in a process that focuses on life as well as financial planning. Sample values exercises and goals exercises are available on her website under "Explore Yourself."
Brey admits a natural tendency toward using too many words and offering explanations to clients that are sometimes too technical.
Yet one of Brey's favorite stories involves a client couple who were convinced they needed to stick with their jobs for another five to 10 years before pursuing their adventure and volunteer ambitions. Brey worked with them to develop a set of critical goals and values, while examining what flexibility existed in their income and spending.
Within this process, the couple found the courage and commitment for one of them to retire immediately and the other two years later, both with the intent of cultivating consulting work to supplement their retirement income. Brey teaches clients that retirement does not necessarily mean not working, but choosing what work you do every day regardless of earnings levels.
The spouse who first retired began legal consulting work while getting in shape for her dream adventure, a diving trip to the Great Barrier Reef. Her husband retired two years later and went on an international medical mission as a volunteer. They now both work part time, planning future adventures and exploring philanthropic opportunities.
Despite her successful practice and role on the NAPFA board of directors, Brey says she prides herself on self-honesty and an optimistic outlook that her clients find contagious. "As I tell them," she says, "Everything will be OK in the end. If it's not OK, then it's not the end!"
Jim Grote, a CFP in Louisville, Ky., is a Financial Planning contributing writer.
President, LJ Brey
Credentials: CFP, CFA, AIF
Assets under management: Approx. $40 million
How I see it: "Since day one, I have had a plan to allow personal flexibility while providing high-touch service.''