Wealth care for a healthy bottom line

Brad Johnston's moment of epiphany came in the late 1980s while attending a lavishly appointed conference for financial wealth managers on the top floor of the World Trade Center in New York.

Johnston, then a branch manager in Minneapolis with Morgan Stanley Dean Witter, looked around the room and concluded, "There's not anybody in this room I aspire to be like."

It wasn't long after that he broke out on his own and formed a more personalized wealth management operation that he called the ­Johnston Group.

"I sat quietly, reflected, prayed and sought counsel, and at the age of 39, I decided if I didn't take the step now I would always regret it," Johnston said in an interview last week.

In the beginning it was Johnston and his Dean Witter sales assistant running the business as they searched for executive-level clients who wanted more one-on-one attention in handling their financial portfolio and reaching their long-term financial goals.

Later this month, Johnston, who just turned 60, will celebrate 20 years as head of the Johnston Group with a reception and thank you for clients and friends at the Town and Country Club in St. Paul.

"I saw the need to provide comprehensive, solution-based advice and I couldn't do that in a large company," said Johnston, who also worked as a broker and manager at Merrill Lynch and the old Piper Jaffray & Hopwood. "Large companies have a business plan to execute the delivery of goods and services to a broad market. There's no soul there. It's a manufacturing process."

"When we talk to clients we ask them, 'What is the most important thing you want to do? Is it financing education, making gifts to charity, taking trips?' " Johnston said. "To make that happen only two documents matter — your net worth and your income statement. And there are four things that impact those two — taxation, ownership, risk and rate of return after inflation. We put all of those things into context in a coordinated plan that meets fundamental needs."

Twin Cities entrepreneur and former Target executive Nate Garvis, who has been a client of Johnston's for more than a dozen years, selected Johnston to be the family's financial adviser after interviewing several firms.

"He was asking different questions than the others," Garvis said of the selection process. "He seemed to be very interested in us as people and as a young couple and less interested in the business question of what do you want to do with your money. He didn't strike me as someone just doing financial services."

Garvis, author of NakedCivics and co-founder of Studio/E for entrepreneurial lessons for business leaders in St. Paul, said the Johnston Group provides more than just financial advice. He said the organization handles such matters as insurance and consults with his accountant at tax time.

"It's almost like having a family CFO," Garvis said. "From a financial perspective, we're happy, but the relationship goes much deeper than that."

"Because I lost my parents at a young age, I grew up observing other people and learned from my observations. John Roberts at age 13 had the elements of his success already in place — determination, integrity, desire. We certainly have clients whose balance sheet reflects their efforts but some not yet," Johnston said.

Johnston, whose staff of nine includes his wife, Maggie, son Ty, and daughter Abby Anderson, currently has slightly more than 100 clients with about $325 million under management.

His clients, Johnston said, must agree to be partners with him and the organization.

"You can't do this without a certain amount of intimacy. You won't believe what I tell you until I know you," he said. "When I grew up, my goal was to have the experience of having a family. Today, this is a family business."