Spotlight: Investing with a Family Touch

By Gus Mollasis

October, 2020 – Jerry and Fay Bainbridge met 60 years ago, building a business together side by side as a husband and wife team was not in the plan. Yet for the last 33 years they have been helping grow and manage the wealth of clients.

Jerry studied mathematics and worked as an engineer for many years at AT&T. But he never really liked engineering. His true interest? Investing. 

In 1981, the couple began to explore that dream. “At that time, we were only managing money for family and friends,” says Jerry. “In fact, Fay’s mother was our very first client.”

Over the next six years, their investments did well. Well enough that Jerry and Fay were able to put their children through college. Well enough to resign their jobs and dedicate themselves to building a new business. “Like many small businesses, we started ours in a spare bedroom in our home,” says Jerry. “We worked hard and we got up to 100 clients in a matter of about six months.”

The couple moved to Sarasota, leased an office and, over time, built an office at 1582 Main Street. As years went by, they continued to add clients and personnel.

Today their investment firm, J.L. Bainbridge & Company, manages more than $650 million dollars. “There are eight people in our firm,” says Jerry. “Essentially it’s become a dream come true.”

Sharing their American Dream

The key to success was having a very conservative, disciplined investment approach. Jerry believes it has helped them weather all kinds of financial storms calmly, with a steady hand. “In addition, we made our management fee totally payable dependent upon our client’s satisfaction.”

“That got us through the crash of 1987 essentially unharmed. It got us through the crash of 2000, when the technology boom exploded. It got us through the 2008 – 2009 recession, which was by far the worst recession of our lifetime,” he says. “And it’s now getting us through the Covid-19 situation.” 

Currently, Jerry and Fay own 42% of the company, and 58% of the company is owned by team members. This way, everybody has a stake in the company and everybody is committed to the success of the company for clients.

Taking the Long View

Who’s their ideal client? Individuals or families who want to invest in their future and who have realistic goals. Those who hope to double their money in three years are not a good fit.

As far back as 1981, Jerry made an observation. “It’s amazing, people who go out to buy furniture or a new car take more time in reaching that decision than they do in many cases investing in stocks. You see it over and over and over.”

Jerry spells out the firm’s philosophy from the very first meeting. Once on board, clients receive a letter every month that talks about an aspect of Bainbridge’s business investments. “Then the client sees through various markets that we never deviate from our philosophy,” he says. “And we communicate often. That builds the relationship and trust.”   

Bainbridge invests only in quality companies that have a long history of earnings growth, very conservative financials, limited debt, and very high cash flow.  “We followed that philosophy in 1981 and we follow that philosophy today,” he says. “And we are now instilling that into all members of our team so that once Fay and I do leave the company, which hopefully is several years from now, the company will move forward.”

About the year 2020 versus the market of 2008-2009, Jerry says there is no comparison. “To me, 2008 to 2009 was much worse. The market actually declined almost 50%. Technology stocks lost at least half their value. The real speculative stocks lost 90% of their value and have never recovered.”

Amid the Covid-19 era, he is both realistic and optimistic. “The only thing that may change that is if we don’t get a vaccine,” he says “Then the economic recovery will probably falter and then we could be in some serious trouble. But I’m pretty optimistic from everything I read that there will be a vaccine.” 

His biggest conviction about investing? “The biggest mistake that investors make is that they take too much risk,” he says. “If you lose money, time is not on your side. You never make it up later, because the compounding of money over time is what ultimately makes you very wealthy.”

“I hope that they think that we have been instrumental in their financial success. I’ve gotten letters from clients that say, ‘Thank you for the great retirement.’ I hope that they would think that they were fortunate to have found our company and fortunate to utilize our philosophy. We’re here to serve clients.”

Jerry and Fay Bainbridge

Money and Meaning

What do Jerry and Fay hope their clients will remember from doing business with them? “I hope that they think that we have been instrumental in their financial success. I’ve gotten letters from clients that say, ‘Thank you for the great retirement.’ I hope that they would think that they were fortunate to have found our company and fortunate to utilize our philosophy. We’re here to serve clients.”

Jerry and Fay have long invested their own money the same way they invest clients’ money. That has allowed them a high level of financial security, and in turn, to make a meaningful contribution. “You look around and see what you can do with the money to help society. That’s why we formed a family trust and foundation 12 years ago,” Jerry says.

Their foundation gives away a million dollars each year to organizations that make an impact. “We give money to a charity that serves abused children. We give money to an organization that is supporting families and individuals that are in danger of becoming homeless. We give money for low-cost housing. We support local programs to help those students not achieving at full level,” says Jerry. In addition, the couple sponsors about 40 scholarships a year at the school where they graduated from up in Wyoming, Michigan.

Even with all these accomplishments, Jerry and Fay still enjoy going into the office—together.  

“We’re just so close. We literally don’t argue and we don’t have disagreements. Some people think that it’s crazy that we work together day and night. But that works for us. Fay is in the office with me every day, and I guess we just complement each other.” Jerry says, “It’s really not work to us. If it was, I wouldn’t be doing it at age 79.”