Although good news in the world of finance is hard to come by these days, the Bragg family sees the glass as more than half full and advises their clients at Bragg Financial Advisors accordingly. President Benton Bragg refers to a saying he often hears from his father, company founder Frank Bragg, “Life is good and getting better.”
“This, of course, is a challenging market but we are working overtime guiding our clients through these uncertain times,” Benton explains. “Right now, we are focused on the sustainability of client portfolios and retirement income, and finding the best way to help our clients achieve this.”
For some clients, this means having patience until things turn around. For others, this means making adjustments in their portfolio, and in some cases, in their lifestyles, but Benton remains confident that they will all weather the downturn.
“It is human nature, but one of the biggest mistakes we can make right now is to react to short-term market performance,” says Benton.
Good Stock in the Family
Bragg Financial Advisors was built 43 years ago on the principles of hard work, honesty and doing the right thing—ideals that are still at the forefront of their business model today.
Upon graduating from Wake Forest University (WFU) in 1961, Frank Bragg began his career in the insurance business. Having achieved some success, he decided to branch out as an independent sales representative and in 1966 he moved to Charlotte and launched his own firm specializing in employee benefit plans.
Frank was a pioneer in the industry in that he was one of the first advisors to set up an employee self-directed mutual fund menu for a corporate plan. By the late ’80s, he expanded company offerings to include asset management and planning for individuals and families.
In 1990, Frank recruited his oldest son John into the business. John, a WFU graduate and Certified Financial Planner (CFP), had previously worked for Hinrichs Financial. Today, Frank heads up the corporate advisory group at Bragg Financial.
Three years later, Frank lured Benton, another WFU graduate, away from his position with Bank of America to join the firm. Benton earned an M.B.A. from Wake Forest and is a Chartered Financial Analyst (CFA) and CFP and serves as president of Bragg Financial and chairs the investment committee.
“It has always impressed me how fiercely independent my dad was,” Benton recalls. “I saw how much he loved what he did and I wanted to be part of it.”
Two years after Benton’s arrival, Frank’s youngest son Phillips, a WFU graduate like his father and brothers, left his position as a Wachovia Trust Officer to take his place alongside his family. Phillips is also a CFP and is responsible for the firm’s tax, estate and charitable planning group.
Rounding out the principals is Steve Scruggs, who grew up with the Bragg brothers and later married their sister; he joined the firm in 2000. Steve earned an M.B.A from Wake Forest, is a Chartered Financial Analyst (CFA), and is the firm’s director of research and responsible for managing the Queens Road mutual funds.
Benton notes that Bragg Financial’s “extended family” has over 75 years of combined experience in the industry. Among the firm’s advisors there are no less than 14 advanced degrees or designations creating a strong power base of professionals for a firm of its size. The firm even has a CPA on staff to provide in-depth tax advice and planning for their clients.
Benton adds, “We treasure the people on our team and realize that they are truly our most valuable asset.”
It is this family dynamic that sets Bragg Financial apart from its competitors. Each account and portfolio is truly managed by a team of professionals; which allows for continuity and a high level of personal service that is not always offered by larger firms.
It also yields comprehensive financial advice, as each member of the Bragg Financial team offers unique expertise in his of her area of specialty developed through experience and education.
Bragg Financial offers its clients disciplined investment management as well as estate planning, retirement cash flow planning, and advice on real estate, conservation easements, charitable planning, and income tax strategy.
“It is unusual to have a financial situation with a client that we have not encountered within our own family,” Benton comments. “Real-life experiences are the best way to gain knowledge and to help our clients make wise decisions.”
Benton is quick to credit his father’s leadership to much of the firm’s past and continued success.
“He has done a great job managing the firm through its transition. He knows and appreciates when to be there and when not to be,” he comments. “We realize how fortunate we are that we enjoy working together. There is a high level of trust and commitment among the principals that is of great value.”
A Portfolio to Bragg About
Bragg Financial defines their role as helping their clients create, preserve and enjoy wealth.
“We provide fee-based asset management, estate planning and financial planning for high net worth families, foundations and other institutions,” Benton explains. “We also have a corporate group that specializes in investment advisory services and employee communications for qualified plans.”
The Bragg Financial investment philosophy is centered on the tenets of Modern Portfolio Theory, an academic body of research published Dr. Harry Markowitz over 50 years ago.
“We use an institutional method of investing to obtain diversification by asset class, sector representation and a mix of value and growth,” Benton clarifies. “Our disciplined approach to regular rebalancing, managing for tax efficiency and maintaining a long-term focus adds tremendous value to client portfolios.”
Bragg Financial adheres to a strict investment discipline in the construction of portfolios of stocks, bonds and mutual funds for its clients, which emphasizes diversification, long-term holding periods, fundamental analysis and risk-adjusted returns.
Benton explains: “We strive to manage money within the context of a client’s financial planning. We believe assets can only be appropriately managed with knowledge of a client’s estate, retirement and charitable objectives.”
More simply, he states “the planning must inform the investing,” which is why they devote substantial time and attention to each client with a careful evaluation of long-term objectives and risk profile. Once this process is complete and they have an understanding of the client’s needs and expectations, they determine a strategy that best suits an individual’s financial goals.
When asked about the typical Bragg Financial client, Benton smiles and says they used to use $2 million as a benchmark, but these days, it is more appropriate to say they are looking for people who “used to have $2 million.”
The Bragg team recognizes that sound investment management is a crucial means to secure retirement. Retirement planning involves analysis of the retirement capital that is needed, design and implementation of a long-term investment plan, accumulation planning utilizing taxable savings, IRAs, Roth IRAs, and retirement accounts, and in-depth analysis of various withdrawal options for IRAs and retirement plan savings at retirement.
A frequent question asked of clients is, “What good will you do with your wealth?”, which helps individuals plan for charitable giving through endowments, donor advised funds, charitable trusts, private foundations, and conservation easements.
In June 2002, Bragg Financial started two no-load mutual funds, the Queens Road Value Fund and the Queens Road Small Cap Value Fund, both of which are managed by Steve Scruggs. Both funds have fared well in this difficult market and currently have a Morningstar four-star ranking.
Benton credits the success of the funds to Scruggs’ management. Each has been listed in The Wall Street Journal’s Category Kings List, a list of the best performing funds in each category. Most recently, the Queens Road Small Cap Value made The Wall Street Journal’s Category Kings ranking as one of the top 10 best performing small value funds for 2008.
But Benton further notes that while the funds are attracting national attention and creating excitement for the firm, they represent only a small part of Bragg’s current business.
Additionally, Bragg Financial’s services to corporate plan clients include consultation and plan design, RFP searches for appropriate plan service providers, preparation of the Investment Policy Statement, serving as a co-fiduciary with regard to ERISA requirements related to investment manager selection and monitoring, and fully documenting all plan procedures and processes.
While Benton acknowledges that it can be easy to focus on the negative, especially these days, he explains that he and his team are instead looking for ways to make the most of the current economic situation.
One upside to the downturn has been increased opportunity for communication with their clients.
“We operate an open door policy with our clients and have certainly been in communication with them more frequently over the past few months,” Benton says. “We are using this difficult market as a means to build stronger client relationships.”
In light of recent scandals within various financial sectors, Benton says their independence and size requires them to be accountable to their clients.
“Because we own the company, we are reporting directly to the governing bodies,” he explains. “So we are not only accountable to the SEC and FINRA, but also to our clients.”
He again refers to a saying by his father, “Do the right thing and you won’t have a problem,” and says it is this mantra that is behind their squeaky clean business, noting that their size and independence also means they can’t afford any missteps.
“We are working in a controlled environment which allows us to offer highly customized services to our clients,” he adds. “At the same time, we are aware of the expectations put on us by our clients and strive hard to over deliver on those expectations.”
In addition to assets under management, which are currently holding around $600 million, and performance of their mutual funds, Benton refers to client relationships as another gauge of the firm’s success.
“Helping our clients achieve their financial goals is our goal and what makes the job worthwhile,” he comments. “If we are helping our clients do this, we are succeeding.”
Benton sees this year as an opportunity to gain new business. “We are aggressively looking for new clients,” he explains. “There are a lot of people out there who have lost a lot of money and are looking for guidance and advice from high quality advisors.”
At the same time, he continues, they plan to have very measured, deliberate growth with regard to new client relationships: “We have made significant commitments to our existing clients and therefore, we must be cautious about the number of new relationships that we can effectively manage without diminishing our highly personal level of service.”
Like many family businesses, Bragg Financial desires to give back to those who helped contribute to their success and is very committed to serving their community. The company has been described by The Charlotte Observer as a “small company with a big heart,” and the firm was also recently recognized by the Mint Museum with its Spirit Award for contributions of time, talent and resources to the vitality of the arts.
“We feel very fortunate to be part of this community,” Benton says sincerely. “We are humbled by the business opportunities our clients afford us and by their commitment in us as a firm.”
Amidst uncertainty, the Bragg family remains optimistic, “We believe in this town, this state and this country and will continue to invest in their future.”