Telling Stories

Myles Brandt of Charleston Financial Advisors LLC

By Kevin Adler

Myles Brandt, M.S., CFP^®, is a storyteller. For more than 15 years, he’s been bringing his combination of narrative and quantitative skills to the clients of Charleston Financial Advisors LLC.

Charleston Financial has been Brandt’s only full-time employer. Intending to get a graduate degree in history and become a college professor, he sat next to Bill Prewitt, Charleston Financial’s founder, at a cocktail party. “I asked him what he did for a living. I thought it sounded interesting and interned with him that summer. I called him when I graduated, and I’ve been here ever since.”

Now he’s a partner and part-owner of the firm with Diane Blackwelder, CFP^® (see “One firm’s succession plan from the perspectives of both seller and buyers”). Brandt is 39 years old, and Blackwelder is in her 50s, so clients have commented that they are pleased that the firm will continue to serve them for decades.

The ownership transaction was a sweat equity deal worked out with Prewitt, who remains on board part-time as well. (Prewitt, who was on NAPFA’s board from 1995 to 1999, shared his reflections on NAPFA’s impact in an essay in the June NAPFA Advisor.)

Nurturing Approach

When Brandt was hired in January 2007, the stock market was surging, and he says his first year and a half was calm, even dull, at times. Then the real estate bubble burst, and the stock market fell sharply. “At that point, I really got to see how people felt emotionally about the ups and downs of the market and how we could help them manage it well,” he says.

He was hooked. To add to his skill set, Brandt earned an M.S. in applied economics from Johns Hopkins while working full-time for the firm, and then he worked toward an ownership stake. “As you become more competent, that’s when the passion comes out,” he says.

When he started, Charleston Financial managed about $35 million for 35 clients. Today, it manages about $200 million for 175 clients. “They are all very accomplished in their respective fields: doctors, lawyers, professors, financial professionals, etc. Their needs can vary from optimal accumulation strategies to making the best of retirement,” Brandt says.

Typical clients earn a good living and are financially prudent; they vary in age and in geographic location. Having a comprehensive financial plan and sticking with it has a great impact, he says. “We get to tell people when they are millionaires. I’ve had grown men cry in my office when I told them they could afford to retire,” Brandt says.

The firm meets with clients at least annually to review and update their plans. Investments are primarily handled through DFA and Vanguard funds. “We also overlay asset location across a portfolio on either a tax basis or risk basis,” Brandt says.

Clients understand that they are investing for the long term, and Brandt says that Charleston Financial’s quarterly updates and periodic phone calls seem sufficient to keep them in the loop. During the early weeks of Covid-19 in 2020, Brandt said the firm heard from almost no clients. In fact, it was so quiet that the partners started calling clients to make sure they were feeling OK. The most common response he received was that they didn’t want to bother him during such a busy time. “I learned that we have very polite clients!” he laughs.

With so much market uncertainty as Covid-19 lockdowns took effect, Brandt waited for a little stability before rebalancing clients’ portfolios. Then in an intense period of about two weeks, he rebalanced all the portfolios. It was a massive job, especially given his other responsibilities. “That’s when we realized we needed to hire a portfolio manager,” he says.

Finding that portfolio manager was accomplished through a posting on the NAPFA job board. It was a match that worked well for a couple of years, but the manager left earlier this year to join a firm close to her hometown rather than work remotely.

Charleston Financial is now looking to replace that manager, but Brandt says the market is tight. The firm will be patient “and look for the right fit,” he says.

Finding staff through NAPFA is one of the many ways that affiliation has been beneficial to Charleston Financial and to Brandt personally. The conferences and workshops are critical for expanding his knowledge, and he reads the NAPFA Open Forum discussions each week. Having access to thousands of NAPFA members helps Charleston Financial think about how to handle its challenges. “It helps us know we’re not shooting in the dark,” he says.

Passion for Narrative

Clients aren’t in the dark about Brandt and his thoughts because one of his duties is to write a column that accompanies the quarterly reports. Rather than producing an impersonal stock market review or economic forecast, he usually tells a story about his life as a parent, outdoor enthusiast, and advisor.

Earlier this year, he wrote about fly fishing and how it’s like investing. “You walk into a fly shop, and there are hundreds of options for gear,” he says. “But all you need is a couple of pieces of gear and time out on the river. Investing is like that—you just need a couple of good funds and time.”

Another story was about his son Henry, who is now eight years old. When Henry was five, Brandt taught him to ride a bike, using a little trick. The training wheels were off, and he told Henry to close his eyes while he put them back on. “I made a noise like I was fixing the bike,” he says. “Then I told him to open his eyes and pedal forward while I gave him a push. Off he went and rode around the baseball field twice.” The lesson, Brandt says, is that sometimes we have to imagine what our financial lives can be to “trick ourselves” into seeing beyond what we think we can do.

A year or so later, Brandt watched his son ride off to his grandparents’ house half a mile away, and another investing lesson came to mind. “It was the longest five minutes of my life until we got a text that he had arrived. But my wife was calmer; she said you have to let kids go,” Brandt says. “Investment portfolios are the same way. You can’t be too overbearing, or you will stunt their development.”

Looking Ahead

Charleston Financial has grown primarily through referrals, and it has hired slowly. Brandt says this is likely to continue to be the model, though the firm might need to add additional talent if it expands its service offering. Tax preparation and bill paying are under consideration.

Bill paying would be especially important for the firm’s aging clients, some of whom signed up with Prewitt in the late 1980s or early ’90s. The trust factor from clients already exists, but the question is how to provide the service without stepping over a regulatory line, Brandt says. “If we have people’s mail delivered here, that would be considered custody, and that raises regulatory issues and would require an annual audit,” he explains.

As a first step in bill paying, he and other staff might go to clients’ houses once a month and help them pay the bills. “If we do this, we could get some insights that might be beneficial for planning purposes,” he adds.

While this might seem as unusual as a doctor making house calls, it reflects how Charleston Financial has built relationships. “I have a lot of clients who have become my friends, and friends have become clients,” he says. “I thoroughly enjoy going to a client’s house, where I see a bit more into their personality and get to know them better.”

---

 

An ‘Excel-ent’ Covid-19 Adventure Covid-19 restrictions changed everyone’s routines, and Myles Brandt used his time wisely. While housebound, Brandt wrote several Excel-based programs that are streamlining operations at Charleston Financial Advisors. One creation was a portfolio optimizer enabling him to see the relationships between different asset classes over time. Brandt has access to commercial optimizers, but he says doing it from the ground up “reaffirmed to me that what we are doing is efficient.” Brandt also created tools to analyze when to do partial Roth IRA conversions, a common opportunity for older clients. His tool seeks to smooth out a client’s taxable income over their retirement instead of filling up a particular marginal tax bracket with conversions. The problem with available Roth conversion software, he says, is that it seeks to provide the greatest tax savings by analyzing conversions at the maximum income tax rate. With income as the goal, Brandt says he can also calculate a breakeven age on the conversion. As a third tool, Brandt created a ranking system to enable him to decide how to diversify the investments of clients who come in with individual stocks. “I rank the securities on three factors—the size in their portfolio, unrealized capital gains, and how over- or underpriced a stock may be,” he says.

 

---

Charleston Financial Advisors LLC

Location: Charleston, SC

Website: charlestonfinancial.net

Year founded: 1986 

Number of staff: 4 

Number of clients: 175 

Total assets under management: $200 million 

Typical clients: Doctors, lawyers, professors, financial professionals, etc. 

Typical client needs: They want someone they can trust to take care of them, their spouses, and any heirs long after them. Needs can vary from optimal accumulation strategies to making the best of retirement.

Typical investments: Low-cost index-based investments, primarily DFA and Vanguard funds

Favorite financial services website or app: Morningstar for research and content, and Kitces.com

Favorite nonfinancial services website or app: Anything to do with fly fishing.

Piece of advice to fellow NAPFA members: “Never forget how important your work is. You are facilitating good financial decisions and financial health. The externalities of this work are positive and infinite (less stress in people’s lives, more people being able to do what they want with their lives, less divorce, more kids getting educated, fewer people destitute in old age, etc.).”