Bragg Financial Advisors, Inc.
Bragg Financial Advisors, Inc. (Bragg) is an investment
advisor registered with the Securities and Exchange
Commission (SEC).
Our principal place of business is Charlotte, North Carolina.
Bragg Financial Advisors began conducting business as a
registered investment advisor in the state of North Carolina
in 1997. We registered with the Securities and Exchange
Commission in 2000.
Bragg provides advisory services to individuals, investment
companies including mutual funds, pension and profit‑
sharing plans and charitable organizations.
As of 12/31/2023, we were actively managing client assets
of $3,423,863,250 on a discretionary basis.
Our People and Our History
Bragg Financial Advisors is a family‑owned business.
Our firm traces its roots back to 1964 when our founder,
J. Frank Bragg, Jr., first entered the financial services
industry in Charlotte. Information about the firm’s founder
and shareholders who are active in the management of the
company is listed below.
J. Frank Bragg, Jr., Founder of Bragg Financial Advisors,
Inc., Chairman Emeritus
Frank grew up in Oxford, North Carolina, and graduated
from Wake Forest University in 1961 with a BA in English.
Frank began his career in financial services with Security
Life and Trust Company in Winston‑Salem. In 1964, he
moved his family to Charlotte and formed his own firm
specializing in employee benefit plans. Over time, the
firm evolved into a more comprehensive benefits and
investment organization offering financial planning
and portfolio management for individuals. The second
generation of firm leadership, including Frank Bragg’s
three sons and son‑in‑law, joined the firm in the 1990s
as the company evolved into a comprehensive wealth
management firm.
Benton S. Bragg, President, CEO and Principal
Shareholder – Shareholder
Benton graduated from Wake Forest University in 1990
with a BA in History and a minor in English. He received his
MBA from Wake Forest University in 1997. Benton holds
the Chartered Financial Analyst and Certified Financial
Planner designations. Benton chairs the Investment
Committee at Bragg and works closely with individual
and institutional clients of the firm. You can read more
about Benton by reading the brochure supplement to this
document.
Phillips M. Bragg, Vice President and Principal
Shareholder – Shareholder
Phillips graduated from Wake Forest University in 1993
with a BA in English. Phillips holds the Certified Financial
Planner and Accredited Estate Planner designations.
Phillips provides expertise in retirement cash flow
planning, estate and gift planning. He also advises clients
regarding donor advised funds, charitable trusts, private
foundations and conservation easement planning. You
can read more about Phillips by reading the brochure
supplement to this document.
John F. Bragg III, Vice President and Principal
Shareholder – Shareholder
John graduated from Wake Forest University in 1988
with a BA in Communications. John holds the Certified
Financial Planner designation. John works with individual
and institutional clients of the firm. You can read more
about John by reading the brochure supplement to this
document.
Steve H. Scruggs, Senior Portfolio Manager, Director of
Research – Shareholder
Steve graduated from North Carolina State University in
1992 with a BA in Business Management. He received his
MBA from Wake Forest University in 1996. Steve holds
the Chartered Financial Analyst designation. Steve is
our Director of Research, a member of the Investment
Committee and the portfolio manager for the FPA Queens
Road Small Cap Value Fund and the FPA Queens Road
Value Fund. You can read more about Steve by reading
the brochure supplement to this document.
We offer the following advisory services to our
clients:
INDIVIDUAL PORTFOLIO MANAGEMENT – MANAGED
ACCOUNT PROGRAM
Portfolio Management Guided by Written Investment
Policy Statement: Our firm provides portfolio management
of client investment accounts based on the individual
needs of the client. After engaging with the client in
extensive discussions about the client’s personal financial
circumstances, investment goals and long‑term financial
objectives, we and the client develop the client’s written
Investment Policy Statement. The principal objective in
developing a written investment plan is to enable you
and us to protect your portfolio from ad hoc revisions to
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a sound, long‑term plan. The written plan will help you
maintain discipline when short‑term market movements
may be distressing, and the plan may be questioned.
The development of an investment plan follows the basic
approach underlying financial planning: assessing your
financial condition, setting goals, developing a strategy
to meet these goals, implementing the strategy, regularly
reviewing the results and adjusting the strategy or the
implementation as circumstances dictate. Utilizing an
investment policy statement encourages you to become
more disciplined and systematic in your approach, thus
increasing the probability of reaching your investment
goals.
Portfolio Construction and Management Process: The
portfolio construction and management process to be used
by Bragg Financial Advisors emphasizes diversification and
strategic allocation among different asset classes. Empirical
evidence and academic research suggest that with regards
to portfolio performance, the impact of strategic allocation
among various asset classes will far outweigh the impact
of security selection, market timing, or other decisions that
affect performance. The process used by Bragg emphasizes
the risk‑adjusted performance of the entire portfolio; it does
not emphasize the performance of the individual securities
within the portfolio. Our process will not employ methods
such as frequent trading, market sector rotating or market
timing.
Portfolio Securities: Bragg constructs portfolios using
securities including but not limited to publicly traded stocks
(common and preferred), publicly traded bonds, no‑load
mutual funds, real estate investment trusts, exchange traded
funds, options and other derivative contracts, certificates of
deposit, unit investment trusts, money market instruments
and similar cash equivalents and other securities. Asset
class exposure will include but not be limited to Large Cap
Equity, Mid Cap Equity, Small Cap Equity, Foreign Equity,
Real Estate, Cash Equivalents and Fixed Income Securities.
Bragg periodically rebalances portfolios to maintain the
desired blend of exposure to specific asset classes and
security types. The investment vehicles we use to construct
portfolios are not limited to any specific product or service
offered by a specific broker/dealer or other financial
institution.
Independent Managers (Separate Account Management):
In some cases, Bragg may engage an independent manager
or separate account manager to manage all or a portion
of a client’s account. When an independent manager is
used, securities selected by the independent manager
will be owned in the client account in lieu of securities
(stocks, bonds, mutual funds, ETFs, etc.) selected by Bragg
Financial Advisors. The specific terms and conditions
under which a client engages an independent manager
will be set forth in a separate written agreement between
Bragg and the designated independent manager. Clients
will acknowledge in writing the terms of the engagement
including the approximate amount to be managed by the
independent manager and the fees to be assessed by the
independent manager.
Bragg will complete due diligence on the various
independent managers, including but not limited to analysis
of investment strategies, past performance adjusted for risk,
manager tenure, manager process, research capabilities,
reporting capability, reputation, financial strength, pricing
and compliance record.
On an ongoing basis, Bragg will monitor the performance of
those accounts being managed by independent managers
to ensure ongoing alignment with the investment objectives
and interests of the client.
Portfolio Models: Client accounts are normally assigned to
a Portfolio Model as follows:
Portfolio One: Aggressive Allocation with Emphasis on
Capital Appreciation. Equity Portion of the portfolio to
normally range between 80% and 100%. Fixed Income
Portion to normally range between 0% and 20%.
Portfolio Two: Aggressive Allocation with Emphasis on
Capital Appreciation. Equity Portion of the portfolio to
normally range between 70% and 90%. Fixed Income
Portion to normally range between 10% and 30%.
Portfolio Three: Moderately Aggressive Allocation
with Primary Emphasis on Capital Appreciation and
Secondary Emphasis on Income. Equity Portion of the
portfolio to normally range between 60% and 80%. Fixed
Income Portion to normally range between 20% and 40%.
Portfolio Four: Moderate Allocation with Emphasis on
Capital Appreciation and Income. Equity Portion of the
portfolio to normally range between 50% and 70%. Fixed
Income Portion to normally range between 30% and 50%.
Portfolio Five: Moderately Conservative Allocation with
Emphasis on Capital Appreciation, Capital Preservation
and Income. Equity Portion of the portfolio to normally
range between 40% and 60%. Fixed Income Portion to
normally range between 40% and 60%.
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Portfolio Six: Moderately Conservative Allocation
with Emphasis on Capital Preservation, Income and
Moderate Capital Appreciation. Equity Portion of the
portfolio to normally range between 30% and 50%. Fixed
Income Portion to normally range between 50% and 70%.
Portfolio Seven: Conservative Allocation with
Emphasis on Capital Preservation and Income; Capital
Appreciation is Secondary. Equity Portion of the portfolio
to normally range between 20% and 40%. Fixed Income
Portion to normally range between 60% and 80%.
Discretionary Management: In almost all cases, our firm
manages portfolios on a discretionary basis per the written
Investment Policy Statement. This means Bragg will not
contact the client prior to conducting buy or sell transactions
in client accounts. Clients may impose reasonable
restrictions on investing in certain securities, types of
securities, or industry sectors and these are outlined in the
Investment Policy Statement. In some cases, portfolios are
managed on a non‑discretionary basis.
Advisory Fees: Bragg charges Advisory Fees for the
Managed Account Program described above. In addition to
the Advisory Fees charged by Bragg, there are other costs
associated with our Managed Account Program. Please
review the “Fees and Compensation” section (Item 5) of this
document for specific details regarding fees and charges.
Fiduciary Acknowledgement: When we provide investment
advice to you regarding your retirement plan account
or individual retirement plan account, we are fiduciaries
within the meaning of Title 1 of the Employment Retirement
Income Security Act and/or the Internal Revenue Code, as
applicable, which are laws governing retirement accounts.
The way we make money creates some conflicts with your
interests, so we operate under a special rule that requires
us to
act in your best interest and not put our interest ahead
of yours.
PORTFOLIO MANAGEMENT – SMALL CAP VALUE
MANAGED ACCOUNT PROGRAM
Bragg Financial Advisors offers portfolio management to
individual and institutional clients who desire a specific
portfolio constructed primarily of the common stocks of
small companies. The Small Cap Value Managed Account
Program focuses on companies that have a market
capitalization generally less than the largest company in
the Russell 2000 Index.
Discretionary Management and Investment Policy
Statement: Bragg manages these accounts on discretion
per a written Investment Policy Statement that is developed
with input from the client.
Advisory Fees: Bragg charges Advisory Fees for the Small
Cap Value Managed Account Program described above.
In addition to the Advisory Fees charged by Bragg, there
may be other costs associated with our Small Cap Value
Managed Account Program. Please review the “Fees
and Compensation” section (Item 5) of this document for
specific details regarding fees and charges.
FINANCIAL PLANNING
Financial planning is a collaborative process that helps
maximize a client’s potential for meeting life goals through
financial advice that integrates relevant elements of the
client’s personal and financial circumstances. As portions
of our financial planning recommendations may involve
tax, insurance, borrowing or legal planning considerations,
we strongly recommend that clients coordinate with other
advisors such as accountants, insurance professionals,
lenders, or attorneys before implementing planning
recommendations. We do not provide legal or tax advice.
Any legal or tax issues discussed with clients should also
be discussed with legal or tax counsel.
In general, we may provide Financial Planning in the
following areas:
Retirement Planning: We may project annual required
savings necessary to accumulate adequate assets to
fund a desired stream of income in retirement. We may
suggest appropriate investment vehicles for clients to
consider using for retirement accumulation. In all cases
we will make assumptions regarding future investment
returns, savings rates, inflation and longevity. There is no
guarantee that our assumptions regarding the future will
prove to be accurate.
Education Planning: We may project annual required
savings necessary to accumulate adequate assets to
fund education expenses. We may suggest appropriate
investment vehicles for clients to consider using for the
accumulation of education funds.
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Investments: We will assist you with developing and
implementing an asset management strategy. Through
personal discussions in which goals and objectives based
on a client’s particular circumstances are established, we
develop a client’s written Investment Policy Statement
(IPS). We may also analyze investment alternatives such
as exchange listed securities (stocks, bonds, exchange
traded funds), warrants, corporate debt securities,
certificates of deposit, municipal securities, variable life
insurance, variable annuities, mutual fund shares, United
States government securities and option contracts on
securities and their effect on the client’s portfolio.
Insurance: We may review existing policies to ensure
proper coverage for life, health, disability, long‑term care,
liability, home and automobile. We may make specific
recommendations regarding the amount and structure of
any coverage currently in place or recommended by our
firm.
Estate Planning: Working with other professionals such
as accountants and attorneys, we may assist the client
in assessing and understanding the financial aspects of
long‑term estate planning strategies.
Other Planning Issues: We may also provide planning in
other areas including but not limited to debt structuring,
cash flow planning, lease/buy decisions, conservation
easement planning and charitable planning.
During the financial planning process, we will (1) obtain and
analyze qualitative and quantitative information from the
client; (2) discuss with the client our professional assessment
of the client’s financial and personal circumstances and
help the client identify goals, noting the effect that selecting
a particular goal may have on other goals; (3) analyze the
client’s current course of action and potential alternative
course of action. We will discuss the material advantages
and disadvantages of the current course and whether
the current course maximizes the potential for meeting
the client’s goals. We will consider and analyze one or
more potential alternative courses of action, including the
material advantages and disadvantages of each alternative,
whether each alternative helps to maximize the potential
for meeting the client’s goals and how each alternative
integrates the relevant elements of the client’s personal
and financial circumstances.
From the potential courses of actions, we will select one or
more recommendations designed to maximize the potential
for meeting the client’s goals. For each recommendation
we will consider (1) the assumptions and estimates used to
develop the recommendation; (2) the basis for making the
recommendation, including how the recommendation is
designed to maximize the potential to meet the client’s goals,
the anticipated material effects of the recommendation
on the client’s financial and personal circumstances, and
how the recommendation integrates relevant elements of
the client’s personal and financial circumstances; (3) the
timing and priority of the recommendation; (4) whether the
recommendation is independent or must be implemented
with another recommendation.
We will present the client with the selected
recommendation(s) and the information that was required
to be considered when developing the recommendation(s).
We will help the client implement the plan by:
(1) communicating to the client the recommendation(s)
being implemented and the responsibilities of your advisor,
the client and any third party implementing the plan;
(2) identifying, analyzing and select actions, products and
services to implement the recommendation; (3) discuss
with the client the basis for selecting an action, product, or
service, the timing and priority of implementing the action,
product, or service, and disclose and manage any material
conflicts of Interest concerning the action, product, or
service; (4) discuss with the client any client selection that
deviates from the actions, products, and services that were
recommended.
We will discuss with the client whether we have monitoring
and updating responsibilities. If we do have monitoring and
updating responsibilities then we will (1) determine how and
when we will monitor the recommended actions, products
and services; (2) discuss the client’s responsibility to inform
us of any material changes to the client’s qualitative and
quantitative information; (3) determine the time frame
for updating the financial planning recommendations;
(4) monitor the client’s progress at achieving their stated
goals and make recommendations by collaborating with
the client to obtain updated qualitative and quantitative
information.
MUTUAL FUND PORTFOLIO MANAGEMENT
Our firm provides portfolio management services to
investment companies including mutual funds.
Bragg Financial Advisors launched and served as advisor to
two no‑load mutual funds, the Queens Road Funds, in 2002.
In 2020, Bragg entered into a strategic partnership with
First Pacific Advisors, LP (FPA), resulting in FPA becoming
the advisor to the mutual funds and in the renaming of
the funds to the FPA Queens Road Small Cap Value fund
and the FPA Queens Road Value fund. Bragg now serves
as sub‑advisor to the Funds and continues to manage the
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Funds’ portfolios. In their new role as advisor to the Funds,
FPA provides administration, marketing, and distribution
services. Steve Scruggs, CFA, a principal at Bragg Financial
Advisors, has served as portfolio manager for the Funds
since their inception in 2002 and continues in that role
under the new partnership.
Interested investors should refer to the Mutual Funds’
Prospectus and Statement of Additional Information (SAI)
for important information regarding objectives, investments,
time‑horizon, risks, fees, and additional disclosures. These
documents are available online at www.fpa.com.
Prior to making any investment in the funds, investors
and prospective investors should carefully review these
documents for a comprehensive understanding of the
terms and conditions applicable for investment in the
Mutual Funds.
PENSION CONSULTING SERVICES
Bragg Financial Advisors offers specific services to trustees
or plan sponsors of pension plans, profit sharing plans,
401(k)/403(b) plans and other types of employer sponsored
retirement plans. We refer to these services as Pension
Consulting Services. Pension Consulting Services are
comprised of four distinct services. Clients may choose to
use any, or all, of these services.
Investment Policy Statement Preparation (hereinafter
referred to as “IPS”): We will meet with the client to determine
an appropriate investment strategy that reflects the plan
sponsor’s stated investment objectives for the assets of
the retirement plan. Working with the client, we will prepare
a written IPS outlining the investment objectives and the
specific portfolio or investment options to be utilized by the
client. The IPS will list the criteria for selection of investment
vehicles as well as the procedures, process and timing
interval for monitoring investment performance.
Selection of Investment Vehicles: Using the client’s written
Investment Policy Statement as a guide, we will conduct
research and due diligence on various investment options
under consideration for inclusion as participant choices
in a specific retirement plan. We will then make specific
recommendations to plan sponsors regarding which
investment options to include in the plan. In many cases
we will advise plan sponsors throughout the process of
constructing a menu of mutual funds or exchange traded
funds that is made available to participants in self‑directed
retirement plans.
Monitoring of Investment Performance: We monitor client
investments based on the procedures, process and timing
intervals delineated in the Investment Policy Statement.
Although our firm is not involved in the purchase or sale
(trading) of these investments, we provide due diligence on
the current offerings in the plan and make recommendations
as to whether those options should be changed.
Employee Communications: For pension, profit sharing and
401(k)/403(b) plan clients with individual plan participants
exercising control over assets in their own account (“self‑
directed plans”), we may provide periodic educational
support and investment workshops designed for the plan
participants. The nature of the topics to be covered will
be determined by us and the client under the guidelines
established in ERISA Section 404(c). The educational
support and investment workshops will NOT provide plan
participants with individualized, tailored investment advice
or individualized, tailored asset allocation recommendations.
Amount of Managed Assets
As of 12/31/2023, we were actively managing client assets
of $3,423,863,250 on a discretionary basis.