4.A. Advisory Firm Description
Morris Financial Concepts, Inc. (“MFC,” the “firm,” or “Adviser”) is organized as a
Corporation in the State of South Carolina. Kyra Morris is the principal owner. The
organization first filed for incorporation as of 01/12/2001.
4.B. Types of Advisory Services
MFC typically engages clients in the following services:
1. Financial Planning: The Financial Planning Agreement engagement provides a
broad range of financial planning services which may include tax-related and other
non-investment related matters. In general, planning services provided under the
Financial Planning Agreement do not include investment supervisory or investment
management services, nor the regular review or monitoring of the client’s
investment portfolio. An additional addendum may allow for the discretionary
management of assets under this contract. The Financial Planning Agreement is
offered for a period of one year to implement and monitor the plan or until
terminated by either party. MFC may provide continuing review and update
services beyond the first year for a mutually agreed upon fee.
The services provided by MFC in a Financial Planning Agreement
engagement generally encompass eight primary areas: Personal Financial
Statement; Tax Planning; Retirement Planning; Estate Planning; Cash Flow
Management; Education Planning; Investment Planning; and Insurance
Planning.
Financial Planning Agreement Operation: MFC is authorized to rely on
information provided by the client. MFC may recommend the services of itself
and/or other professionals to implement its recommendations. Clients are
advised that a conflict of interest exists if MFC recommends its own services.
The client is under no obligation to act upon any of the recommendations
made by MFC under a financial planning engagement and/or engage the
services of any such recommended professional, including MFC. The client
retains discretion over all such implementation decisions and is free to accept
or reject any of MFC’s recommendations. It is a client’s responsibility to
promptly notify MFC if there is ever any change in the client’s financial
situation or investment objectives for the purpose of reviewing, evaluating, or
revising MFC’s previous recommendations and services.
2. Total Service Agreement - Financial Planning and Portfolio Management Services
for Individuals and/or Small Businesses: The Total Service Agreement
engagement provides all the comprehensive financial planning services included in
the Financial Planning Agreement and adds investment management services. MFC
uses a sophisticated series of proprietary systems and tools to manage a client’s
investment portfolio in accordance with the Financial Plan and agreed upon
investment strategy. All client portfolios are managed independently and are
customized to the client’s situation, but are based on MFC’s primary investment
philosophy and “model” portfolios. Client models are generally limited to the use of
mutual funds and ETFS. For some qualified clients, we may suggest certain limited
partnerships. Clients may occasionally impose restrictions on investing in particular
securities or accounts. These must be adequately disclosed to MFC.
Clients are advised to promptly notify the firm if there are ever any changes in their
financial situation or investment objectives or if they wish to impose any reasonable
restrictions upon MFC’s management services.
3. Hourly Services: MFC will provide Financial Planning Services on an hourly basis,
and the fees are described in Item 5. These services mimic the services on the full
Financial Planning agreement, but are modular rather than comprehensive.
4. Pension Consultant: MFC provides consulting services to select company 401k
plans. These services may include the following:
• monitoring the selection of investments for the plan
• providing investment education services to plan participants,
• providing some assistance with administrative services (helping to process
RMD’s, review filings of certain documents)
MFC will not act as a trustee on the plan or a TPA for the purposes of ensuring the
plan is administered fairly to all plan participants.
ADDITIONAL DISCLOSURES
Retirement Plan Rollovers – No Obligation / Potential for Conflict of Interest: A
client or prospective client leaving an employer typically has four options regarding an
existing retirement plan (and may engage in a combination of these options): (i) leave
the money in the former employer’s plan, if permitted, (ii) roll over the assets to the
new employer’s plan, if one is available and rollovers are permitted, (iii) roll over to
an Individual Retirement Account (“IRA”), or (iv) cash out the account value (which
could, depending upon the client’s age, result in adverse tax consequences). If MFC
recommends that a client roll over their retirement plan assets into an account to be
managed by MFC, such a recommendation creates a conflict of interest if MFC will
earn an advisory fee on the rolled over assets. No client is under any obligation to roll
over retirement plan assets to an account managed by MFC.
Use of Mutual Funds: While MFC may recommend allocating investment assets to
mutual funds that are not available directly to the public, MFC may also recommend
that clients allocate investment assets to publicly-available mutual funds that the client
could obtain without engaging MFC as an investment adviser. However, if a client or
prospective client determines to allocate investment assets to publicly-available
mutual funds without engaging MFC as an investment adviser, the client or
prospective client would not receive the benefit of MFC’s initial and ongoing
investment advisory services.
Other mutual funds, such as those issued by Dimensional Fund Advisors (“DFA”), are
generally only available through selected registered investment advisers. MFC may
allocate client investment assets to DFA mutual funds. Therefore, upon the termination
of MFC’s services to a client, restrictions regarding transferability and/or additional
purchases of, or reallocation among DFA funds will apply.
Unaffiliated Private Investment Funds. MFC may provide investment advice
regarding unaffiliated private investment funds. MFC’s role relative to the private
investment funds shall be limited to its initial and ongoing due diligence and
investment monitoring services. If a client determines to become a private fund
investor, the amount of assets invested in the fund(s) shall be included as part of
“assets under management” for purposes of MFC calculating its investment advisory
fee. MFC’s clients are under absolutely no obligation to consider or make an
investment in a private investment fund(s).
Private investment
funds generally involve various risk factors, including, but not
limited to, potential for complete loss of principal, liquidity constraints and lack of
transparency, a complete discussion of which is set forth in each fund’s offering
documents, which will be provided to each client for review and consideration. Unlike
liquid investments that a client may maintain, private investment funds do not
provide daily liquidity or pricing. Each prospective client investor will be required to
complete a Subscription Agreement, pursuant to which the client shall establish that
they are qualified for investment in the fund, and acknowledges and accepts the
various risk factors that are associated with such an investment.
In the event that MFC references private investment funds owned by the client on any
supplemental account reports prepared by MFC, the value(s) for all such private
investment funds shall reflect either the initial purchase and/or the most recent
valuation provided by the fund sponsor. If the valuation reflects the initial purchase
price (and/or a value as of a previous date), the current value(s) (to the extent
ascertainable) could be significantly more or less than the original purchase price.
Limitations of Financial Planning and Non-Investment Consulting Services: To the
extent requested by a client, MFC may provide financial planning and related consulting
services regarding non-investment related matters, such as estate planning, tax planning,
insurance, etc. MFC does not serve as a law firm, accounting firm, or insurance agency,
and no portion of MFC’s services should be construed as legal, accounting, or insurance
implementation services. Accordingly, MFC does not prepare estate planning documents,
tax returns or sell insurance products. To the extent requested by a client, MFC may
recommend the services of other professionals for certain non-investment
implementation purposes (i.e. attorneys, accountants, insurance agents, etc.). Clients are
reminded that they are under no obligation to engage the services of any such
recommended professional. The client retains absolute discretion over all such
implementation decisions and is free to accept or reject any recommendation made by
MFC or its representatives. However, if the client engages any unaffiliated recommended
professional, and a dispute arises thereafter relative to such engagement, the client agrees
to seek recourse exclusively from and against the engaged professional.
4.C. Client Investment Objectives/Restrictions
Prior to providing investment advisory services, and/or consulting services, MFC
requires each client to enter into a written agreement that sets forth the terms and
conditions under which MFC will render its services (the “Investor Advisory
Agreement”). The firm works closely with its clients to identify their goals, objectives,
risk tolerance and liquidity needs and then constructs a portfolio tailored to the
individual client.
Each client is advised that it remains their responsibility to promptly notify MFC if there
is ever any change in their financial situation, investment objectives, or if they wish to
impose reasonable restrictions for the purpose of reviewing, evaluating or revising MFC’s
previous recommendations and/or services. In performing its services, MFC shall not be
required to verify any information received from the client or from the client’s other
professionals and is expressly authorized to rely thereon.
4.D. Wrap Fee Program
MFC provides discretionary investment management services on a wrap fee basis in
accordance with our investment management wrap fee program (the “Program”). The
services offered under, and the corresponding terms and conditions pertaining to, the
Program are discussed in the Wrap Fee Program Brochure, a copy of which is presented
to all prospective Program participants. Under the Program, MFC is able to offer
participants discretionary investment management services, for a single specified annual
Program fee, inclusive of trade execution, custody, reporting, account maintenance,
investment management fees. However, clients may be responsible for, but not limited to,
trustee fees, mutual fund expenses, ETF expenses, mark-ups, mark- downs, transfer taxes,
fees charged by independent managers and/or separately managed accounts, odd lot
differentials, exchange fees, interest charges, American Depository Receipt agency
processing fees, and any charges, taxes or other fees mandated by any federal, state or
other applicable law or otherwise agreed to with regard to client accounts (Such fees are
in addition to any fees paid by the client to MFC and are between the client and the
account custodian).
The terms and conditions for client participation in the Program are set forth in detail in
the Wrap Fee Program Brochure, which is presented to all prospective Program
participants in accordance with disclosure requirements. All prospective Program
participants should read both our Brochure and the Wrap Fee Program Brochure, and ask
any corresponding questions that they may have, prior to participation in the Program.
As indicated in the Wrap Fee Program Brochure, participation in the Program may cost
more or less than purchasing such services separately. When managing a client’s account
on a wrap fee basis, MFC shall receive as payment for its asset management services, the
balance of the wrap fee after all other costs (including account transaction fees)
incorporated into the wrap fee have been deducted. As also indicated in the Wrap Fee
Program Brochure, the Program fee charged by MFC for participation in the Program may
be higher or lower than those charged by other sponsors of comparable wrap fee
programs.
Because Program transaction fees and/or commissions are being paid by MFC to the
account custodian/broker-dealer, MFC could have an economic incentive to maximize its
compensation by seeking to minimize the number of trades in the client's account.
There is no significant difference between how MFC manages wrap fee accounts and non-
wrap fee accounts. However, as stated above, if a client determines to engage MFC on a
wrap fee basis the client will pay a single fee for bundled services (i.e. investment
advisory, brokerage, custody). The services included in a wrap fee agreement will depend
upon each client’s particular need. If the client determines to engage MFC on a non-wrap
fee basis the client will select individual services on an unbundled basis, paying for each
service separately (i.e. investment advisory, brokerage, custody).
4.E. Assets Under Management
As of December 31, 2022, MFC managed $344,443,003 in total Regulatory Assets Under
Management:
• $335,318,511 in assets managed on a discretionary basis; and
• $9,124,492 in assets managed on a non-discretionary basis.