Description of Advisory Services
Cannon Financial Strategists, Inc. (“Cannon”) is a privately-held, registered investment
advisory firm. Established in 1983, Cannon provides wealth management and financial
planning services to individuals, families, and institutions. Cannon also provides
retirement plan consulting and advising services for institutional retirement plans.
Cannon’s services are summarized below as I.) Investment Advisory Services, II.)
Financial Planning Services, and III.) Retirement Plan Advisory Services. Our owners
are Kim Young, Kelly Dixon, and George (Hamp) Williams.
I. Investment Advisory Services
Investment advisory services are provided primarily to individual clients. These services
include a review of the Client’s current asset positions, investment objectives, risk
preferences, and overall financial plan. Advice is provided to Clients regarding, but not
limited to, taxable, tax-deferred, tax-exempt, IRA and investment-only retirement
accounts.
Advice is given on the appropriateness of investments and securities within the
framework of a Client’s asset allocation model. Advice is not provided on the value of a
specific security.
The advisor utilizes Investment Policy Statements (“IPS”) to note Client information,
recommendations made, the agreed upon service model, and portfolio allocations.
Investment advisory services typically fall into four categories. For each type of the
investment advisory service(s) detailed below, a Client will enter into a written
agreement with Cannon:
a) Wealth Management Services – The advisor works with the Client to develop an
intelligent investment allocation across all accounts of a household. This single
allocation allows each individual account to have unique holdings based on its
tax type. This strategy is used for tax efficiency. The allocation is based upon a
client’s needs, risk tolerance, and overall financial plan. Wealth Management
services include financial planning around accumulation, distribution, taxation,
and other general financial matters.
b) Asset Management Services – The advisor works with the Client to develop an
asset allocation strategy which is then implemented. Asset Management Clients
are provided specific models for each individual account under management.
Strategies follow model portfolios and may include some basic financial planning
advice.
c) Direct Mutual Fund Services – The advisor works with the Client to develop an
asset allocation strategy which is then implemented at a mutual fund company.
Direct Mutual Fund clients are provided specific models for each individual
account under management. Strategies follow model portfolios and may include
some basic financial planning advice.
Discretionary Management
For Clients that desire Wealth Management Services, Asset Management Services, or
Direct Mutual Fund Services, authority is granted to Cannon through the Investment
Advisory Agreement for discretionary management of client account(s). We are granted
authority to make determinations regarding securities and securities quantities to be
bought and sold for clients. This discretion is subject to Client guidelines outlined within
the clients’ IPS.
IRA Rollover Recommendations
Effective December 20, 2021 (or such later date as the US Department of Labor
(“DOL”) Field Assistance Bulletin 2018-02 ceases to be in effect), for purposes of
complying with the DOL’s Prohibited Transaction Exemption 2020-02 (“PTE 2020-02”)
where applicable, we are providing the following acknowledgment to clients. When we
provide investment advice to clients regarding a client’s retirement plan account or
individual retirement account, we are fiduciaries within the meaning of Title I of the
Employee 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 clients’ interests, so we operate under a special rule that
requires us to act in the client’s best interest and not put our interest ahead of clients.
Under this special rule’s provisions, we must:
• Meet a professional standard of care when making investment recommendations
(give prudent advice);
• Never put our financial interests ahead of clients when making recommendations
(give loyal advice);
• Avoid misleading statements about conflicts of interest, fees and investments;
• Follow policies and procedures designed to ensure that we give advice that is in
the client’s best interest;
• Charge no more than is reasonable for our services; and
• Give clients basic information
about conflicts of interest.
We benefit financially from the rollover of clients’ assets from a retirement account to an
account that we manage or provide investment advice, because the assets increase our
assets under management and, in turn, our advisory fees. As a fiduciary, we only
recommend a rollover when we believe it is in the client’s best interest.
II. Financial Planning Services
Financial planning services are provided to individual Clients including, but not limited to
providing advice regarding investments, tax planning, insurance, estate planning,
retirement planning, educational planning, business planning, and employee benefits.
Financial planning begins with an initial interview which is used to develop a financial
plan. The advisor may or may not be involved with the implementation of such
recommendations. Recommendations provided are based on individual objectives and
needs, with the goal of obtaining the maximum efficiency of each Client dollar within the
framework of Client objectives.
III. Retirement Plan Advisory Services
Investment advisory services provided to a retirement plan vary depending upon depth
of services desired by the plan sponsor. Each Client/Advisor relationship is different and
discussions prior to engagement should be had to develop the appropriate service
model. Services provided to a retirement plan or to its participants typically include
some or all of the following:
Plan Committee Services
a) Preparation of Investment Policy Statement – The advisor will design and
prepare an IPS for the Plan based upon consultation with the Client to ascertain
investment objectives, policies, and constraints. The IPS is then used to monitor
the plan investments on an ongoing basis.
b) Investment Recommendations – The advisor will recommend specific
investments, for selection by the Client, to be held by the Plan or, in the case of a
participant-directed defined contribution plan, offered as investment options
under the Plan consistent with the policies outlined in the IPS. Additionally, the
advisor will recommend investment replacements, for selection by Client, if an
existing investment is no longer suitable as an investment option and will assist
in the transition to the replacement option if requested by the Client.
c) Investment Review – The advisor will perform a periodic review of investment
performance in accordance with the IPS guidelines to ensure compliance. The
investments will be evaluated according to the established guidelines as outlined
in the IPS and investment portfolio characteristics, performance of duties, and
investment process and philosophy. Under applicable circumstances, the advisor
will monitor the appropriateness and continued suitability of each of the
investments with a view to complying with the “broad range” requirement in the
Regulation under ERISA Section 404(c).
d) Education Services to Plan Committee - The advisor will provide training for the
members of the Plan Committee with regard to their service on the Committee,
including guidance with respect to fiduciary duties.
Plan Participant Services
a) One-on-One Participant Meetings – Members of the advisory team meet with
individual plan participants (or the participant and their beneficiary) to review the
plan, investment options, and asset allocation. Discussions may include
retirement readiness, income replacement, and other financial planning matters,
as the participant desires.
b) Group Presentations – Members of the advisory team present on enrolling in the
plan and a variety of educational seminars on financial planning topics designed
to assist participants with making sound financial decisions.
Plan Design & Construction
a) Plan Design Consulting – The advisor will review current Plan design.
Recommendations for modifications/amendments will be provided.
b) Plan Search Support – The advisor will manage the preparation, distribution, and
evaluation of Request for Proposal (RFP), finalist interviews, and conversion
support.
c) Vendor Review – The advisor compares the current vendor(s) products, services,
and pricing with other options currently available. This service may include
comparison to benchmarks. Included in these services is a full review of the
Plan’s fee structure. The advisor will provide a review of the direct and indirect
compensation within the Plan, including revenue-sharing payments.
Assets Under Management
AUM (discretionary): $ 1,288,538,041
AUM (non-discretionary): $ 58,551,358
Total AUM: $ 1,347,089,399
Date of AUM calculation: 12/31/2023