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 — 4 — 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%.
— 5 — 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. — 6 — 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 — 7 — 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.