Click on the hair and in the general palette you will see the second section has the "conform to" option with the character James (or whichever). Click on this and set it to "none". The hair may disappear from the preview, but don't worry.
Open James in the instances palette so you can read all of his body parts. Now drag the conforming hair in the instances palette onto the "head" in the james list.
The hair is now linked to the head in the right place, the morphs and everything will work as usual. To get all the morphs, click on "morph regions" back in the general tab.