Advisor's Choice Asset Management Plus Program Client Agreement

Transcription

1 Advisor's Choice Asset Management Plus Program Client Agreement The undersigned (the "Client") hereby retains H. Beck, Inc. ("HBI"), an SEC Registered Investment Advisor, through its Investment Adviser Representative ("IAR") specified below to provide the services described below with respect to the cash, securities and any other investments (collectively, the "Program Assets") in accordance with the terms and conditions of the Advisor's Choice Asset Management Plus program (the "Program") as set forth in this Agreement. 1. OUR SERVICES (a) Investment Proposal. By responding to an investor profile questionnaire (the "Questionnaire") which we provided to Client, Client has informed us of Client's investment objective, risk tolerance and investment time horizon for the Program Assets, any reasonable restrictions as described in section 1(c) of this Agreement that Client wishes to impose on the management of Program Assets and other information provided in response to the Questionnaire. Client has received from us an investment proposal (the "Investment Proposal"), incorporated into this Agreement by reference, that provides Client with a proposed investment plan that is based upon an analysis of Questionnaire responses. Client has also informed us of Client's financial situation. (b) Asset Allocation Services. If Client has elected to receive Asset Allocation Services, the Investment Proposal contains a proposed, long-term strategy for allocating the Program Assets among a combination of the major asset classes in the capital markets that is based upon an analysis of Questionnaire responses. Client acknowledges that the proposed allocation contained in the Investment Proposal is based upon and objectively correlated to Questionnaire responses and is provided to assist Client in making informed asset allocation decisions. In determining whether to adopt, modify or reject the proposed asset allocation, Client should consider all of Client's assets, income and investments. (c) Client Preferences. In response to the Questionnaire, Client may impose a restrictions on the percentage of Program Assets allocated to certain asset classes. Client understands and acknowledges that any restrictions Client imposes on an allocation to a particular asset class may result in the development of an asset allocation proposal for Client that deviates from the allocation HBI would otherwise propose. Client understands and agrees that Client will be solely responsible for the investment of the Program Assets, that HBI will not exercise any investment discretion over such Program Assets and that HBI will not purchase or sell Program Assets without first obtaining Client's approval. (d) Mutual Fund Review, Evaluation and Presentation. If Client has elected to receive Asset Allocation Services, the Investment Proposal may contain a presentation of several mutual funds, portfolio managers, and/or other investments for Client's consideration. The mutual funds presented to Client with respect to each asset class 1

2 will include certain no-load and load-waived classes of mutual funds (each, a "Fund" and collectively, the "Funds"). The Funds selected will be reviewed periodically and evaluated by HBI and/or its IAR. (e) Performance Measurement and Transactional Reporting Services. On a quarterly basis, HBI or its IAR will provide Client with a report describing the performance of the Program Assets. Investment firms sponsoring the individual investments or exercising custody over Program Assets will provide Client with confirmations of all securities transactions and periodic statements, no less than quarterly, indicating, among other things, the valuation of the Program Assets and all disbursements. (f) Transactions. Client hereby authorizes HBI to effect transactions with respect to Program Assets invested in Funds ("Fund Assets") as directed by Client. In no event is either HBI or your IAR obligated to effect any transaction for Client which we believe would violate any applicable state or federal law, rule or regulation, the regulations of any regulatory or self regulatory body, or firm policy and we may decline to accept any orders with respect to Program Assets or we may deliver out Program Assets or we may require that Client transfer its Program Assets from us. Client understands that if it does not promptly transfer its Program Assets upon our demand, we reserve the right to issue and deliver certificates to the Client, where applicable, at our discretion. (g) Client Acknowledgement. Client acknowledges that in providing services under this Agreement, we are relying on the Investment Proposal that is based upon Questionnaire responses that Client furnished to us at the time the Investment Proposal was prepared. HBI, our employees and representatives shall not be liable for any misstatement or omission contained in the Questionnaire or any loss, liability, claim, damage or expense, whatsoever, as incurred, arising out of or attributable to such misstatement or omission. Client may, at any time, submit a revised or new Questionnaire and HBI will prepare for approval by Client a new Investment Proposal based on new Questionnaire responses. Client understands that there can be no assurance that its investment objective as stated as a Questionnaire response can be achieved. (h) Other Clients. Client acknowledges that HBI or IAR may perform, among other things: investment planning; asset allocation; manager review, evaluation and presentation; mutual fund and/or other investment review, evaluation and presentation; performance measurement reporting; execution; and other services for other clients and earn fees, brokerage commissions and other consideration therefore. Client recognizes and agrees that we may give advice and take action in the performance of our duties to any other clients that may differ from the advice given or the timing or nature of the action taken, with respect to the Program Assets of Client. 2. FEES (a) Fees. Fees for the services provided to Client by HBI and IAR under this Agreement ("Program Fees") will be according to the schedule attached hereto as Exhibit A. Client understands that the Funds selected by Client as well as any HBI ACAMP+ Agmt. Revised 07/26/11 2

3 investment company in which Program Assets may be invested, including, but not limited to, money market funds in which uninvested cash balances may be invested, will charge separate fees and expenses as set forth in their Prospectuses, as they may be amended from time to time. These fees and expenses are paid by those Funds or investment companies but ultimately borne by Client as a shareholder. These fees and expenses may include investment advisory, administrative, distribution, transfer agent, custodial, legal, audit and other customary fees and expenses related to investment in investment companies and are in addition to Program Fees and will generally not be deducted from Program Fees, and some of which may be paid to HBI in its role as broker-dealer and retained by HBI. (b) Funds. Client understands that Client may be able to purchase shares of the Funds outside of the Program directly from the mutual fund company issuing them, its principal underwriter or distributor without paying the Program Fee on such shares (but subject to any applicable sales charges). Certain of the Funds are offered generally to the public without a sales charge. In the case of those Funds that are offered generally to the public with a sales charge, the prevailing sales charge (as described in a Fund's Prospectus) may be more or less than the applicable Program Fee. Certain of the Funds may pay a shareholder servicing fee directly to HBI which will not be deducted from Program Fees. (c) Calculations. Program Fees are calculated quarterly based on the market value of the Program Assets as of the last business day of the preceding calendar quarter. In computing the market value of Fund Assets, shares of the Funds shall be valued at their respective net asset values as calculated on the valuation date in accordance with each Fund's Prospectus. Any such valuation shall not be deemed a guarantee of any kind whatsoever with respect to the value of those Fund Assets. The quarterly Program Fee will be deducted from Client's account on or about the twentieth (20th) business day after the commencement of each quarter (or, in the case of Client's first quarter of Client's first year, upon establishing the Program). In the event we effect purchases of shares of Funds as directed by Client after the first day of a calendar quarter, the Program Fee for such quarter shall be calculated proportionately with respect to the number of days remaining in such quarter and based on the market value of such Program Assets as of the date such management commences or purchases are effected. In the event this Agreement is terminated prior to the last day of a calendar quarter, a pro rata portion, based upon the number of days remaining in such quarter, of the quarterly Program Fee with respect to such Program Assets paid in advance will be refunded to Client. Client shall be responsible for verifying the accuracy of any fee calculation. Client hereby agrees to indemnify and hold Custodian, its members, partners, officers, directors, agents, employees, control persons, and affiliates harmless, to the maximum extent permitted by applicable laws, from any and all claims, liabilities, losses, lost profit or loss of market value in Client's account, costs, indebtedness or liabilities arising from the payment of advisory fees under this program. In the event that fees are not to be deducted directly from a custodial account, Client agrees to pay the invoice amount within 15 days of receipt. (d) Coverage. Program Fees cover, as applicable, investment planning, Asset Allocation Services, charges for transactions including brokerage commissions, 3

4 national securities exchange fees, securities review, evaluation and presentation and performance measurement, but do not cover any margin interest; national securities exchange fees; charges for transactions including brokerage commissions, mark-ups, mark-downs and spreads earned by HBI on non-program Assets; costs associated with exchanging currencies; fees and expenses charged by Funds selected by Client or any investment company in which Program Assets may be invested; wire transfer and other service fees; or other fees required by law. Client also understands that markups, mark-downs and spreads charged by a dealer unaffiliated with HBI may be included in the price of certain transactions executed on behalf of Client. Client will pay the public offering price on securities purchased from an underwriter or dealer involved in a distribution, a portion of which may be paid to HBI. (e) Negotiable Fees. Some Program Fees may be negotiated. To the extent that Program Fees charged are negotiable, they may differ from client to client based upon a number of factors, including, but not limited to, the amount of the Program Assets and the client-related services to be provided. Moreover, Program Fees may vary as a result of the application of prior fee schedules depending upon a Client's Program inception date. In addition, different fee schedules for the Program may apply to clients who also participate in our other programs. 3. REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGEMENTS MADE BY CLIENT (a) Client hereby represents and warrants that Client is of full age and has full power, authority and capacity to execute and deliver this Agreement and all documents relating to the Program Assets, and that this Agreement constitutes a legal, valid and binding obligation of Client enforceable against Client in accordance with its terms except as enforcement may be limited by bankruptcy, insolvency, moratorium or other laws affecting the enforcement of creditors' rights generally. Client agrees to advise us of any event which might affect this authority or the propriety of this Agreement. (b) Client hereby represents and warrants that unless Client gives us written notice to the contrary, Client is not, and will not be, an employee of any exchange or a member firm of any exchange or the Financial Industry Regulatory Authority ("FINRA"), and no person other than Client who has such affiliation has or will have a direct or indirect interest in the Program Assets. (c) Client represents and warrants that Client has responded to a Questionnaire, that the Questionnaire responses and financial situation information provided in the Questionnaire are complete and accurate in all respects, that Client has read the Investment Proposal and agrees that the investor profile information contained therein is complete and accurate in all respects and reflects the proposal Client has chosen, that Client will notify us of any material change in Client's circumstances which might affect the manner in which Program Assets should be invested, and that Client will provide to us any such information as we shall request from time to time. Neither HBI nor its IAR nor any of their affiliates, shall have any liability for Client's failure to inform these parties, in a timely manner, of any material change in Client's financial circumstances or to provide the parties with any material information as to 4

5 Client's financial status or objectives as these parties may reasonably request. Client confirms the acknowledgement made under Paragraph 1(g) above. (d) Client agrees and acknowledges that neither HBI nor IAR guarantee that Client's investment objectives will be achieved by the services rendered under this Program and that past performance is not a guarantee of any future result. Client represents that Client has determined that each Fund Client has selected is suitable for Client and that Client has had the opportunity to review and understands the investment styles of any investment selected and the methodologies and risk factors related to such styles. (e) Client acknowledges that the Program Fee will be imposed on all assets designated as Program Assets, including Fund shares on which Client may have previously paid a sales charge. Also, to the extent that cash used for investment in Program Assets comes from or may come from redemptions of Client's other non-program investments, Client should consider the costs, if any, of sales charges previously paid and redemption fees that would be incurred. Such redemption fees would be in addition to the Program Fee on those Fund Assets. Client should be aware that redemptions and exchanges between Funds may have tax consequences which should be discussed with Client's independent tax advisor. (f) Client represents and acknowledges that Client has read, understands and agrees to the information regarding Fees contained in Paragraph 2 of this Agreement. 4. ASSIGNMENT, AMENDMENT OR TERMINATION OF AGREEMENT (a) This Agreement may not be assigned (within the meaning of the Investment Advisers Act of 1940, as amended (the "Advisers Act") by any party to this Agreement without the prior written consent of all other parties. (b) HBI shall have the right to amend this Agreement upon thirty (30) days' notice to Client by modifying or rescinding any of its existing provisions or by adding a new provision(s). Any such amendment shall be effective as of a date to be established by HBI. This Agreement contains the entire agreement between the parties with respect to the subject matter contained herein. The provisions of this Agreement shall not be superseded or otherwise limited by the effect of any provision contained in any separate agreement between Client and any other party to this Agreement. (c) This Agreement may be terminated at will by either party upon written notice to the other. Notwithstanding anything to the contrary herein, if Client terminates this Agreement within five (5) business days of our acceptance of this Agreement, Client will receive a full refund of all Program Fees paid hereunder. Any termination of this Agreement will become effective upon receipt of such notice by us. Upon termination of this Agreement by either party, HBI will not be under any obligation to provide further services with regard to Program Assets and Client will be solely responsible for the investment of Program Assets and for instructing HBI in writing regarding any Program Assets. Client agrees that any termination of this Agreement will not affect the liabilities or obligations of the parties under this Agreement which arise from 5

6 transactions initiated prior to termination, including the provisions regarding arbitration, which shall survive any termination of this Agreement. HBI retains the right to complete any transaction(s) open as of the termination date and to retain any amounts of Program Assets sufficient to effect such completion. 5. GOVERNING LAW; ARBITRATION [a} THIS AGREEMENT CONTAINS A PREDISPUTE ARBITRATION CLAUSE. BY SIGNING AN ARBITRATION AGREEMENT THE PARTIES AGREE AS FOLLOWS: ALL PARTIES TO THIS AGREEMENT ARE GIVING UP THE RIGHT TO SUE EACH OTHER IN COURT, INCLUDING THE RIGHT TO A TRIAL BY JURY, EXCEPT AS PROVIDED BY THE RULES OF THE ARBITRATION FORUM IN WHICH A CLAIM IS FILED. ARBITRATION AWARDS ARE GENERALLY FINAL AND BINDING; A PARTY'S ABILITY TO HAVE A COURT REVERSE OR MODIFY AN ARBITRATION AWARD IS VERY LIMITED. THE ABILITY OF THE PARTIES TO OBTAIN DOCUMENTS, WITNESS STATEMENTS AND OTHER DISCOVERY IS GENERALLY MORE LIMITED IN ARBITRATION THAN IN COURT PROCEEDINGS. THE ARBITRATORS DO NOT HAVE TO EXPLAIN THE REASON(S) FOR THEIR AWARD. THE PANEL OF ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF ARBITRATORS WHO WERE OR ARE AFFILIATED WITH THE SECURITIES INDUSTRY. THE RULES OF SOME ARBITRATION FORUMS MAY IMPOSE TIME LIMITS FOR BRINGING A CLAIM IN ARBITRATION. IN SOME CASES, A CLAIM THAT IS INELIGIBLE FOR ARBITRATION MAY BE BROUGHT IN COURT. THE RULES OF THE ARBITRATION FORUM IN WHICH THE CLAIM IS FILED, AND ANY AMENDMENTS THERETO, SHALL BE INCORPORATED INTO THIS AGREEMENT. YOU ACKNOWLEDGE THAT ANY DISPUTE INVOLVING THIS AGREEMENT THAT CANNOT BE SETTLED SHALL BE TAKEN TO ARBITRATION. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, THIS AGREEMENT TO ARBITRATE DOES NOT CONSTITUTE A WAIVER OF THE RIGHT TO SEEK A JUDICIAL FORUM TO THE EXTENT THAT SUCH A WAIVER WOULD BE VOID UNDER APPLICABLE LAW. YOU AND HBI EACH AGREE THAT, EXCEPT AS INCONSISTENT WITH THE PRECEDING SENTENCE, ALL CLAIMS OR CONTROVERSIES, AND ANY RELATED ISSUES, WHICH MAY ARISE AT ANY TIME BETWEEN THE PARTIES (INCLUDING HBI'S REPRESENTATIVES, DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS) CONCERNING ANY SERVICE, TRANSACTION OR ORDER PERFORMED BY HBI; THE CONDUCT OF HBI OR ITS REGISTERED REPRESENTATIVES, DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS; THE CONSTRUCTION, PERFORMANCE, OR BREACH OF THIS OR ANY OTHER AGREEMENT BETWEEN THE PARTIES, WHETHER ENTERED INTO PRIOR TO, ON, OR SUBSEQUENT TO THE DATE HEREOF; THE BREACH OF ANY 6

7 COMMON LAW OR STATUTORY DUTY; OR THE VIOLATION OF ANY FEDERAL OR STATE SECURITIES LAW, THE RACKETEER INFLUENCED AND CORRUPT ORGANIZATION ACT (RICO), OR ANY OTHER FEDERAL OR STATE LAW OF ANY NATURE, SHALL BE RESOLVED BY ARBITRATION RATHER THAN BY LAWSUIT IN A COURT OF LAW OR EQUITY. AS HBI IS A MEMBER OF THE FINANCIAL INDUSTRY REGULATORY AUTHORITY ("FINRA") (FORMERLY, THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. "NASD"), ANY CONTROVERSY AMONG THE PARTIES RELATING TO THIS AGREEMENT SHALL BE SUBMITTED TO ARBITRATION BEFORE FINRA, IN ACCORDANCE WITH FINRA RULES. ARBITRATION MUST BE COMMENCED BY SERVICE UPON THE OTHER PARTY OF A WRITTEN DEMAND FOR ARBITRATION OR A WRITTEN NOTICE OF INTENTION TO ARBITRATE. JUDGMENT UPON ANY SUCH AWARD MAY BE ENTERED BY ANY COURT OF COMPETENT JURISDICTION. NO PERSON SHALL BRING A PUTATIVE OR CERTIFIED CLASS ACTION TO ARBITRATION, NOR SEEK TO ENFORCE ANY PRE-DISPUTE ARBITRATION AGREEMENT AGAINST ANY PERSON WHO HAS INITIATED IN COURT A CLASS ACTION OR WHO IS A MEMBER OF A PUTATIVE CLASS AND WHO HAS NOT OPTED OUT OF THE CLASS WITH RESPECT TO ANY CLAIMS ENCOMPASSED BY THE PUTATIVE CLASS ACTION UNTIL: (I) THE CLASS CERTIFICATION IS DENIED; (II) THE CLASS IS DECERTIFIED; OR (III) THE PERSON IS EXCLUDED FROM THE CLASS BY THE COURT. SUCH FORBEARANCE TO ENFORCE AN AGREEMENT TO ARBITRATE SHALL NOT CONSTITUTE A WAIVER OF ANY RIGHTS UNDER THIS AGREEMENT EXCEPT TO THE EXTENT STATED HEREIN. (b) This Agreement shall be governed by the laws of the State of Maryland, and shall inure to the benefit of HBI's and/or IAR's successors and assigns, and shall be binding on Client and/or Client's representatives, attorneys-in-fact, heirs, executors, administrators and assigns. In the event of Client's death, any order which Client had given HBI shall be binding on Client's estate representative until we receive actual notice thereof. Notice primarily to, in conjunction with, or incident to arbitration may be sent to Client by mail, and personal service is hereby waived. 6. MISCELLANEOUS (a) It is understood that Client may make additions to and withdrawals of Program Assets. Notice shall be directed to H. Beck, Inc., 6600 Rockledge Drive 6th Floor, Bethesda MD 20817, or as otherwise requested by H. Beck by written notice to Client. (b) If any provision or condition of this Agreement shall be held to be invalid or unenforceable by any court, regulatory or self-regulatory agency or body, such invalidity or unenforceability shall attach only to such provision or condition. Our failure to insist at any time upon strict compliance with this Agreement or with any of its terms or any continued course of such conduct on its part shall not constitute or be considered a waiver by us of any of our rights. 7

8 (c) Except as otherwise provided herein, all written communications to HBI pursuant to this Agreement shall be sent to H. Beck, Inc., 6600 Rockledge Drive, 6th Floor, Bethesda, MD In the absence of written notice from Client of a change in address, all communications mailed, wired, delivered, or telegraphed to Client at the address specified by Client will be deemed to have been personally delivered to Client and Client agrees to waive personal service and all claims resulting from failure to receive such communications. (d) Client acknowledges that HBI and IAR, their licensors and/or other affiliates, suppliers, and their employees, are neither agents nor employees of nor affiliate of any Fund or investment or custodial firm and that HBI and IAR shall not be liable to Client or any other party under this Agreement for any act of omission, negligence, or willful malfeasance of another such party or its employees, assigns, affiliates, and/or agents. (e) Client hereby agrees to indemnify and hold HBI, its members, partners, officers, directors, assigns, successors, agents, employees, control persons, and affiliates harmless, to the maximum extent permitted by applicable laws, from any and all claims, liabilities, taxes, losses, lost profit or loss of market value in Client's account, costs, indebtedness or liabilities arising from the investment decisions made by any Fund under this Program; provided that, Client shall not be required to indemnify HBI hereunder for any claims that are finally judicially determined to have resulted from the negligence, bad faith, violation of federal or state securities laws, or the breach by HBI of any term of this Agreement. This provision shall survive the termination of this and any other agreement made by and between the parties hereto concerning the rendering of services under this Program. (f) Client further agrees to indemnify and hold HBI, its members, partners, officers, directors, assigns, successors, agents, employees, control persons, and affiliates harmless, to the maximum extent permitted by applicable laws, from all loss, cost, indebtedness, liability, taxes and expense (including, without limitation, court/arbitration costs and attorneys' fees and expenses) arising out of (i) any misrepresentation or omission of a material fact by Client; or (ii) Client's failure to perform his/her obligations under this Agreement. This provision shall survive the termination of this Agreement and any other agreement made by and between the parties hereto concerning the rendering of services under this Program. (g) Client understands that Client retains the right to proceed directly as a security holder against any issuer of any security that constitutes Program Assets and shall not be obligated to join any person involved in the operation of the Program or any other client in the Program as a condition precedent to initiating any such proceeding. (h) By signing this Agreement, Client acknowledges receipt of a copy of this Agreement and the Form ADV 2A and 2B or other disclosure document as required under Rule under the Advisers Act. Client acknowledges that he/she shall have the right to terminate this Agreement, without penalty, within five (5) business days from the receipt of the Form ADV 2A and 2B or other disclosure document as required by Rule 2043 under the Advisers Act. 8

9 Client hereby authorizes Pershing, LLC to act as Custodian for the Program Assets, and authorizes Pershing, LLC to pay Program Fees payable with respect to Program Assets as calculated by HBI from account number to HBI. The parties have each executed this Agreement intending to be legally bound in accordance with its terms as of the date indicated below. THIS AGREEMENT CONTAINS PRE-DISPUTE ARBITRATION PROVISIONS IN SECTION 5 ON PAGES 6 AND 7. H. BECK, INC. CLIENT By: Signature Client Signature/Print Name Print Name/Title Client Signature/Print Name H. Beck, Inc. Investment Adviser Representative ("IAR") IAR Signature/Print Name Agreed to this day of,. 9

10 EXHIBIT A: PROGRAM FEE SCHEDULE Program Fees are as follows unless a lesser rate is indicated: Program Assets Up To $250,000 $250,001 - $500,000 $500,001 - $1,000,000 $1,000,001 - $5,000,000 $5,000,001+ Program Fee 2.10% 2.00% 1.90% 1.50% 1.10% NOTE: Fee schedules are retroactive to first dollar based on quarter ending valuations. Acknowledged: Client Name Client Name Signature Signature Date Date 10