REFERRAL AGREEMENT AND ACKNOWLEDGEMENT

Transcription

1 FIDELITY WEALTH ADVISOR SOLUTIONS REFERRAL AGREEMENT AND ACKNOWLEDGEMENT Please keep a copy of this Referral Agreement and Acknowledgement (the Agreement ) for your records. Fidelity Wealth Advisor Solutions ( WAS or the Service ) is a referral service of Strategic Advisers, Inc. ( Strategic and, together with its affiliates, Fidelity Investments ), a registered investment adviser and Fidelity Investments company. The Service is designed for current and prospective clients of Fidelity Investments and other investors who seek to receive referrals to third party independent investment advisory firms (each an Advisor ). As part of these referrals, Strategic is required to provide you with certain information regarding WAS and your Advisor is required to obtain your acknowledgement of your receipt of this information. By signing this Agreement, you hereby acknowledge and agree that: 1. Neither Strategic nor any other Fidelity Investments company is affiliated in any way with the Advisors that participate in the Service, and no Advisor has authority to act for or obligate Strategic or its affiliates or to make any representations on their behalf. Advisors are customers of affiliates of Strategic, including Fidelity Brokerage Services LLC ( FBS ) and National Financial Services LLC ( NFS ), and such affiliates receive compensation from Advisors customers for the clearing, custody and other brokerage services associated with any accounts held with such affiliates. 2. Each Advisor s inclusion in the Service is based on (1) their existing business relationship with affiliates of Strategic, including FBS and NFS, and (2) the Advisor s agreement to comply with the participation criteria for the Service (as disclosed in Strategic s Form ADV Part 2A Brochure for the Service). The presentation of the Advisors for your consideration is based on a comparison of personal information that you have provided and the profile information that each of the Advisors have provided to Strategic. The names of the Advisors come from a pre-determined list compiled by Strategic from a pool of investment advisors that meet certain objective eligibility criteria and who conduct brokerage activities on behalf of their customers through Strategic s affiliates, FBS and NFS. In no event shall Strategic's providing the names of the Advisors constitute an endorsement, recommendation or opinion as to the quality of an Advisor's investment products or services or investment performance, or the appropriateness of any particular advisory service for your particular circumstances. 3. Based on the information provided by you and the participating Advisors in the Service, Strategic will generate a list of all Advisors that align with your screening criteria, and will inform you of the total number of Advisors in the Service that align with such criteria. Strategic will then provide you with an initial list of at least 2, but not more than 5 Advisors for your consideration. Through the use of an automated screening tool, Strategic will present a list of Advisors who have informed us that they provide the type of investment services that you have requested. You will be provided the opportunity to sort Advisors who passed the Service's participation criteria based on a preference for certain investment disciplines or services. The screening process will present a list of Advisors based on the Advisor's disclosed percentage of assets under management in that discipline or the percentage of current clients for which the Advisor provides a certain service. This ranking is based solely on the percentages disclosed by the Advisor, and Strategic makes no representation that any Advisor that passes the screening criteria offers additional expertise or experience in a given investment discipline or service. You may choose to use up to 3 different investment disciplines to sort Advisors; in such 1

2 cases, the tool will equally weight each of the investment criteria to arrive at a list of Advisors for your consideration. While this Agreement remains in effect, you may (i) request the names of the additional Advisors that align with your screening criteria and these names will be provided to you in groups of 5 based on the ranking criteria described above, as appropriate, or (ii) alter your search criteria and request a new search consistent with the process described in this paragraph. This Agreement shall remain in effect for a period of 90 days from the date of this agreement; provided, however, that Strategic shall be under no obligation to affirmatively update the list of Advisors provided to you, or update the information pertaining to any Advisor during the 90 day period, unless you specifically request. 4. There may be other investment advisers that do not participate in WAS that are equally or more appropriate for your specific circumstances. You are under no obligation to contact or to hire any Advisor you learn about through the Service, or to give an Advisor trading discretion over your accounts. However, if you request, Strategic will provide your name and contact information to the referred Advisors for the purpose of setting up an initial meeting with you. As a result, the services provided to you by Strategic through WAS may include, upon receipt of this signed Agreement, the sharing of your personal information with referred Advisors that participate in the Service, and you consent to any such sharing of information. 5. You must conduct your own interviews and evaluation of any Advisor that you may consider hiring to satisfy yourself that the Advisor, and any advisory services they might provide, are right for you. The decision as to which Advisor, if any, to hire is your own. 6. You will not seek to hold Strategic or its affiliates responsible for your decision to hire any Advisor or for any actions an Advisor may take on your behalf with respect to your account(s), regardless of whether such accounts are brokerage accounts maintained with FBS and/or custodied at NFS, or are otherwise held at Fidelity Investments. 7. Strategic has relied on information and representations of each Advisor in determining the Advisors' eligibility to participate in WAS and their ability to match your screening criteria, and Strategic cannot guarantee the accuracy, completeness or timeliness of information provided by Advisors to Strategic or to you. 8. The services provided to you by Strategic through WAS do not constitute investment advice with respect to a particular investment product, strategy or service including, but not limited to, circumstances where you may request that a Strategic representative attend an introductory meeting with you and a prospective Advisor. If you decide to hire an Advisor, Strategic and its affiliates will not undertake to evaluate whether any investment advice provided to you by the Advisor is appropriate for you. Once you have hired an Advisor to manage your assets and/or to provide you with financial planning services, it is your responsibility to monitor your selected Advisor, including the Advisor s management of your assets, Advisor s deduction of advisory fees from your account(s), and the Advisor s performance. Strategic has no discretionary authority or control with respect to the assets under management at any Advisor, and Strategic has no ongoing duty to you with respect to such assets. Strategic will play no role in monitoring or evaluating any advisory services that you may receive from any Advisor, and Strategic has no duty to update you regarding the status of any Advisor in the program once you receive your referral. 9. If you decide to give an Advisor trading discretion over your account(s) at Fidelity Investments, affiliates of Strategic, including FBS and NFS, may act on the instructions they receive from 2

3 Advisor and will not review the trading to evaluate whether the trading is consistent with the Advisor's investment strategy or is otherwise appropriate or suitable for you. You must monitor your account carefully and direct any questions about your investment strategy, portfolio performance or account activity to the relevant Advisor. 10. Based on your stated preferences and needs, Strategic may refer you to Advisors that offer either wealth planning, financial planning or investment management services. While Strategic has evaluated the Advisors based upon the participation criteria for the Service as noted above, Strategic has not made an independent evaluation of any particular product or service, including financial planning or wealth planning services, that is offered by the Advisors. Strategic will not seek to ascertain whether your stated preferences for any investment strategy or product are appropriate for your needs. 11. You will not be charged any fees by Strategic for any referrals made pursuant to this Agreement, or the materials or assistance provided by Strategic as part of the Service. However, Advisors compensate Strategic for referrals according to the fee structure outlined in Section 12 below and in the solicitation disclosure documents applicable to each Advisor. You will receive both a solicitation disclosure document for each Advisor as part of your referral, and a copy of each Advisor s Form ADV 2A Brochure, and you acknowledge receipt of these documents by executing this agreement. Pursuant to agreements with Strategic, each Advisor has agreed that it will not charge advisory fees in excess of its normal range of advisory fees as a result of the fees it must pay to Strategic as part of this referral. 12. Each Advisor and Strategic have entered into an agreement pursuant to which the Advisor compensates Strategic for referring you to the Advisor if you enter into an investment advisory contract with that Advisor. Specifically, the Advisor will pay Strategic solicitation fees based on the amount of assets you place under management with the Advisor. For a period of seven years from the date you fund an account over which your Advisor has management responsibility, your Advisor has agreed to pay Strategic an annual fee of not more than 0.25% of the assets (or such lesser amounts as disclosed in the solicitation disclosure documents you receive with respect to such Advisor) from you or your household member that are advised by your Advisor and are held in brokerage accounts maintained with FBS and custodied at NFS. Advisors have agreed to pay Strategic a minimum of either (1) $10,000 per calendar year for participation in the Service ("Minimum Participation Fee") or (2) the aggregate of all account-based solicitation fees that would be payable to Strategic during the calendar year, whichever is greater. Strategic is entitled to its referral fees whether or not you pay your management or advisory fees to your Advisor in accordance with your agreement with such Advisor. 13. If the referral agreement entered into between your Advisor and Strategic is terminated, the Minimum Participation Fee described above will no longer apply. However, your Advisor will continue to pay to Strategic all other referral fees described above, calculated based on your assets and your family members' assets that continue to receive advisory services from such Advisor, for the period indicated. 14. In limited circumstances, Strategic may waive or reduce fees paid by the Advisor. Strategic may waive or reduce these fees at its discretion based on, among other things, the size of accounts managed by Advisor and other business considerations between Fidelity Investments and the Advisor. Consequently, in order to obtain fee waivers or reductions from Strategic, an Advisor may have an incentive to recommend that your household assets 3

4 under management by the Advisor be held in accounts at Fidelity Investments. 15. You have received, carefully read and evaluated the following documents: (i) this Agreement, and (ii) Strategic s Form ADV 2A Brochure for the Service. You understand the terms of the preceding documents and have been given the opportunity to ask questions and receive answers regarding the information contained within each document. You agree to be subject to the terms of the preceding documents. You also acknowledge that you will receive at the time of referral (i) a solicitation disclosure document for each Advisor, and (ii) a Form ADV 2A Brochure for each Advisor. You agree that your referral is not complete until you have received these documents, and you acknowledge that you will review these documents carefully before making a decision to contact any Advisor about their advisory services. 16. Any Advisor to whom you are referred by the Service is either (i) a registered investment adviser under the Investment Advisers Act of 1940, as amended, or (ii) is a financial institution not required to register with the U.S. Securities and Exchange Commission, operating pursuant to an exemption from federal registration. 17. You acknowledge that Representatives of Strategic may have a financial incentive for you to receive a referral and hire an Advisor instead of choosing other investment options for your assets. 18. Your Advisor may have an incentive to encourage you to hold your assets under management in accounts at Fidelity Investments rather than at another financial institution, which is likely to result in FBS and/or NFS receiving compensation, including brokerage commissions, for clearing, custody or other brokerage services provided for such account(s). Fees received by FBS or NFS for services performed for your accounts are separate from the fees paid by your Advisor to Strategic for participation in WAS. 19. You understand the Solicitation Fees paid by your Advisor are paid directly to Strategic by the Advisor and that those fees are (i) separate from any advisory fees you may pay to any Advisor, (ii) separate from any fees you may pay to Strategic for investment management or other services, (iii) separate from any clearing, custody and other fees for brokerage services you may pay to FBS with respect to your accounts maintained with FBS and custodied at NFS, and (iv) separate from any other fees for products or services you may pay to any other Fidelity Investments company. Agreed and Acknowledged, X Signature Date Print Name X Signature Date Print Name

5 Fidelity Wealth Advisor Solutions Strategic Advisers, Inc. 245 Summer Street, V5D Boston, MA March 30, 2016 This brochure was developed for those who are considering a referral from the Fidelity Wealth Advisor Solutions program. It provides information about the qualifications and business practices of Strategic Advisers, Inc. ( Strategic Advisers ), a registered investment adviser and a Fidelity Investments company, as well as information about Fidelity Wealth Advisor Solutions. Please read this brochure carefully. Throughout this brochure and related materials, Strategic Advisers may refer to itself as a registered investment adviser or being registered. These statements do not in any way imply a certain level of skill or training. If you have any questions about the contents of this brochure, please contact us at The information in this brochure has not been approved or verified by the U.S. Securities and Exchange Commission ( SEC ) or by any state securities authority. Additional information about Strategic Advisers is available on the SEC s website at

6 SUMMARY OF MATERIAL CHANGES The SEC requires investment advisers to provide and deliver an annual summary of material changes to their advisory services program brochure (also referred to as the Form ADV Part 2A). No material changes were made to the Wealth Advisor Solutions Program Brochure from March 30, 2015, through March 30, Please contact a Fidelity representative with any questions at

7 TABLE OF CONTENTS SUMMARY OF MATERIAL CHANGES 2 ADVISORY BUSINESS 4 FEES AND COMPENSATION 7 PERFORMANCE-BASED FEES AND SIDE-BY-SIDE MANAGEMENT 8 TYPES OF CLIENTS 8 METHODS OF ANALYSIS, INVESTMENT STRATEGIES, AND RISK OF LOSS 9 Disciplinary Information 9 OTHER FINANCIAL INDUSTRY ACTIVITIES AND AFFILIATIONS 9 CODE OF ETHICS, PARTICIPATION OR INTEREST IN CLIENT TRANSACTIONSAND PERSONAL TRADING 14 BROKERAGE PRACTICES 15 REVIEW OF ACCOUNTS 15 CLIENT REFERRALS AND OTHER COMPENSATION 15 CUSTODY 15 INVESTMENT DISCRETION 15 VOTING CLIENT SECURITIES 15 3

8 ADVISORY BUSINESS Strategic Advisers, Inc. ( Strategic, Strategic Advisers, or sometimes referred to as we or us throughout this document), is a registered investment adviser and a wholly owned subsidiary of FMR LLC (collectively with Strategic and its affiliates, Fidelity Investments or Fidelity ). Strategic was incorporated in 1977 and provides the referral services for the Fidelity Wealth Advisor Solutions program ( WAS or the Service ). Strategic s total assets under management as of December 31, 2015, were $226,554,400,000 on a discretionary basis and $9,835,300,000 on a nondiscretionary basis. WAS is a referral service designed for existing and prospective clients of Fidelity Investments who seek to receive referrals to third-party independent investment advisory firms that have agreed to participate in the Service ( Advisors ). Each Advisor s inclusion in the Service is based on (i) the Advisor s existing business relationship with affiliates of Strategic and (ii) the Advisor s agreement to comply with the participation criteria for the Service (as disclosed below). Advisors will be presented for your consideration based on a comparison of information that you provide about your needs, such as your investment preferences, relationship and location preferences, and the type of investment or financial planning products you are interested in. Your information is then compared through an objective, automated screening tool against the information that has been provided by the participating Advisors to arrive at a list of Advisors to which you will be referred. Strategic is not affiliated in any way with the Advisors that participate in the Service. Advisors have no authority to act for or obligate Strategic or its affiliates or to make any representations on Strategic s or any affiliate s behalf with respect to referrals made through the Service. While referred Advisors are not affiliated with or agents of Strategic or any other Fidelity Investments company, the Advisors that participate in the Service pay solicitation fees to Strategic for referrals (as explained in more detail in the section below titled Other Financial Industry Activities and Affiliations ) and also are customers of certain affiliates of Strategic, including Fidelity Brokerage Services LLC ( FBS ) and National Financial Services LLC ( NFS ), and such affiliates receive compensation from the Advisors customers for the clearing, custody, and other brokerage services associated with any accounts held with those affiliates. Based on the information provided by you and the participating Advisors in the Service, Strategic will generate a list of all Advisors that align with your screening criteria and will inform you of the total number of Advisors in the Service that align with your criteria. Strategic will then provide you with an initial list of at least two, but not more than five Advisors for your consideration. Through the use of an automated screening tool, Strategic will present a list of Advisors who have informed 4

9 us that they provide the type of investment services that you have requested. Clients will be provided the opportunity to sort Advisors who passed the Service s participation criteria based on a preference for certain investment disciplines or services. To the extent you want to sort the list of eligible Advisors by investment disciplines or services (e.g., Advisors who manage fixed income investments), the screening process will present a list of Advisors based on the Advisor s disclosed percentage of assets under management in that discipline or the percentage of current clients for which the Advisor provides a certain service (e.g., estate planning). This ranking is based solely on the percentages disclosed by the Advisor, and Strategic does not verify these percentages and makes no representation that any Advisor that passes the screening criteria offers additional expertise or experience in a given investment discipline or service. You may choose to use up to three different investment disciplines to sort Advisors; in such cases, our advisor screening tool will equally weight each of the investment criteria selected to arrive at a list of Advisors for your consideration. You may request the names of the additional Advisors, if any, that align with your screening criteria and, if your request is received within 90 days of the date of our Service agreement with you, the names of these additional Advisors will be provided to you in groups of five, as appropriate. You may also modify your selection criteria and request a new search within the 90-day period. Along with the names of Advisors, Strategic will also provide (i) a firm profile of each Advisor, which includes a summary of relevant information provided by the Advisor, (ii) a solicitation disclosure document for each Advisor, which includes legally required information about the Advisor and the Advisor s relationship with Strategic, and (iii) a copy of each Advisor s Form ADV Part 2A for their advisory services (their Brochure ). You should review all these documents carefully before making any decisions to contact any Advisor. If you choose to hire an Advisor, you will be required to execute an Investor Acknowledgement form confirming that you have received and reviewed these documents. Depending on your stated preferences, Strategic may refer you to Advisors that offer wealth planning, financial planning, and/or investment management services. While Strategic has evaluated the referred Advisors based on the participation criteria for the Service, noted below, Strategic has not made an independent evaluation of any particular product or service, including financial planning or wealth planning services, that is offered by any Advisor, and Strategic will not refer you to any particular product or strategy offered by any Advisor. Our Service agreement and relationship with you ends 90 days from the date of our agreement, provided, however, that Strategic shall be under no obligation during this 90-day period to affirmatively update the list of Advisors provided to you unless you specifically request. The Advisors that participate in the Service are limited to those that have business relationships with the affiliates of Strategic, namely FBS and NFS. There may be other investment advisers that are equally or more appropriate for your specific circumstances. You are under no obligation to contact or to hire any Advisor you learn about through the Service, or to give an Advisor trading discretion over your accounts. However, if you request, Strategic will provide your name, contact information, and the information used to develop your referral to any Advisor that aligned with your screening criteria for the purpose of the Advisor setting up an initial meeting with you. The services provided to you by Strategic through WAS may include, with your written consent, the sharing of your personal information with referred Advisors that participate in the Service. Please refer to the privacy notice that you have received for further information. 5

10 You must conduct your own interviews and other evaluation of any Advisor you may consider hiring to satisfy yourself that the Advisor, and any advisory services they might provide, are right for you. The decision as to which Advisor, if any, to hire is your own. Once you have hired an Advisor, it is your responsibility to monitor your selected Advisor, including the Advisor s management of your assets and the Advisor s performance. Strategic has no authority or control with respect to the assets under management at any Advisor, and Strategic has no ongoing duty to you with respect to the management of such assets. Strategic will play no role in monitoring or evaluating any advisory services that you may receive from any Advisor, and Strategic has no duty to update you regarding the status of any referred Advisor once you receive your referral. Strategic has relied on information and representations of each Advisor in determining (i) the Advisor s eligibility to participate in WAS and (ii) the information used to align the Advisor with your stated preferences, including the firm s profile information. Strategic cannot guarantee the accuracy, completeness, or timeliness of information provided by Advisors to Strategic or to you. The Service is designed only to provide you with a list for your consideration of Advisors that may meet your investment and financial planning needs; the services provided to you by Strategic through WAS do not otherwise constitute investment advice or a recommendation with respect to any listed Advisor, including, but not limited to, circumstances where you may request that a Fidelity representative attend a meeting with you and a prospective Advisor. We are not acting as an investment manager or otherwise as a fiduciary within the meaning of the Employee Retirement Income Security Act of 1974, as amended, or the Internal Revenue Code (and underlying regulations) with respect to your account as a result of the Service. Under the Service, Strategic does not provide investment advice or recommendations to buy or sell securities or other property on a regular basis. There is no arrangement or understanding that this Service shall serve as the primary basis for any investment decisions you make with respect to your account(s) or assets, and you should not consider it as such. If you decide to hire an Advisor, Strategic and its affiliates will not evaluate whether any investment advice provided to you by the Advisor is appropriate for you. If you decide to give an Advisor trading discretion over your account(s) at Fidelity Investments, affiliates of Strategic will act on the instructions each receives from the Advisor and will not review the trading to evaluate whether the trading is consistent with the Advisor s investment strategy or is otherwise appropriate or suitable for you. You must monitor your account carefully and direct any questions about your investment strategy, portfolio performance, or account activity to the relevant Advisor. As a result of an Advisor s participation in the Service, it is likely that the Advisor will use affiliates of Strategic to effect securities transactions for your accounts held at Fidelity Investments, which will generate brokerage commissions and other revenues for affiliates of Strategic, including FBS and NFS. In general, you may direct the Advisor to use any brokerage firm you choose to support your trading activity. You understand that the solicitation fees paid by your Advisor are paid directly to Strategic by the Advisor and that those fees are (i) separate from any advisory fees you may pay to any Advisor, (ii) separate from any fees you may pay to Strategic for investment management or other services, (iii) separate from any clearing, custody, and other fees for brokerage services you may pay to FBS with respect to your accounts maintained with FBS and 6

11 custodied at NFS, and (iv) separate from any other fees for products or services you may pay to any other Fidelity Investments company. Participation Criteria. Strategic uses the following objective factors, among other factors, to determine which Advisors are eligible to participate in the Service: 1. Federal Registration. A participating Advisor must be an investment adviser registered and in good standing with the SEC and/or any applicable state securities regulatory authorities or an entity that is exempt from registration as an investment adviser pursuant to Section 202(a)(11)(A) under the Investment Advisers Act of 1940, as amended (the Advisers Act ). 2. Fee-Based Compensation. Participating Advisors must charge fee-based, asset-based, or flatrate investment advisory service fees (which may include hourly fees). 3. Assets Under Management. A participating Advisor must maintain a minimum of $200 million in assets under management, as reported on the Advisor s Form ADV 2A, throughout the duration of the Advisor s participation in the Service. 4. Errors and Omissions Liability. Participating Advisors and all associated persons of the Advisor who manage client assets or who supervise such associated persons must at all times be covered through both Errors and Omissions Liability Insurance and Fidelity Bond Coverage, with a minimum of $2 million Errors and Omissions Liability Insurance and $1 million Fidelity Bond Coverage. 5. Scope of Offering. Participating Advisors must offer one or more of the following advisory services: financial planning, investment management, performance reporting, trust and estate planning, retirement income planning, tax planning, small business services, corporate executive services and wealth management services. Please note that Strategic relies on the Advisors to designate the services they provide, and Strategic does not independently evaluate the performance or sufficiency of any investment product or service offered by an Advisor. 6. Principals and Employees. Participating Advisors must maintain a minimum of two principals or officers as well as a minimum of five employees. Strategic may, in its sole discretion, waive these criteria in whole or in part with respect to any Advisor at any time. FEES AND COMPENSATION Strategic does not charge you any fees for the Service. However, as noted in the section entitled Other Financial Industry Activities and Affiliations, Advisors pay solicitation fees to Strategic to receive referrals through the Service, and affiliates of Strategic receive additional compensation from trading activity in brokerage accounts maintained with FBS and custodied at NFS that are managed by referred Advisors. Upon deciding to hire an Advisor referred by the Service, you will pay fees to that Advisor based on the services they provide. Those fees will vary from Advisor to Advisor, and will be disclosed in the Advisor s Brochure, as well as the advisory agreement that you sign with the Advisor. Pursuant to the agreements with Strategic, each Advisor has agreed that it will not charge advisory fees in excess of its normal range of advisory fees as a result of the fees it must pay to Strategic as part of this referral. Because your Advisor receives referrals from Strategic, your Advisor may have an incentive to encourage you to hold your assets under management in custody at Fidelity Investments rather than at another financial institution, which is likely to result in FBS and NFS receiving compensation 7

12 for securities transactions effected for your account. Fees received by FBS or NFS for effecting securities transactions are separate and distinct from the fees paid by your Advisor to Strategic for participation in WAS. Fidelity representatives who make referrals may receive compensation as a result of making such referrals. In particular, certain representatives who make referrals may receive 0.07% of referred assets upon the completion of a successful referral where a client transfers assets to a referred Advisor, along with additional compensation based on the amount of assets clients consolidate with Fidelity, including assets referred to Advisors in the Service. In many cases, this compensation is greater than what the representative would receive if you participated in other programs or purchased other investment products. In addition, Fidelity representatives who make referrals under the Service may participate in sales contests and may earn additional rewards based on sales criteria, including the number and asset value of referrals made in a given period. Therefore, Fidelity representatives who make referrals as part of the Service may have a financial incentive to present referrals and for you to hire an Advisor, and because of those incentives they may suggest that you consider hiring an Advisor instead of choosing other investment options for your assets. However, each representative s incentive payment is subject to manager evaluation and modification to ensure adherence to Fidelity s policies and procedures with respect to referring clients to appropriate products and services. For additional information about how Fidelity Investments compensates its representatives in connection with this Service and other products, please see the representative s compensation disclosure document that is available at Fidelity.com or ask your representative for additional information. PERFORMANCE-BASED FEES AND SIDE-BY-SIDE MANAGEMENT As noted above, Strategic does not charge advisory fees, including performance-based advisory fees, under the Service. Strategic provides only referrals to unaffiliated investment advisers under the Service, and is not responsible for discretionary management of any client accounts through the Service. TYPES OF CLIENTS Referrals from Fidelity Wealth Advisor Solutions are generally available to current and prospective clients of Strategic and its affiliates, including FBS. The Service is not available to foreign investors and non-u.s. trusts. To participate in the Service, a client must (i) be a U.S. person (including a U.S. resident alien), (ii) reside in the U.S. and have a valid U.S. permanent mailing address, and (iii) have a valid U.S. taxpayer identification number. In order to assess whether a referral is appropriate, Strategic may gather certain information about you, including, but not limited to, information about your investing preferences, the amount you are willing to invest, and the types of strategies and services you want to receive. The Service is generally appropriate for clients looking for discretionary asset management, wealth management, or financial planning services for amounts over $250,000, but referrals may be made for smaller accounts to a subset of Advisors depending on the circumstances. Each Advisor in the Service may have its own account minimum and client restrictions; please see the Form ADV 2A Brochure for that Advisor for additional information. 8

13 METHODS OF ANALYSIS, INVESTMENT STRATEGIES, AND RISK OF LOSS Strategic does not recommend transactions or investment strategies as part of the Service, nor does it offer any form of discretionary investment management or financial planning through the Service. Strategic will not seek to ascertain whether your stated preferences for any investment strategy or product are appropriate for your needs. Strategic seeks to refer clients to Advisors based on an alignment between the client s personal information and investment preferences and the profile information supplied by the Advisors. In no event shall Strategic s providing the names of the Advisors constitute an endorsement, recommendation, or opinion as to the quality of an Advisor s investment products, services, or investment performance. All investment strategies employed by the Advisors that participate in the Service are subject to certain risks, including the risk of loss; for additional information about the risks associated with an Advisor s investment strategies, please see the Brochure for that Advisor. Disciplinary Information Strategic and its management persons have no disclosable legal or disciplinary events that are material to a client s evaluation of these advisory services. Other Financial Industry Activities and Affiliations Strategic is a wholly owned subsidiary of FMR LLC. FMR LLC is a Delaware limited liability company that, together with its affiliates and subsidiaries, is generally known to the public as Fidelity Investments or Fidelity. Various direct or indirect subsidiaries of FMR LLC are engaged in investment advisory, brokerage, banking, or insurance businesses. From time to time, Strategic and our clients may have material business relationships with any of the subsidiaries and affiliates of FMR LLC. In addition, the principal officers of Strategic may serve as officers and/or employees of affiliated companies that are engaged in various aspects of the financial services industry. Strategic Advisers is not registered as a broker-dealer, nor does it have an application pending to register as a broker-dealer. Certain management persons of Strategic Advisers are registered representatives of Pyramis Distributors Corporation LLC, a Strategic Advisers affiliate and registered broker-dealer; however, Pyramis Distributors Corporation LLC has no relationship with the Service and does not generate any sales or revenue associated with the Service. Though Strategic Advisers may advise the mutual funds and other institutional accounts it manages regarding futures contracts, options, and swaps, Strategic Advisers currently operates pursuant to an exemption from registration with the Commodity Futures Trading Commission as a commodity trading advisor and/or a commodity pool operator. We are generally engaged in three areas of business: Providing discretionary investment advisory services to individuals, trusts, retirement plans, investment companies, and charitable and other business organizations. Providing nondiscretionary advisory products and services to individuals and financial intermediaries, and developing and maintaining asset allocation and portfolio modeling methodologies for use by our affiliates. Offering educational materials concerning investment and personal finance. 9

14 Our affiliates provide investment advisory and other services to the Fidelity mutual funds and Fidelity exchange-traded funds (collectively, the Fidelity Funds ). When your assets are invested in Fidelity Funds, those affiliates may receive investment management and other fees from the Fidelity Funds based on the amount of your invested assets. Fidelity Management & Research Company ( FMRCo ) and various affiliates of FMRCo are compensated for providing services to the Fidelity Funds, such as: FMRCo as the investment adviser for the Fidelity Funds; and Fidelity Distributors Corporation ( FDC ) as the underwriter of the Fidelity Funds. One or more broker-dealer affiliates of the Fidelity Funds may execute portfolio transactions for the Funds. The Funds investment advisers may obtain brokerage or research services, consistent with Section 28(e) of the Securities Exchange Act of 1934 (the Exchange Act ), from broker-dealers in connection with the execution of the Funds portfolio security transactions. From time to time, we or our clients may have a material business relationship with the following affiliated companies: Investment Management Fidelity Investments Money Management, Inc. ( FIMM ), is a wholly owned subsidiary of FMR LLC and a registered investment adviser under the Advisers Act. FIMM provides portfolio management services as a subadviser to certain of Strategic Advisers clients, including investment companies in the Fidelity group of funds, or as an adviser. In addition, we may share employees from time to time with FIMM. Fidelity Management & Research Company ( FMRCo ), a wholly owned subsidiary of FMR LLC, in association with its various affiliates and subsidiaries, serves as investment adviser to registered investment companies, and is registered as an investment adviser under the Advisers Act. Strategic Advisers pays FMRCo an administrative fee for handling the business affairs of the investment companies Strategic Advisers advises. In addition, we may share employees from time to time with FMRCo. FMR Co., Inc. ( FMRC ), is a wholly owned subsidiary of FMRCo and a registered investment adviser under the Advisers Act. FMRC may provide portfolio management services as a subadviser to certain of Strategic s clients. FMRC may also provide portfolio management services as an adviser or a subadviser to clients of other affiliated and unaffiliated advisers. In addition, we may share employees from time to time with FMRC. FIAM LLC ( FIAM ) is a wholly owned subsidiary of FIAM Holdings Corp., which in turn is wholly owned by FMR LLC, and provides investment management services, including subadvisory services to Strategic Advisers or its affiliates. FIAM is a registered investment adviser under the Advisers Act. FIAM is also registered with the Ontario Securities Commission and the Central Bank of Ireland. In addition, we may share employees from time to time with FIAM. Broker Dealers Pyramis Distributors Corporation LLC ( PDC ), a wholly owned subsidiary of FIAM Holdings Corp., acts as a placement agent for privately offered investment funds advised by FIAM; Fidelity Institutional Asset Management Trust Company; and their affiliates in the United States. PDC is a registered broker-dealer under the Exchange Act. Certain employees of Strategic Advisers may act as registered representatives of PDC. 10

15 Fidelity Distributors Corporation ( FDC ), a wholly owned subsidiary of FMR LLC, acts as principal underwriter and general distribution agent of the registered investment companies advised by FMRCo. FDC is a registered broker-dealer under the Exchange Act. National Financial Services LLC ( NFS ) is engaged in the institutional brokerage business and provides clearing and execution services for other brokers. NFS is a wholly owned subsidiary of Fidelity Global Brokerage Group, Inc., a holding company that provides administrative services to NFS. Fidelity Capital Markets ( FCM ), a division of NFS, may execute transactions for our investment companies and other clients. Additionally, FCM operates CrossStream, an alternative trading system that allows orders submitted by its subscribers to be crossed against orders submitted by other subscribers. FCM charges a commission to both sides of each trade executed in CrossStream. CrossStream may be used to execute transactions for Strategic Advisers or Strategic Advisers affiliates investment company and other advisory clients. NFS is a registered broker-dealer under the Exchange Act, and NFS is also registered as an investment adviser under the Advisers Act. NFS may serve as a clearing agent for client transactions that we place with certain broker-dealers. NFS may provide transfer agent or sub transfer agent services to certain of our or our affiliates clients. NFS provides transaction processing services in conjunction with the implementation of our discretionary investment management instructions. NFS also provides custodial, recordkeeping, and reporting services to our clients. We compensate NFS for these services. As discussed below in Referral Fees Payable Under the Service, NFS may act in a broker or custodian capacity with respect to assets that are referred to Advisors through the Service. Luminex Trading & Analytics LLC ( LTA ), a registered broker-dealer and alternative trading system, was formed for the purpose of establishing and operating an electronic execution utility, the LTA ATS, which allows orders submitted by its subscribers to be crossed against orders submitted by other subscribers. FMR LLC is the majority owner of LTA. LTA charges a commission to both sides of each trade executed in the LTA ATS. The LTA ATS may be used to execute transactions for Strategic or Strategic s affiliates investment company and other advisory clients. NFS serves as the clearing agent for transactions executed in the LTA ATS. Fidelity Brokerage Services LLC ( FBS ), a wholly owned subsidiary of Fidelity Global Brokerage Group, Inc., is a registered broker-dealer under the Exchange Act and provides brokerage products and services, including the sale of shares of investment companies advised by FMRCo to individuals and institutions, including retirement plans administered by affiliates. Your Fidelity representative is a registered representative of FBS. Pursuant to referral agreements and for compensation, representatives of FBS may refer customers to services offered by FBS s related persons, including Strategic. As discussed below in Referral Fees Payable Under the Service, FBS may act in a broker or custodian capacity with respect to assets that are referred to Advisors through the Service. In addition, FBS is the distributor of insurance products, including variable annuities, which are issued by Strategic s related persons, Fidelity Investments Life Insurance Company ( FILI ) and Empire Fidelity Investments Life Insurance Company ( EFILI ). FBS may provide shareholder services to certain of Strategic s or Strategic s affiliates clients. Fidelity Global Brokerage Group, Inc., wholly owns two broker-dealers, FBS and NFS, and also has an equity interest in ebx LLC ( ebx ), a holding company and a registered broker-dealer under the Exchange Act, which was formed for the purpose of developing, owning, and operating an alternative trading system, the Level ATS. Strategic disclaims that it is a related person of ebx. 11

16 Banking Institutions Fidelity Management Trust Company ( FMTC ), a trust company organized and operating under the laws of the Commonwealth of Massachusetts, provides nondiscretionary trustee and custodial services to employee benefit plans and IRAs through which individuals may invest in mutual funds managed by FMR or its affiliates, and discretionary investment management services to institutional clients. FMTC is a wholly owned subsidiary of FMR LLC. FMRCo or its affiliates provide certain administrative services to FMTC, including, but not limited to, securities execution, investment compliance, and proxy voting. Fidelity Personal Trust Company, FSB ( FPTC ), is a federal savings bank limited to trust powers. FPTC is an indirect, wholly owned subsidiary of FMR LLC. FPTC provides trustee or co-trustee, custody, and investment management services to various client trust accounts. Limited Partnerships and Limited Liability Company Investments Strategic Advisers may provide discretionary investment management to partnerships and limited liability companies designed to facilitate acquisitions by mutual funds offered by Strategic Advisers. These funds are privately offered consistent with stated investment objectives. Strategic Advisers does not intend to engage in borrowing, lending, purchasing securities on margin, short selling, or trading in commodities. Participating Affiliates Fidelity Business Services India Private Limited ( FBS India ), with its registered office in Bangalore, is incorporated under the laws of India and is ultimately owned by FMR LLC through certain of its direct or indirect subsidiaries. Certain employees of FBS India ( FBS India Associated Employees ) may from time to time provide certain research services for us, which we may use for our clients. FBS India is not registered as an investment adviser under the Advisers Act and is deemed to be a Participating Affiliate of Strategic Advisers (as this term has been used by the SEC s Division of Investment Management in various no-action letters granting relief from the Advisers Act s registration requirement for certain affiliates of registered investment advisers). FC is a Participating Affiliate of FIAM. Strategic Advisers deems FBS India and each of the FBS India Associated Employees as associated persons of Strategic Advisers within the meaning of Section 202(a)(17) of the Advisers Act. FBS India Associated Employees and FBS India, through such employees, may contribute to Strategic Advisers research process and may have access to information concerning securities that are being selected for the client prior to the effective implementation of such selections. FIAM and Strategic Advisers each maintain a list of FBS India Associated Employees whom it has deemed associated persons, which Strategic Advisers will make available to current U.S. clients upon request. Referral Fees Payable Under the Service As part of the Service, each participating Advisor has agreed to pay to Strategic solicitation fees for participation in the Service on any and all brokerage accounts opened or maintained with FBS and custodied at NFS that are managed or advised pursuant to an investment advisory agreement between that Advisor and a client or that client s household members (collectively, Client Accounts ). For the purposes of those agreements, Household Member means a client s spouse, children, or any other family member sharing the same residence address as the client and, under certain circumstances, certain trust or partnership accounts where the client serves as trustee, grantor, or partner with respect to such accounts. 12

17 Depending on their business model, Advisors have agreed to pay Strategic based on one of the following two fee schedules: 1. For a period of seven years from the date of funding of a Client Account with a participating Advisor, the Advisor shall pay Strategic an amount equal to an annual percentage of 0.20% of any and all assets in Client Accounts, and, under certain circumstances, certain trust or partnership accounts where the client serves as trustee, grantor, or partner with respect to such accounts, with such amount to be billed and collected in arrears on a quarterly basis based on the average daily balance of assets held in Client Accounts during the relevant quarter; or, 2. For a period of seven years from the date of funding of a Client Account with a participating Advisor, the Advisor shall pay Strategic an amount equal to the sum of (i) an annual percentage of 0.10% of any and all assets in Client Accounts where such assets are identified as Fixed Income Assets (as defined below) and (ii) an annual percentage of 0.25% of all other assets held in Client Accounts, with such amount to be billed and collected in arrears on a quarterly basis based on the composition and average daily balance of assets held in Client Accounts during the relevant quarter. For the purposes of this fee option, Fixed Income Assets is defined as any asset that is coded with a fixed income or cash product on the internal systems of FBS. The minimum annual solicitation fee payable to Strategic by any Advisor for Strategic s services under the Service is $10,000 (the Minimum Solicitation Fee ). To the extent that the amount of fees payable by an Advisor does not amount to the Minimum Solicitation Fee for any calendar year, the Advisor shall be responsible for paying the Minimum Solicitation Fee. In the event that an Advisor or Strategic terminate their agreement prior to the end of a full calendar year, the Minimum Solicitation Fee is prorated based on the number of completed quarters in which the Agreement was in effect for such year. If you terminate your advisory agreement with an Advisor, the Advisor shall have no ongoing obligation to pay Strategic solicitation fees with respect to your Client Accounts. However, your Advisor s obligation to pay solicitation fees for your Client Accounts remains in effect even if Strategic and the Advisor terminate the Advisor s participation in the Service. Strategic reserves the right to suspend referrals to any Advisor or terminate an Advisor s participation in the Service for any reason, including, for example, for failure to pay fees in a timely manner. Under certain circumstances, Strategic may waive or reduce the amount of fees payable by an Advisor. Such circumstances may include, but are not limited to, those instances when an Advisor has agreed to manage a client s assets without charging an advisory fee on such assets. Referrals made by affiliates of Strategic in the period prior to the start of the Service are not subject to these fees. Agreements between Strategic and each Advisor are subject to change. The compensation received by Strategic and its affiliates from Advisors, both from within and outside of the Service, creates a potential conflict of interest both when we select Advisors to participate in the Service and when we refer clients to those Advisors. Strategic addresses these conflicts in several ways, including (i) establishing participation criteria described above and securing Advisors agreement to adhere to those criteria before admission into the Service and on a periodic basis thereafter, (ii) establishing an oversight team within Strategic to review participation in the Service by Advisors, (iii) excluding the revenue received by Strategic and its affiliates from consideration in the screening criteria used by the tool to align Advisors with clients, and (iv) periodically evaluating and overseeing the referral process for compliance with the policies and procedures governing the Service. 13