ADDITIONAL TERMS AND CONDITIONS (rev. 1-1-2022)
1. REPRESENTATIONS AND WARRANTIES.
a. Client represents and warrants to Adviser and agrees with Adviser as follows:
i. Client will provide the Adviser with current information relative to Client's financial condition and objectives. It is understood that the information provided to the Adviser is complete, accurate and current as of the date given. Client agrees to notify the Adviser in writing of any material change in the Client's financial condition and objectives during the term of this Agreement. The Adviser is not required to verify any information obtained from the Client.
ii. Client - whether acting individually, jointly, or as a trustee, agent, representative, fiduciary, or otherwise - has the requisite legal capacity and authority to execute, deliver, and perform its obligations under this Agreement. This Agreement has been duly authorized, executed, and delivered by Client and is the legal, valid, and binding agreement of Client, enforceable against Client in accordance with its terms. Client’s execution of this Agreement and the performance of its obligations hereunder do not conflict with or violate any provisions of the governing documents (if any) of Client or any obligations by which Client is bound, whether arising by contract, operation of law, or otherwise. Client will deliver to Adviser evidence of Client’s authority and compliance with its governing documents on Adviser’s request.
iii. Client is the owner of all cash and Securities in the Account and, except as have been or may be disclosed by Client to Adviser as contemplated by this Agreement, there are no restrictions on the pledge, hypothecation, transfer, sale, or public distribution of such cash or Securities.
iv. Client understands that for purposes of managing each Security in the Account (a) Adviser is relying on Client to provide the cost basis and purchase dates of each Security transferred to the Account; (b) Adviser is relying on Client’s representations about the cost basis and purchase dates of each Security; and (c) that if no cost basis and/or purchase date(s) are provided, Adviser will treat each Security as if each has a zero cost basis and/or each was purchased on the Effective Date of this Agreement, as the case may be. Notwithstanding the foregoing, Client understands that Client is responsible for knowing the cost basis and purchase dates of each Security and for accurately reporting taxable gains and losses with respect to each Security.
v. Client understands the tax implications to Client of the transactions contemplated by this Agreement, has consulted tax advisers regarding such tax implications, and is not relying on Adviser for any advice or information about such tax implications.
vi. Client understands that the Planner Fee, Asset Based Fee, and Retainer Fee may differ from fees charged by other Advisers for like services.
vii. Client understands that Adviser does not vote proxies and will not be required to take any action or render any advice with respect to the voting of proxies solicited by or with respect to the issuers of Securities in which assets of the Account may be invested from time to time. To that end, Client expressly withholds authority to vote proxies with respect to Securities in the Account, and Adviser is expressly precluded from exercising voting rights with respect to such Securities. Accounts subject to ERISA must provide to Adviser a copy of Plan Documents showing that right to vote proxies has been reserved to the trustees or other fiduciaries.
viii. If Client is subject to ERISA, Client has independently determined that the retention of Adviser by Client satisfies all requirements of ERISA section 404(a)(1), specifically including the “prudent man” standards of ERISA section 404(a)(1)(B) and the “diversification” standard of ERISA section 404(a)(1)(C), and will not be prohibited under any of the provisions of ERISA section 406 or section 4975(c)(1) of the Internal Revenue Code of 1986, as amended. The Client has requested and received all information from Adviser that the undersigned, after due inquiry, considered relevant to such determinations. In determining that the requirements of ERISA section 404(a)(1) are satisfied, the Client has taken under consideration that there is a risk of a loss in the Account. Considering these and all other factors relating to retention of Adviser by Client, the Client has concluded that the retention of Adviser by Client constitutes an appropriate part of Client’s overall investment program. Furthermore, Client will notify Adviser, in writing, of (i) any termination, substantial contraction, merger or consolidation of Client, or transfer of its assets to any other employee benefit plan; (ii) any amendment to the organizing documents of Client or any related instrument that materially affects the activities of Adviser contemplated hereunder or the authority of any named fiduciary or Adviser to authorize Client investments or retention of investment advisers; and (iii) any alteration in the identity of any named fiduciary, including itself, who has the authority to approve Client investments. Moreover, in accordance with ERISA sections 405(c)(1), 405(c)(2) and 405(d), the fiduciary responsibilities of Adviser and any officer, member, Adviser employee, or agent of Adviser shall be limited to his, her, or its duties in managing the Account, and Adviser shall not be responsible for any other duties with respect to Client specifically including evaluating the initial or continued appropriateness of Client’s retention of Adviser under ERISA section 404(a)(1).
ix. If a bond is required in connection with an Account, Client agrees to obtain and maintain for the period of this Agreement the bond in the amount specified by ERISA or other applicable law and agrees to include Adviser among those covered by such bond.
x. Client understands that Adviser is prohibited from managing accounts for any person or entity that is acting, directly or indirectly, in violation of any United States Federal anti-money laundering laws, rules, regulations, treaties or other restrictions, or on behalf of any suspected terrorists or terrorist organization, including any person, entity or other organization that is included on any applicable so-called “watch list” maintained by any governmental agency of the United States (including, but not limited to, the U.S. Department of the Treasury, the U.S. Federal Bureau of Investigation, the U.S. Office of Foreign Assets Control, and the U.S. Securities and Exchange Commission); each such person or entity is referred to as a “Prohibited Investor”.
xi. Client understands that Adviser has made no guarantee, either oral or written, that Client's investment objectives will be achieved. Adviser does not guarantee the future performance of the Account, any specific level of performance, or the success of any investment decisions or strategy that Adviser may use or recommend. Client understands that investment decisions or recommendations made for Client’s account by Adviser are subject to various market, currency, economic, political and business risks, and that investment decisions will not always be profitable.
xii. Client understands that the recommendations made by Adviser under this Agreement are advisory in nature, and Client expressly agrees that Adviser shall not be held liable in any matter with financial or investment performance of recommendations, provided those recommendations are provided in good faith and with reasonable care, and is in no way in violation of applicable federal or state laws, regulations, or rulings. Therefore, to the extent permitted under applicable law, Client agrees that Adviser will not be liable to Client for any losses incurred by Client that arise out of or are in any way connected with any recommendation or other act or failure to act of Adviser under this Agreement, including, but not limited to, any error in judgment with respect to the Account, so long as such recommendation or other act or failure to act does not constitute a breach of Adviser's fiduciary duty to Client. Moreover, Client understands that Adviser shall not be responsible for delays or failures in performances resulting from acts beyond its reasonable control. Such acts will include, but not be limited to, acts of God, strikes, lockouts, riots, acts of war, epidemics, governmental regulations, power outages, fire, interruption or malfunction of communication facilities or equipment, earthquakes, other natural disasters, extraordinary trading volume or any other event affecting any stock exchange which disrupts trading on the exchange or delays execution of any transaction involving Client Accounts. Client shall indemnify and defend Adviser and its officers and employees and hold them harmless from and against any and all claims, losses, damages, liabilities and expenses, as they are incurred, by reason of any act or omission of Client or any custodian, broker, agent or other third party selected by Adviser in a commercially reasonable manner or selected by Client, except such as arise from Adviser's breach of fiduciary duty to Client. Anything in this section or otherwise in this Agreement to the contrary notwithstanding, however, nothing herein shall constitute a waiver or limitation of any rights that Client may have under any federal or state securities laws, regulations, or rulings.
xiii. Client understands that Adviser and Planner/IAR are not qualified to render legal advice or prepare legal documents for the implementation of Client's objectives. Client agrees that Client's personal attorney shall be solely responsible for the rendering and/or preparation of all legal matters.
xiv. Client understands those in the event that the named Planner/IAR herein should retire, become disabled, die, or otherwise become unable to serve as Planner/IAR that Adviser shall appoint a successor Planner/IAR to serve without notice or signing a new agreement.
b. If Client is subject to ERISA, Adviser represents and warrants to Client and agrees with Client as follows: (i) Adviser is registered as an investment adviser under the Investment Advisers Act of 1940; and (ii) Adviser understands that Adviser shall be a “fiduciary” of Client, as that term is defined in ERISA section 3(21)(A).
2. CONFLICTS OF INTERESTS.
a. ADDITIONAL MEANS OF COMPENSATION. Adviser is not registered as a broker dealer; however, the Planner/IAR may be a registered representative of a broker dealer. Planner/IAR may also be affiliated with various insurance companies and is licensed according to State laws to provide various insurance related products. Please refer to the Narrative ADV for each Planner/IAR. In any event, Planner/IAR will provide only services and products for which Planner/IAR is licensed by law to provide; or in cases where licensing is not required, provide only those services and products which Planner/IAR is reasonably qualified to render. If Client purchases products from Planner/IAR due to recommendations, then Planner may receive commissions in addition to the Planner Fee, Asset Based Fee, or Retainer Fee for services rendered under this Agreement. Planner/IAR shall disclose such commissions to Client as required by existing state and federal securities laws and regulations.
b. INVESTMENT OPPORTUNITIES ALLOCATED. Client understands and agrees that Adviser performs investment advisory services for various clients; and that Adviser may give advice and take action with respect to any of its other clients which may differ from advice given or the timing or nature of action taken with respect to the Account, so long as it is the Adviser’s policy, to the extent practical, to allocate investment opportunities to the Account over a period of time on a fair and equitable basis relative to other clients. It is understood that Adviser shall not have any obligations to buy, sell, exchange, convert and otherwise trade in any Security, or to recommend for buy, sell, exchange, convert and otherwise trade in any Security, for the Account any security which Adviser, its principals, affiliates or employees may buy, sell, exchange, convert and otherwise trade in any Security for its or their own accounts or for the account of any other client, if in the opinion of Adviser such transaction appears unsuitable, impractical or undesirable for the Account.
c. COMPANY, REPRESENTATIVES, OR EMPLOYEES MAY HOLD SAME SECURITIES. Adviser or its representatives may make securities transactions for its own accounts. Client acknowledges that this may cause a conflict of interest, since both Client and Adviser may be selling or buying the same Security at the same time. To address this potential conflict of interest, Adviser agrees, to the extent within its control, not to favor itself or its representatives to the Client's financial detriment. Adviser agrees to keep complete records of all such Securities transactions, as required by Securities Exchange Commission.
d. FEE CONNECTED WITH ACCOUNT APPRECIATION AND DEPRECIATION. If the Client's account value increases in the future, then Client's future Asset Based Fees paid to Adviser may also increase, because Client's Asset Based Fees will be based in part on the amount of appreciation in Client's Account. Client acknowledges that this may cause a conflict of interest, because it may create an incentive for Adviser to invest in Securities that are riskier or more speculative (and, therefore, have a higher expected rate of return) than would be the case in a non-asset based fee situation. To address this potential conflict of interest, Adviser agrees to use its best efforts to match Client's investments to Client's own risk profile and Client's own personal financial planning objectives, as described in Client's investment policy statement or Client suitability profile.
e. CUSTODIAN BENEFITS. Adviser may receive certain administrative benefits from the Custodian, which enables Adviser to provide the Client with advisory services. Client understands that by instructing Adviser to execute all transactions on behalf of the Account through the Custodian, Client may not necessarily obtain commission rates and execution as favorable as those that would be obtained if Adviser was able to place transactions with other custodians/broker dealers. Client may also forego benefits that Adviser may be able to obtain for its other clients through, for example, the negotiation of volume discounts or block trades.
3. TERMINATION – Unless otherwise mutually agreed to by the parties, the Client has a right to terminate this Agreement for a complete refund of fees within five (5) business days of the Client's signing of this Agreement. Subsequently, and subject to the Early Exit Fee as provided for herein; and Client and Adviser have the right to terminate and cancel this Agreement at any time upon thirty (30) days written notice by either party. The death or incapacity of the Client shall not terminate the authority of the Adviser granted herein until Adviser receives actual notice of such death or incapacity. Upon such notice, your executor, guardian, attorney-in-fact or other authorized representative must engage Adviser for continued account services. In the event of termination, the Client shall be entitled to a prorated refund of any prepaid fees calculated from the effective date of termination. The effective date shall be the date upon which written notice has been received by the Adviser. Work requested to be completed by the Adviser after the effective termination date shall be billed at the Client's Planner/IAR's normal hourly rate (minimum hourly rate is $95.00 per hour) as set forth in Part II of form ADV.
5. ARBITRATION - The Client and Adviser agree that any dispute between or among any of the parties arising out of, relating to, or in connection with this Agreement or the Account, shall be resolved exclusively through binding arbitration conducted under the auspices of the Oklahoma Revised Uniform Arbitration Act 12 Okla. Stat. §1851 et seq. (hereinafter "RUAA"). The arbitration hearing shall be held in the county and state of the principal office of Adviser at the time the dispute arises. Disputes shall not be resolved in any other forum or venue. The arbitration shall be conducted by a retired judge who is experienced in resolving disputes regarding the securities business. The Client and Adviser agree that the arbitrator shall apply the substantive law of Oklahoma to all state law claims, that limited discovery shall be conducted in accordance with RUAA, and that the arbitrator may not award punitive or exemplary damages, unless (but only to the extent that) such damages are required by law to be an available remedy for any of the specific claims asserted. In accordance with RUAA, the arbitrator’s award shall consist of a written statement as to the disposition of each claim and the relief, if any, awarded on each claim. The award shall not include or be accompanied by any findings of fact, conclusions of law or other written explanation of the reasons for the award. The Client and Adviser waive their rights to seek remedies in court, including any right to a jury trial. The Client and Adviser further understand that the right to appeal or to seek modification of any ruling or award by the arbitrator is severely limited under state and federal law. Any award rendered by the arbitrator shall be final and binding, and judgment may be entered on it in any court of competent jurisdiction in the county and state of the principal office of Adviser at the time the award is rendered or as otherwise provided by law.
6. ASSIGNMENT - Adviser may not assign this Agreement without the prior consent of Client, if and to the extent that such consent is required under the Investment Advisers Act of 1940, if applicable, or the laws of the State of Oklahoman, if applicable, and the rules and regulations thereunder. In the event of an assignment by Adviser, Adviser shall request written consent of Client within a specified reasonable time (which shall not be less than thirty days). If Client does not respond to such request within the time specified, Adviser shall inform Client that the proposed assignee will continue the advisory services of Adviser for a specified reasonable time (which shall not be less than thirty days), and if Client does not respond to such second notice from Adviser, Client’s continued acceptance of investment management services from the proposed assignee shall constitute Client’s consent to the assignment. This Agreement shall bind and inure to the benefit of, and be enforceable by the parties and their respective successors and assign.
7. ENTIRE AGREEMENT - This Agreement embodies all the understandings and agreements of the parties hereto, and the terms and conditions may not be amended except in writing by all parties. All terms and provisions of this Agreement shall be governed by the laws of the State of Oklahoma.
8. EXECUTION - This Agreement may be executed in dual counterparts, each of which shall be deemed an original and all of which shall constitute but one agreement.
9. ACKNOWLEDGMENTS - The Client acknowledges receipt of: (i) Part II of the ADV registration form under the Investment Advisers Act of 1940, as amended, (ii) the Adviser's Privacy Notice, the Adviser's Proxy Notice, and (c) the Adviser's Business Continuity Plan (Disaster Recovery Plan). Client further consents to receiving further notices and amendments to the aforementioned acknowledged documents via electronic means.
10. NOTICE. Instructions with respect to Securities transactions may be given orally, unless Adviser requests such instruction to be given or followed up in writing. All other communications under this Agreement must be in writing and will be deemed duly given and received when delivered personally, when sent by facsimile transmission, three days after being sent by first class mail, or one business day after being deposited for next-day delivery with Federal Express or another nationally recognized overnight delivery service, all charges or postage prepaid, properly addressed to the party to receive such notice at that party's address indicated above, or at any other address that either party may designate by notice to the other.
11. SEVERABILITY. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any and all other provisions hereof and shall remain in full force and effect.
12. NO THIRD-PARTY BENEFICIARIES. Neither party intends for this Agreement to benefit any third-party not expressly named in this Agreement.
13. TRADING AUTHORITY, CUSTODY, AND FEES.
a. Non-Discretionary Authority. Adviser will have the responsibility to select or make recommendations, based upon the needs of Client under an investment policy statement or client suitability form, as to any security (hereinafter called "Security" or "Securities"), as defined in Section 202(a)(18) of the Investment Advisor Act of 1940, as amended, (hereinafter called "the Act"). If such recommendations are accepted by the Client, Adviser will buy, sell, exchange, convert and otherwise trade in any Security as directed by Client. The Client shall at all times be at liberty to follow or disregard, wholly or partially, any information, recommendation, or advice given by the Adviser.
b. Discretionary Authority. Adviser will direct (or make recommendations with respect to) the Securities in the Account, subject to such limitations as Client may impose by notice in writing. Adviser, as agent and attorney-in-fact with respect to the Account and without prior consultation with Client, may buy, sell, exchange, convert and otherwise trade in any Security in Adviser's sole discretion. To enable Adviser to exercise fully its discretion and authority as provided in this section, Client hereby constitutes and appoints Adviser as Client's agent and attorney-in-fact with full power and authority for Client and on Client's behalf to buy, sell, exchange, convert and otherwise trade in any Security. THIS SECTION GRANTS ADVISER DISCRETIONARY AUTHORITY SOLELY FOR TRADING PURPOSES. AS A RESULT, NOTHING IN THIS AGREEMENT GRANTS ADVISER ANY POWER OTHER THAN A LIMITED POWER OF ATTORNEY AS FURTHER DESCRIBED THROUGHOUT THIS AGREEMENT.
c. CUSTODY. Custody of Client’s Securities will be maintained by a Qualified Custodian (hereinafter called "Custodian" whether one or more), as defined in Section 206(4)-2 of the Act or will be personally held and maintained by Client. All transactions will be consummated by payment to (or delivery by Client to) Custodian of all cash, checks, or securities due to or from the Account. While as a matter of policy and practice Advisor does maintain custody, Advisor's general policy is to ensure that we maintain client funds and securities with "qualified custodians" which provide at least quarterly account statements directly to our clients or a selected independent representative. Client authorizes Adviser to give Custodian instructions for the purchase, sale, conversion, redemption, exchange or retention of any Security, cash or cash equivalents or other investment for the Account. Client further authorizes Adviser to instruct Custodian to send Client monthly statements showing all transactions occurring in the Account during the period covered by the statement and to provide Adviser with those same statements. Client is responsible for reviewing statements and confirmations provided by Custodian and reporting any discrepancies to Adviser within thirty (30) days. Interim reports provided by Adviser at the request of Client are not to be relied upon as fact. Although Adviser will make all efforts to ensure that the information is timely and accurate, Client is to rely on statements and confirmations furnished by the Custodian. Client shall be responsible for all expenses related to trading the assets of the Account including, but not limited to, interest on margin borrowing, dividends payable with respect to Securities sold short, custodial fees, brokerage commissions, bank service fees, legal fees and expenses incurred in attempting to protect or enhance the value of the Securities in the Account and interest on Account-related loans and debit balances.
d. INITIAL START UP FEE. There may be an initial startup fee, not to exceed $500.00, for setting up Client's file. This is to defer the cost of incidentals such as multiple meetings with you and/or employees, completing all necessary financial documentation, help with any necessary government forms, and any mandatory administrative needs that may arise.
e. ADVISORY FEE.
i. FINANCIAL PLANNING FEE. If selected, Client shall pay Adviser a financial planning fee, as determined above, billable in arrears at the end of the month for the services to be rendered by Adviser under this Agreement. Client understands and agrees that the Planner Fee shall be in addition to the Asset Based Fee.
ii. ASSET BASED FEE. If selected, Client shall pay Adviser an annual asset based fee to Adviser for the services to be rendered by Adviser under this Agreement based on the net market value of the Client Account, from time to time, in accordance with the Asset Based Fee Schedule herein below. Client understands and agrees that the Asset Based Fee shall be in addition to the Planner Fee. PAYMENT & ACCOUNT VALUATION – Subject to the adjustments provided herein, the Asset Based Fee is billable in arrears and due at the close of the billing period assigned to Client and will be based upon the net market value of Client's Account. In computing the market value of Securities in the Account, each Security listed on any national securities exchange shall be valued at the last quoted sale price on the valuation date on the principal exchange on which such Security is traded. Any other Security in the Account will be valued in such manner as is reasonably determined in good faith by Adviser to reflect the fair market value thereof. Said first payment will be prorated in the event this Agreement is executed at any time other than on the first day of the assigned billing period. If a Security is deposited after the inception of an assigned billing period and subsequently withdrawn prior to the end of the same billing period, the Asset Based Fee chargeable with respect to such Security as of the next valuation date may be prorated based on the number of days during the billing period the Security is maintained in the Account; in computing the value of the account during any such billing period, such Security will be treated as if it had not been so withdrawn from the Account. CLIENT ACCOUNT AGGREGATION -- Client understands and agrees that Adviser may, in its sole discretion, aggregate clients, as defined under 17 CFR Section 275.203(b)(3)-1, toward achieving a reduced fee, provided that: a. each client is under an advisory agreement and in good standing with Adviser, b. the "client type" as defined under 17 CFR Section 275.203(b)(3)-1(a)(1) and 17 CFR Section 275.203(b)(3)-1(a)(2) are identical, and c. aggregation of the client accounts for purposes of obtaining a reduced management fee is not in violation of Federal or State securities laws. In the event it is determined that client account aggregating is in contradiction to Federal or State securities law, Adviser shall un-aggregate client accounts for purpose of fee billing without further notice to Client. Client understands and agrees that un-aggregating account may cause an increase in the Asset Base Fee.
g. RETAINER FEE. If selected, Client shall pay Adviser a retainer fee, as determined above, and billable in arrears for the services to be rendered by Advisers under this Agreement.
h. LATE CHARGE. All outstanding balances sixty days (60) past due are subject to an 18% interest charge retroactive to the original due date.
i. FEE SUBJECT TO CHANGE. Client understands and agrees that Adviser may adjust the Planner Fee, Asset Base Fee schedule, or Retainer Fee at any time after the first year that this Agreement is in effect, by giving the client thirty (30) days written notice.
j. FEE OFFSET. The Adviser's goal is to offer the best investment options available without regard to sales loads; as a result, any Security commissions paid to the registered representative will offset the fee up to that year's Asset Base Fee or Retainer Fee.
k. AUTOMATIC DEBITING - Client authorizes and directs Adviser to automatically debit each fee payable herein from Client Account. If the Account does not maintain a sufficient cash (or money market) balance to cover the fees, then Client directs Adviser to liquidate holdings in an amount sufficient to cover such fees.
l. EARLY EXIT FEE - If the Account is closed within the first four calendar quarters after it is opened, Client agrees to pay an early exit fee (the "Exit Fee') to cover the administrative cost of establishing the Account. If the Account is closed during the first three quarters, the exit fee shall be (a) payment of an amount equal to two quarterly fees. If the Account is closed during the fourth quarter, the exit fee shall be a fee for that fourth quarter. If the Account is closed after the first four calendar quarters have elapsed, no exit fee will apply. The Client will be billed for the days Adviser's services were used during that quarter.
22. INDEPENDENT CONTRACTOR. Adviser is and will hereafter act as an independent contractor and not as an employee of Client, and nothing in this Agreement may be interpreted or construed to create any employment, partnership, joint venture, or other relationship between Adviser and Client.
23. EFFECTIVE DATE OF AGREEMENT. Notwithstanding the date that this Agreement is signed or delivered by either party, the "Effective Date" shall be deemed to be the date first above written.
Exhibit A. CLIENT INFORMATION USA PATRIOTACT - The IAR must collect and submit client information in connection with provisions of USA Patriot Act. Identification information must be gathered for each new client account established with Access Financial Resources, Inc. (AFR) or any AFR sponsored relationship. The IAR is to submit the proper information with all new business applications and any supplemental documentation to be processed with new account application. If account holder, insured, annuitant, or entity is different from owner, please identify relationship to owner and reason owner is different. Note: Access Financial Resources, Inc. will not open an account for a non-U.S. citizen or a U.S. citizen that does not have a valid U.S. driver’s license or valid State photo ID.
Exhibit B. INVESTMENT POLICY STATEMENT – (for Non-ERISA or ERISA Pooled Accounts Only) ADDITIONAL INVESTOR INFORMATION INVESTMENT HOLDINGS: Generally, portfolios may consist of a selection of open-end, closed-end, exchange-traded and exchange-traded note mutual funds, variable annuity subaccounts, liquid and illiquid limited partnerships, and other pooled securities as well as structured products. (In rare instances, individual securities may be held within the portfolio. This is usually due to the inability to liquidate the security at a reasonable price, the illiquid nature of the security, and/or due to the client's desire to retain the security.) Collectively, all types of mutual funds and any pooled-type securities will be known as pooled securities hereinafter. Some of the entities will attempt to minimize risk by attempting to minimize volatility within the pooled security itself. A significant percentage of the Client's assets will be invested in pooled securities. The typical underlying securities invested in by the pooled securities may include both domestic and foreign securities as well as fixed income and equity securities including, but not limited to: U.S. government and government agencies: high and low grade corporate and/or municipal bonds; bank loans; foreign short term fixed income securities and bonds including those issued by emerging market countries; large and small company equities, both domestic and foreign; emerging market equities; real estate securities, both domestic and foreign including Real Estate Investment Trusts (REITs); managed futures; physical commodities and/or commodity futures of all types, commodity-related companies, such as mining companies and oil and gas exploration companies; hedge-like strategies such as mergers and acquisitions arbitrage; and short selling, as well as other special situations. Either the pooled-type securities themselves or the underlying securities of some of the investments may be illiquid and therefore difficult to sell. This may adversely affect the liquidation price of the investment, especially when there are a large number of redemption requests in a relatively short period. POTENTIAL BENCHMARKS USED: S&P 500 Index, Dow Jones UBS Commodity Index, Russell 2000, Small Cap Index, Russell Mid Cap Index, MSCI EAFE Index, S&P Diversified Trends Indicator, and Barclays Aggregate Bond Index. REBALANCING: For Discretionary Accounts, we may rebalance the portfolio after any client review meeting, annually, or as needed based on the portfolio becoming out of balance. For Non-Discretionary Accounts, we will only rebalance with client approval. PROXY VOTING: Access Financial Resources, Inc. does not vote proxies, but we are available to help with any questions. Client is responsible for voting all proxies. MARKET VOLATILITY: The various sectors of the financial markets can decrease 20% to 40% and possibly even more in a relatively short period. This can translate into similar decreases within the portfolio as well as for the portfolio itself.
Exhibit C. INVESTMENT POLICY STATEMENT – (ERISA SDBA Accounts Only) The purpose of these provisions is to establish the investment policy for the Plan with self-directed brokerage account only. The intention of the investment policy is to summarize the philosophy and process for the selection, monitoring, and evaluation of the investment options. The Trustee intends the Plan to be structured as an ERISA Section 404(c) plan, which relieves the fiduciaries for any losses that are the direct and necessary result of the investment instructions given by a participant.
1. PARTICIPANT CONTROL AND COMMUNICATION
A. The Trustee of the Plan intends to:
1. Provide each individual participant an opportunity to exercise independent control over the assets in his or her account;
2. Provide each participant the opportunity to give instructions exercising control over the assets in their account with a frequency that is appropriate for each investment option in light of each option’s volatility;
3. Provide each participant an opportunity to choose from a broad range of investment options and to choose the manner in which their assets are invested;
4. Provide each participant an opportunity to consult with an independent financial advisor and to receive sufficient information to make informed decisions regarding the investment options available to him or her in the Plan;
5. Give to each participant the responsibility to provide investment instructions for their account balance and future contributions directly to the identified Plan recordkeeper; and
6. Provide for each participant who fails to give investment instructions regarding their account, default methods to maintain such balances and contributions according to the asset classes/investment style of the last investment direction that the participant provided; or if none was provided, then to invest in the default investment option as selected by the Trustee; however, notwithstanding the Trustee’s action, the affected participant maintains the opportunity to provide investment instructions regarding their account.
B. The Trustee of the Plan intends to communicate to each participant:
1. A general description of each investment’s objective, risk and return characteristics, and type and diversification of underlying holdings. Participant-level communications will include investment option descriptions and will be provided to eligible enrollees prior to their making investment elections;
2. An explanation of the circumstances under which a participant may give investment instructions;
3. For non-mutual funds, a description of any transaction fee or expenses in connection with the investment option purchase and sale; and
4. For mutual funds, a copy of the most recent prospectus prior to or immediately after an employee’s initial investment in the fund, and the names and addresses of the responsible fiduciaries who can furnish copies of any prospectus, financial statements, or reports to the extent such information is provided to the Plan for each investment option.
Communication may be accomplished through a variety of media (e.g. summary plan descriptions, investment options brochure, service providers’ web sites, and other related links to investment options, email, etc.). Selected service providers will assist the Trustee with these duties; however, it is the responsibility of the Trustee to see that appropriate procedures have been established to carry out each these commitments to the Plan participants.
2. INVESTMENT SELECTION AND REVIEW
Recognizing that a defined contribution program can provide a primary method for retirement saving and that individual participants will have differing circumstances and investment objectives, this Plan offers a variety of investments options intended to provide a sound and flexible means to arrange the portfolio to materially affect both potential return and the degree of risk for each participant.
A. The Trustee of the Plan intends to select investments that:
1. Cover a broad risk and return spectrum of appropriate investment classes;
2. Include one investment option that is an income-producing, low-risk, liquid fund;
3. Are distinguishable and have different risk and return characteristics;
4. Are professionally managed and sufficiently diversified;
5. Charge fees that are reasonable for the asset class and investment style and minimizing to the extent possible 12b-1 fees, short-term redemption fees, up-front/deferred charges, and sub-TA fees; and
6. In the aggregate, provide each participant the opportunity to structure a portfolio appropriate for their level of risk tolerance through some combination of available investment options.
B. The Trustee’s general criteria in selecting an investment may include:
1. The size, history, and reputation of the investment firm that manages the investment option;
2. The education, tenure, and previous experience of the individual manager for each investment option;
3. The investment objectives, philosophy, and structure of the investment option;
4. The historical risk and return measured against the appropriate benchmark and/or category peer group; and
5. The total cost to the participant, which includes purchase or exchange fees as well as annual operating expenses.
C. The Trustee’s investment review policy is as follows:
The Trustee of the Plan will track performance on a quarterly basis and fully review the investment options at least annually. The annual review may include the aforementioned intentions and criteria under sections 2A and 2B. Each investment option will be compared against recognized appropriate index and/or category peer group with similar styles. Performance may be considered over a full market cycle, a twelve-month period, three-year period, and/or five-year period. Should an investment option fail to satisfy its risk/return criteria, or should some other material change prompt concerns as to the appropriateness of continuing to offer that investment option through the Plan, the Trustee, in his or her sole discretion, may take any or all of the following actions:
1. Establish a probationary period during which any area of concern will be assessed and, if necessary, corrected.
2. Supplement the investment option(s) with one or more alternative option(s) for that category.
3. Replace the investment option(s) with one or more alternative option(s) for that category.
4. Eliminate the investment option.
3. SERVICE PROVIDERS’ RESPONSIBILITIES
The Investment Service Provider(s)1 and/or Consultant Service Provider(s)2 may assist the Trustee with the following:
1. Communicating with and reporting to the Trustee on a regular basis;
2. Notifying the Trustee of any issue that may materially impact the investment of Plan assets;
3. Investing Plan assets with the care, skill, prudence, and diligence that an investment professional would exercise in the investment of those assets;
4. Meetings as requested with the Trustee to discuss investment strategy and review past performance;
5. Preparing periodic performance evaluation reports;
6. Assisting the Trustee with the analysis for the performance review; and
7. Assisting the Trustee in developing and reviewing the investment strategies and fund selection.
These guidelines3 will be revised and modified as appropriate on a periodic basis to reflect such factors as changes in the investment environment, manager performance, participant objectives, and Trustee’s expectations.
INVESTMENT POLICY STATEMENT – (ERISA SDBA Accounts Only) Foot Notes:
1 Investment Providers generally are personnel of the financial advisory firm, but may include portfolio managers, relationship managers, and/or representatives.
2 Consultant Providers generally are personnel of the third-party administration firm, but may include portfolio managers, relationship managers, and/or representatives.
3 These guidelines are just that, guidelines; as a result, the Trustee is not strictly bound by these guidelines and may deviate as prudently decided by the Trustee under the circumstance presented. However, it is the intention of the Trustee at all times to comply with ERISA rules and regulations.
Exhibit D. FIDUCIARY ANALYSIS: ACKNOWLEDGEMENT AND DOCUMENTATION (for Qualified Funds Transfers Only): The proposal recommended by your IAR will be analyzed against your current plan and a reasonable alternative (if applicable). If you are already considering an alternative, then please inform the IAR assisting you. If not, a reasonable alternative will be selected for analysis purposes based on the needs you have expressed. If qualitative and quantitative information for the alternative you are considering is not available, then the IAR assisting you may need to make assumptions based on reasonable industry standards and benchmarks. The DOL’s conflict of interest final rule and related exemptions are designed to protect investors by requiring all who provide retirement investment advice to plans, plan fiduciaries and IRAs to abide by a "fiduciary" standard—putting their clients' best interest before their own profits. For a recommendation to constitute fiduciary investment advice, it must be rendered for a fee or other compensation. Level fee fiduciaries who wish to take advantage of streamlined exemptive conditions will be required to disclose their fiduciary status to retirement investors, and document the reasons for the recommendation of a rollover from an ERISA plan to an IRA, or from another IRA or from a commission-based account to a fee-based account.
A 3(21)-investment fiduciary is a paid professional who provides investment recommendations to a retirement plan sponsor/trustee. The sponsor/trustee retains ultimate decision-making authority for the investments. Both 3(21) and 3(38) investment managers have fiduciary responsibility. The key distinction – and advantage – of appointing of a 3(38)-investment manager is the shifting of fiduciary responsibility. By appointing a 3(38)-investment manager, the plan sponsor and all other plan fiduciaries are relieved of all fiduciary responsibility for the investment decisions made by the investment manager. Access Financial Resources, Inc. is a level-fee fiduciary. The advisor/planner will consider the recommendation on the Client’s (i) age, (ii) investments outside of the plan, (iii) financial situation, (iv) tax status, (v.) investment goals and experience, (vi.) investment time horizon, (vii.) liquidity needs, and (viii.) risk tolerance, as well as other information the Client may disclose. To provide retirement investment advice as a level-fee fiduciary and maintain compliance with the Department of Labor, the above information will be documented and recorded to support any recommendation regarding the transfer or rollover of any retirement plan or IRA. This information has been developed by the U.S. Department of Labor, Employee Benefits Security Administration. For more information, please visit: https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/fact-sheets/dol-final-rule-to-address-conflicts-of-interest. By signing, client agrees that the information presented is true and accurate to the best of their knowledge.