Financial Planning and Investment Management Agreement
1. Member Agreement
a. Member hereby appoints Facet Wealth, Inc. (“Facet” or “Planner”) as an Investment Adviser to perform the services hereinafter described, and Planner accepts such appointment.
b. Scope of Services
Financial Planning
The Planner shall provide Member with the financial planning and/or consulting services as designated by the Member. The services provided depend on the nature and complexity of the Member’s situation and could include some or all of the following: financial goal setting, portfolio design and asset allocation, risk tolerance and capacity analysis, investment management, cash flow and expense planning, debt management and planning, employee benefits planning, employer stock plan analysis, retirement planning, education planning, risk management and insurance planning, estate planning and beneficiary, income tax planning, trust planning, small business planning. There are specific additional services, such as tax preparation or estate planning, that may be offered. Those specific services will be governed by an agreement separate from this Member Agreement.
Planner’s recommendations (i.e. investments, estate planning, retirement planning, taxes, insurance, etc.) shall be discussed by the Planner with the Member and implemented, limited solely to the scope of the financial plan, at Member’s sole discretion with the corresponding professional advisors (i.e. broker, accountant, attorney, etc.) of Member’s choosing. Member acknowledges that in respect to estate planning matters, Planner’s role shall be that of a facilitator between the Member and their corresponding legal professionals. In addition, if a Member chooses to use a service offered by Facet, they acknowledge that they will be governed by a separate agreement. No portion of Planner’s services should be interpreted as legal or accounting advice.
Investment Management
Investment management is included as part of the planning fee and it is the member’s choice if they want to engage Facet in investment management services or not.
The Member acknowledges that past performance may not be indicative of future results, and understands that the future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended by the Planner) may not be profitable or equal historical performance level(s).
Discretionary Basis
For accounts that the member has designated for Planner to manage on a discretionary basis, Planner is authorized, without prior consultation with the member to buy, sell, trade and allocate in and among stocks, bonds, mutual funds and exchange traded funds.
Planner shall be responsible for the investment and reinvestment of assets specifically designated by the Member to be subject to Planner’s discretionary management (which assets, together with all additions, substitutions and/or alterations thereto are hereinafter referred to as the “Assets” or “Account”). Member delegates to Planner all of Member’s powers with regard to the investment and reinvestment of the Assets and appoints Planner as Member’s attorney and agent in fact with full authority to buy, sell, or otherwise effect investment transactions involving the Assets in Member’s name for the Account and to give instructions in furtherance of such authority to the registered broker-dealer and the custodian of the Assets. In addition, Member shall execute a custodial agreement with a qualified custodian that will provide Facet with the ability and discretion to trade on behalf of the Member at the selected custodian.
Planner shall discharge its investment management responsibilities consistent with the Member’s designated investment objectives. Unless the Member has advised the Planner to the contrary, in writing, there are no restrictions that the Member has imposed upon the Planner with respect to the management of the Assets.
Non-Discretionary Basis
For accounts that cannot be managed by Facet, the Planner will provide the Member with portfolio review and investment consulting services. The Planner shall review the Member’s existing investment portfolio, and then provide corresponding investment recommendations and advice consistent with the Member’s designated investment objective(s), all of which recommendations and advice shall be based exclusively upon the information provided to the Planner by the Member. The Member acknowledges that the Planner’s recommendations may be limited to certain investments. If the Planner provides such service, the Planner’s authority shall be limited to the allocation of the Assets among the investment alternatives available and, as such, Planner will not have, nor will it accept, any authority to effect any other type of transactions or changes via the account web site, including but not limited to changing beneficiaries or effecting Account disbursements or transfers to any individual or entity. The member acknowledges that it is their responsibility to implement and execute any recommendations made by the planner.
c. The Member agrees to provide information and/or documentation requested by Planner in furtherance of this Agreement as pertains to Member’s objectives, needs and goals, and to keep Planner informed of any changes regarding the same. The Member acknowledges that Planner cannot adequately perform its services for the Member unless the Member diligently performs their responsibilities under this Agreement. Planner shall not be required to verify any information obtained from the Member, Member’s attorney, accountant or other professionals, and is expressly authorized to rely thereon.
d. With a Member’s prior written authorization, the Planner may respond to inquiries from, and communicate and share information with, Member’s attorney, accountant and other professionals to the extent necessary in furtherance of Planner’s services under this Agreement.
e. The Member is free to obtain legal, accounting, and brokerage services from any professional source to implement the recommendations of Planner. Member may impose reasonable restrictions on the Planner’s authority.
f. In the event that a Member’s personal/financial situation or investment objective(s) change, it is the Member’s responsibility to notify the Planner accordingly for the purpose of the Planner reviewing, evaluating or revising previous recommendations. To the extent that any portion of the financial plan is not implemented by Planner, Member maintains absolute discretion as to whether or not to accept any of the Planner’s investment recommendations.
2. Agreement Term and Planner Compensation
This agreement is effective for one year and will automatically renew at the end of the term. Planner will notify Member at least 30 days in advance of the renewal or fee changes and will also notify Member of any material changes to the terms of agreement in a timely manner.
Member’s annual fixed fee is set forth in the electronic authorization of the Member agreement. The Planner’s annual fixed fee for Financial Planning includes Investment Management Services provided under this Agreement and shall be based upon various objective and subjective factors, including, but not limited to, the Financial Planning Services selected for and agreed to by the Member, the complexity of the financial planning to be rendered by Planner, the representative assigned to the account, the anticipated number of meetings and servicing needs, and level and scope of the overall services to be rendered. The non-refundable fee for services covers the full term (1 year) and shall be paid in advance. The full term begins on the day the Member executes this Planning agreement and continues for one year. Facet will regularly engage the Member through communication (email, phone, text) and meeting appointments, and given the work involved in preparation and engagement, the fee paid for the period is in effect regardless of whether the Member takes advantage of the services. The fee may be paid either annually or quarterly. No increase in the annual fee shall be effective without prior written notice to the Member at least 30 days in advance. With notification, Facet may use negative election (i.e. the Member must opt out of the change) to automatically increase the fee for service after the notice period.
a. All fees are initially paid by credit card through the Facet application. All credit card payments are processed through a third party and no credit card information is retained directly by Facet. Members will not be asked to provide credit card information via email, video conference or phone call. For Member’s taking advantage of our investment management services, unless the member opts-out, fee collection will be switched to account debit from an investment account once the fee percentage reaches 2% or less of the Member’s total investments. Member authorizes the Custodian of the assets to charge the Account for the amount of Planner’s fee and any additional Investment Management fees and to remit such fee to Planner in compliance with regulatory procedures. Please Note: In the event that there is not sufficient cash in the Account to pay Planner’s fee, the Planner shall sell Assets to pay the fee.
b. In addition to Planner’s fee, the Member shall also incur, relative to: [1] all mutual fund and exchange traded fund purchases, charges imposed directly at the fund level (e.g. management fees and other fund expenses); [2] custodians, any miscellaneous account fees, such as wire close out or block trading fees, charged directly by the custodian and disclosed upon account opening. A comprehensive list of custodian based fees can be found on our website.
c. Member acknowledges that Member will be solely responsible for accepting or rejecting Planner’s financial planning advice and for implementing any such investment recommendations or advice. Planner may recommend itself, one of its affiliates, or a third party to assist the Member with implementation of Planner’s financial planning advice. A conflict of interest exists where Planner recommends itself or any of its affiliates to implement any such advice. Member understands that Member may choose any advisor, brokerage firm, or other professionals to implement the recommendations and advice given by the Planner.
Where Planner introduces to Member a third party to provide services in connection with the implementation of Planner’s financial planning advice (such as third party services pertaining to the preparation of estate planning documents or the preparation of tax documents), Planner can charge Member an administrative fee for time and resources incurred by the Planner in facilitating the provision of such services with the third party.
d. No portion of Planner’s compensation shall be based on capital gains or capital appreciation of the Assets.
e. Facet reserves the right to offer promotions which may include waived enrollment fees, investment account rewards or additional promotional offers. These promotions are subject to change and are bound by separate terms and conditions.
3. Investment Risk/No Guarantee
The Member acknowledges and accepts that investments have varying degrees of financial risk and that there can be no guarantee that any investment will be profitable. The Member further acknowledges that Planner shall not be responsible for any adverse financial consequences to Member’s investment assets: (1) if such investment(s), at the time recommended, were consistent with the Member’s designated investment objectives; or, (2) resulting from the investment decisions (or any other errors, actions or omissions) made by the Member’s other investment advisors, including, but not limited to, those investment professionals that have discretionary authority over a portion of the Member’s assets. Planner does not guarantee the future performance of the Account or any specific level of performance, the success of any investment recommendation or strategy that Planner may take or recommend for the Account, or the success of Planner’s overall management of the Account. Member understands that investment recommendations for the Account by Planner are subject to various market, currency, economic, political and business risks, and that those investment decisions will not always be profitable.
4. Termination
The agreement shall remain in effect until terminated in writing by either party. Termination of this Agreement will not affect (i) validity of an action previously take by Planner under this Agreement; (ii) liabilities or obligations of the parties from transactions initiated before termination of this Agreement; or (iii) Member’s obligation to pay non-refundable advisory fees through the end of the payment period outlined in the subscription. Upon the termination of this Agreement, Planner will have no obligation to recommend or take any action with regard to the securities, cash or other investments in the Account.
5. Disclosure Statement
Member hereby acknowledges prior receipt of a copy of the Planner’s written Disclosure Statement as set forth on ADV Part 2A and ADV Part 3 (Form CRS). The Disclosure Statement discusses the scope of the Planner’s services, fees, and any corresponding conflicts of interest. Member further acknowledges that Member has had a reasonable opportunity to review said Disclosure Statement, and to discuss the contents of the same with professionals of Member’s choosing, prior to the execution of this Agreement.
6. Planner Liability
The Planner, subject to the limitations set forth in this Agreement, acting in good faith, shall not be liable for any action, omission, investment recommendation/decision, or loss in connection with this Agreement including, but not limited to, the investment of the Assets, or the acts and/or omissions of other professionals or third party service providers recommended to the Member by the Planner, including a broker-dealer and/or custodian, attorney, accountant, insurance agent, or any other professional. If the Account contains only a portion of the Member’s total assets, Planner shall only be responsible for those assets that the Member has designated to be the subject of the Planner’s investment management services under this Agreement without consideration to those additional assets not so designated by the Member.
If, during the term of this Agreement, the Planner purchases specific individual securities for the Account at the direction of the Member (i.e. the request to purchase was initiated solely by the Member), the Member acknowledges that the Planner shall do so as an accommodation only, and that the Member shall maintain exclusive ongoing responsibility for monitoring any and all such individual securities, and the disposition thereof. Correspondingly, the Member further acknowledges and agrees that the Planner shall not have any responsibility for the performance of any and all such securities, regardless of whether any such security is reflected on any quarterly Account reports prepared by Planner. In addition, with respect to any and all accounts maintained by the Member with other investment professionals or at custodians for which the Planner does not maintain trading authority, the Member, and not the Planner, shall be exclusively responsible for the investment performance of any such assets or accounts.
The Member further acknowledges and agrees that Planner shall not bear any responsibility whatsoever for any adverse financial consequences occurring during the Account transition process (i.e., the transfer of the Assets from the Member’s predecessor advisors/custodians to the Accounts to be managed by the Planner), including, but not limited to, adverse consequences resulting from:
(2) failure to be protected or benefit from any market-related events, including market corrections or advances; or,
(3) any account transfer, closing or administrative charges or fees imposed by the previous broker- dealer/custodian.
The federal and state securities laws impose liabilities under certain circumstances on persons who act in good faith, and therefore no portion of the above shall constitute a waiver or limitation of any rights which the Member may have under any federal or state securities laws, ERISA, or under the rules promulgated by the Employee Benefits Security Administration and/or the Department of Labor.
7. Assignment
This Agreement may not be assigned (within the meaning of the Investment Advisers Act of 1940) by either Member or Planner without the prior consent of the other party. Member acknowledges and agrees that transactions that do not result in a change of actual control or management of Planner shall not be considered an assignment pursuant to Rule 202(a)(1)-1 under the Investment Advisers Act of 1940. Should there be a pending change in control of the Planner that will result in an assignment of this Agreement (as that term is defined under the Advisers Act), the Member will be provided with written notice of such event. If the Member does not object to such assignment, in writing, it will be assumed that the Member has consented to the assignment, and services will continue to be provided to the Member under the terms and conditions of this Agreement.
8. Non-Exclusive Management
Planner, its officers, employees, and agents, may have or take the same or similar positions in specific investments for their own accounts, or for the accounts of other Members, as the Planner does for the Assets. Member expressly acknowledges and understands that Planner shall be free to render investment advice to others and that Planner does not make its investment management services available exclusively to Member. Nothing in this Agreement shall impose upon Planner any obligation to purchase or sell, or to recommend for purchase or sale, for the Account any security which Planner, its principals, affiliates or employees, may purchase or sell for their own accounts or for the account of any other Member, if in the reasonable opinion of Planner such investment would be unsuitable for the Account or if Planner determines in the best interest of the Account it would be impractical or undesirable.
9. Fund Transfers
The member grants authorization to Facet for the purpose of transferring cash or securities between the member’s accounts held at the same qualified custodian, provided that these accounts have identical or common owner registrations. Both one-time and ongoing transfer requests will be accepted upon receiving and verifying the authenticity of the member’s instructions. This authority does not extend to wire disbursements, check disbursements, or any third party transfers.
10. Proxies
The Planner does not vote proxies. The Member shall be responsible for: (1) directing the manner in which proxies solicited by issuers of securities beneficially owned by Member shall be voted and (2) making all elections relative to any mergers, acquisitions, tender offers, bankruptcy proceedings or other type events pertaining to the Assets.
11. Reports
Planner and/or Account custodian shall provide Member with periodic reports electronically for the Account. In the event that the Planner provides supplemental Account reports which include assets for which the Planner does not have discretionary investment management authority, the Member acknowledges the reporting is provided as an accommodation only and does not include investment management. Additionally, any such supplemental reports shall be viewed as a snapshot in time and only reflective of the date of the report.
12. Death/Disability/Incompetency
The death, disability or incompetency of the Member will not terminate or change the terms of this Agreement. However, Member’s executor, guardian, attorney-in-fact or other authorized representative may terminate this Agreement by giving written notice and appropriate documentation to Planner. Member recognizes that the custodian may not permit any further Account transactions until such time as any documentation required is provided to the custodian.
13. Arbitration
Subject to the conditions and exceptions noted below, and to the extent not inconsistent with applicable law, in the event of any controversy, dispute or claim arising out of or relating to this Agreement, both Planner and Member agree to submit the dispute to arbitration before a single arbitrator in accordance with the Commercial Rules of the American Arbitration Association (AAA) then in effect. Planner and Member understand that such arbitration shall be final and binding, and that by agreeing to arbitration, both Planner and Member are waiving their respective rights to seek remedies in court, including the right to a jury trial.
Member understands that this Agreement to arbitrate does not constitute a waiver of your right to seek a judicial forum where such waiver would be void under federal or applicable state securities laws. Member acknowledges that he/she/they has had a reasonable opportunity to review and consider this arbitration provision prior to the execution of this Agreement.
14. Severability
Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms or provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction.
15. Member Conflicts
If this Agreement is between Planner and related Members (i.e. spouse, life partners, etc.), Planner’s services shall be based upon the joint goals communicated to the Planner. Planner shall be permitted to rely upon instructions from either party with respect to the Assets, unless and until such reliance is revoked in writing to Planner. Planner shall not be responsible for any claims or damages resulting from such reliance or from any change in the status of the relationship between the Members.
16. Amendments
The Planner may amend this Agreement upon written notification to the Member. Unless the Member notifies the Planner to the contrary, in writing; the amendment shall become effective thirty (30) days from the date of delivery.
17. Privacy Notice
The Member acknowledges receipt of the Planner’s Privacy Notice.
18. Applicable Law/Venue
To the extent not inconsistent with applicable law, this Agreement shall be governed by and construed in accordance with the laws of the State of Maryland. In addition, to the extent not inconsistent with applicable law, the venue (i.e. location) for the resolution of any dispute or controversy between Planner and Member shall be the City of Baltimore, State of Maryland.
19. Electronic Delivery
Through prior electronic authorization and through this agreement, the Member authorizes the Planner to deliver, and the Member agrees to accept, all required regulatory notices and disclosures via electronic mail and/or via the Planner’s internet web site, as well as all other correspondence from the Planner. Planner shall have completed all delivery requirements upon the forwarding of such document, disclosure, notice and/or correspondence to the Member’s last provided email address (or upon advising the Member via email that such document is available on the Planner’s web site). Please Note: It is the Member’s obligation to notify the Planner, in writing, of any changes to the Member’s email address. Until so notified, the Planner shall rely on the last provided email address. The Member acknowledges that the Member has the ongoing ability to receive and open standard electronic mail and corresponding electronic documents. If, at any time, the Member’s electronic delivery situation changes, or the Member is unable to open a specific document, the Member agrees to immediately notify the Planner so that the specific issue can be addressed and resolved. Please note that by executing this agreement, the Member releases and holds the Planner harmless from any and all claims and/or damages of whatever kind resulting from the Planner’s electronic transmission of information, provided that Planner has correctly addressed the electronic transmission to the Member and/or other intended recipient.
20. Representations/Authority
The parties respectively represent as follows, and agree to promptly notify the other party in writing, in the event that any representations should change:
a. If Member is an individual, Member represents that he/she/they: (i) is of legal age and capacity, (ii) has full authority and power to retain Advisor, (iii) the execution of this Agreement will not violate any law or obligation applicable to the Member, and, (iv) the Member owns the Assets, without restriction or encumbrance.