WSP/COE Manual (SEC REGISTERED – REGULATOR SPECIFIC, CUSTOMIZED OPTION) (F4)
RIA COMPLIANCE CONSULTANTS, INC.COMPLIANCE CONSULTING AGREEMENT – WSP/COE ( SEC REGISTERED – REGULATOR SPECIFIC, CUSTOMIZED OPTION)
This Compliance Consulting Agreement – WSP/CoE (SEC Registered – Regulator Specific, Customized Option) and the Schedule(s) and Addendum(s) attached hereto and incorporated herein (the "Agreement") is between RIA Compliance Consultants, Inc., a Nebraska corporation located at 6910 Pacific Street, Suite 102, Omaha, Nebraska 68106 ("RCC"), and the client as identified below (the "Client").
Section 1. WSP/CoE Service
Client or an entity controlled by Client (collectively referred to as “Client”) whose principal place of business is in is registered or is in the process of registering as an investment advisor with the U.S. Securities and Exchange Commission ("Securities Regulator"), and RCC will provide Client with its written supervisory procedures and code of ethics service as described within this section ("WSP/CoE Service" or “Services”).
By executing this Agreement and making an advance payment to RCC of the consulting fee, Client may retain RCC WSP/CoE Service as described below.
Client will provide information about Client’s investment advisor’s personnel, business model, procedures and practices. This option will include up to 3 hours (“Budgeted Hours”) of consulting and drafting time with an RCC consultant. Information provided by Client is then entered into RCC’s electronic written supervisory procedures and code of ethics (“WSP/CoE”) authoring wizard, which will automatically create for Client a customized WSP/CoE (“Regulator Specific, Customized WSP/CoE”) as it relates to the applicable topics listed below. This Regulator Specific, Customized WSP/CoE is customized by RCC’s electronic authoring wizard based upon the published investment advisor rules of Client’s Securities Regulator and the information provided by Client regarding the Client’s investment advisor’s personnel, business model, procedures and practices.
This Regulator Specific, Customized WSP/CoE template will address the following applicable topics: registration and notice filing requirements including representative licensing; client communications (advertising and correspondence);social media and networking websites; best execution; books and records; business continuity and disaster recovery; code of ethics; personal securities transaction and holding reports; client complaints; custody; client directed brokerage; trading practices including soft dollar arrangements; solicitor arrangements; privacy of client information; Form ADV disclosures and annual offer; insider trading; proxy voting; political contributions; handling whistleblower complaints; Schedule 13D, 13F, & 13G filings; and foreign clients.
This option will also include some sample forms to assist you in performing various compliance duties. At a minimum, the following sample forms will be provided under this option: annual compliance calendar checklist, books and records documentation log, suggested list of compliance files and reports, code of ethics acknowledgement form, compliance manual acknowledgement form, sample customer privacy policy notice, and customer privacy notice request / receipt log.
Section 2. Consulting Fee
The fixed consulting fee is $1,295 (“Fixed Consulting Fee”) for this WSP/CoE Service. After receiving this executed Agreement and the Fixed Consulting Fee, RCC will email Client a questionnaire and/or will contact Client to schedule a consultation call. The Fixed Consulting Fee for this option includes up to 3 Budgeted Hours of consulting and/or drafting work by an RCC consultant to assist Client with the customization of the Regulator Specific Customized WSP/CoE. Within two business days of Client providing RCC the necessary information through the completed questionnaire and/or consultation call, RCC will email a draft, Regulator Specific Customized WSP/CoE prepared by an RCC consultant. Budgeted Hours can be used during the initial consultation call when the Client provides specific information about the Client’s investment advisor’s personnel, business model, procedures and practices or upon Client’s receipt and review of the draft Regulator Specific Customized Manual if Client requests additional revisions to the draft. The Fixed Consulting Fee is non-refundable even if the 3 Budgeted Hours are not used. Client is responsible for understanding, reviewing, finalizing, implementing, and updating the WSP/CoE.
Upon presentation of the initial WSP/CoE draft, the Fixed Consulting Fee will be considered earned.
The Fixed Consulting Fee is limited solely to compensating RCC for providing the Services under this Agreement. There are additional consulting fees if Client requests RCC to perform tasks or prepare documents not included in the Services under this Agreement.
If Client requests RCC to perform consulting work exceeding the Budgeted Hours under Section 1 of this Agreement, RCC may require Client to pay a retainer in advance (“Subsequent Retainer Amount”) and will charge Client an hourly fee at the RCC consultant’s standard hourly billing rate and also subject to our Minimum Fixed Fee Schedule. In particular, the hourly rate of Senior Compliance Consultants Jarrod James, Tom Zielinski, Teresa O’Grady and Tammy Emsick, is $255 per hour and the hourly rate of Senior Compliance Consultant Bryan Hill is $325 per hour. The hourly rate of a Compliance Consultant is in the range of $200-$250 per hour depending upon the Compliance Consultant of RCC. The hourly rate of a Compliance Analyst of RCC is in the range of $125 to $175 per hour depending upon the Analyst. The rate of a Compliance Specialist of RCC is $95 per hour. (RCC reserves the right to raise the minimum fees indicated in the Minimum Fixed Fee Schedule or the hourly rate of its Senior Compliance Consultants, Compliance Consultants, Compliance Analysts, Compliance Specialists or any other RCC staff member after giving the Client a 30 day advance notice of the new rates). The hourly fee will be billed in minimum increments of one-twelfth of an hour and will be deducted from such a retainer upon presentment of the invoice. In the event that RCC does not require Client to pay a retainer in advance, all hourly charges will be due immediately upon presentment of the invoice. To the extent that RCC performs a task/activity or set of tasks/activities listed on the Minimum Fixed Fee Schedule, Client will be charged the greater of the hourly fees incurred using the rates described above or the minimum fixed fee listed on the Minimum Fixed Fee Schedule. RCC reserves the right to add, change and delete the tasks/activities and corresponding fees of the Minimum Fixed Fee Schedule effective immediately upon RCC giving client notice of applicable additions, changes or deletions.
RCC may provide the Client with sample forms under Section 1 of this Agreement or purchased separately by Client. The providing of such sample forms to Client does not include discussion with the Client’s customization of the sample for or assistance with customizing the sample form. To the extent that Client requests RCC to discuss the customization of the sample form or to customize a sample form for the Client, RCC will bill against the Budgeted Hours, if available, or at the consultant’s hourly rate if Budgeted Hours have been expended for time spent discussing or preparing the customized form. If the sample form is not provided as part of this Agreement, RCC may charge Client the current published price for the sample form plus the additional hourly work by RCC’s staff to discuss such form with Client and customize the sample form to Client’s specifications and/or requirements.
If Client terminates this Agreement prior to the end of the initial Agreement Period, the Consulting Fee is non-refundable and any remaining or outstanding balance of the Consulting Fee is due immediately. Client authorizes RCC to charge Client’s credit card for the full remaining balance of the Consulting Fee.
Any Subsequent Retainer Amount paid by Client after the Consulting Fee must be utilized for consulting, services and/or expenses of RCC within 12 months of such payment or requested in writing by Client for refund within 12 months of such payment; Subsequent Retainer Amount will not be available for refund nor to apply against the fees or expenses of RCC after 12 months from payment of such Subsequent Retainer Amount.
Arrangements can be made to pay RCC’s consulting fees via credit card. If Client selects this method of payment, Client hereby agrees that if Client has a dispute with RCC, Client will not raise this dispute with Client's credit card company or seek adjudication of any dispute with RCC through or by Client's credit card company. Client agrees that if Client pays the consulting fees via credit card, Client will not instruct Client's credit card company to reverse such charges.
Client will pay the Fixed Fee in advance by charging a credit card online at www.RIA-Compliance-Consultants.com/pay during checkout at RCC’s online store.
Section 3. Term of Engagement
The Services provided by RCC under this Agreement shall be considered concluded upon the soonest of any one of the following events: (a) upon Client’s written approval; (b) upon RCC’s presentment of a draft Regulator Specific, Customized WSP/CoE; (c) if the Client does not submit completed questionnaire or provide information requested by RCC within thirty (30) days of RCC presenting the questionnaire to Client or requesting information from Client, upon presentment of a draft WSP/CoE template for Client’s self-customization; (d) if Client does not seek any revisions to the draft Regulator Specific, Customized WSP/CoE within thirty (30) days of the presentment of the last draft of the WSP/CoE; or (e) upon RCC’s presentment of a draft WSP/CoE after incurring Budgeted Hours (assuming Client and RCC have not agreed to an hourly arrangement for consulting work beyond the Budgeted Hours).
Either Client or RCC may initiate early termination of the Services provided under this Agreement before completion of all the Services by giving the other party written notice of such termination. In the event that Client initiates early termination of the Services under this Agreement before RCC commences any work for Client, RCC will refund the Fixed Consulting Fee paid in advance less any charge incurred by RCC for processing the original credit card transaction (“administrative charge”). Such refund will be paid to Client within 30 days of receiving Client’s written notice of early termination. As previously indicated under the “Payment Terms” section of this Agreement, the Fixed Consulting Fee will be considered earned upon presentation of the initial draft WSP/CoE. Once the WSP/CoE draft has been presented no refund of any portion of the Fixed Consulting Fee will be provided regardless of whether the Client has used any of the Budgeted Hours, if applicable.
In the event that Client initiates early termination of the Services under this Agreement after RCC commenced work for Client and prior to RCC’s actual presentment of the WSP/CoE, RCC is entitled to deduct from the advance payment of the Fixed Consulting Fee for any work done by the RCC consultant prior to receiving notice of termination. RCC will bill for work completed at the RCC consultant’s standard hourly billing rate previously disclosed in this Agreement. The remainder, if any, of the advance payment less any administrative charge originally paid for using a credit card will be refunded by RCC to Client. Such refund will be paid by RCC to Client within 30 days of receiving Client’s written notice of early termination.
If RCC provided any other services pursuant to Payment Terms Section of this Agreement, Client authorizes RCC to deduct such amount from the Fixed Consulting Fee or other consulting fees paid in advance. The remainder, if any, of the advance payment of any consulting fees less any administrative charge originally paid for using a credit card will be refunded by RCC to Client. Such refund will be paid by RCC to Client within 30 days of receiving Client’s written notice. Client shall pay in full RCC within 30 days of receiving a final invoice of any and all consulting fees due under Payment Terms Section that are still outstanding after the above described deductions of the consulting fees paid in advance.
If Client either through action or inaction does not provide the requested information for purposes of preparing the draft WSP/CoE within thirty (30) days of RCC requesting the information, this shall not be deemed as an early termination. RCC will deliver a draft WSP/CoE template for Client’s customization. Client will not be entitled to a refund or write-off of any portion of the consulting fees under such circumstances.
Section 4. Client’s Duties
(a) Client recognizes the value and usefulness of the Services of RIA Compliance Consultants, Inc. (“RCC”) under this Agreement are dependent upon the accuracy and completeness of the information provided by Client to RCC. Client will provide RCC with all requested information and documents that RCC may reasonably request in order to prepare Client’s documents. RCC will not be responsible for the verification of the information and documentation provided by the Client or Client’s attorney or accountant.
(b) It is Client’s responsibility to fully disclose in advance to RCC all material facts related to Client’s investment advisor. Moreover, it is Client’s duty to review, understand, add, edit and revise if necessary, implement and update any policies, procedures and code of ethics provided or prepared by RCC. Client understands that the template and customized written supervisory policies and procedures and code of ethics provided or prepared by RCC are based generally upon the published investment adviser rules of Securities Regulator but should not be considered as exhaustive, comprehensive or definitive list of Client’s obligations under the investment adviser laws and rules; the template and customized written supervisory policies and procedures and code of ethics provided or prepared by RCC may not necessarily address every topic, policy or procedure that may need to be covered by Client. RCC strongly recommends that Client review all of the specific statutes and regulations of Securities Regulator for an investment adviser. The template and customized written supervisory policies and procedures and code of ethics provided or prepared by RCC are not a substitute for Client fully understanding the applicable investment adviser laws and rules. The written supervisory policies and procedures and code of ethics should be treated by Client as a living and breathing document that should be regularly referred to and updated by Client. In other words, Client should not place its written supervisory policies and procedures and code of ethics on a shelf and let it gather dust. Client understands that due to changes of investment adviser laws and rules, Client’s written supervisory policies and procedures or code of ethics may need to be updated. Client acknowledges that RCC is not responsible under this Agreement for notifying Client of changes to the investment advisor laws and rules, and it will be Client’s duty to update the written supervisory policies and procedures and code of ethics.
(c) Prior to using with a securities regulator, an investment advisory client or the public, Client will thoroughly review all documents prepared by RCC to ensure that such documents are factually accurate and consistent with Client’s actual practices. Client will ensure that all documents have been fully customized to be consistent with Client’s actual business model. Additionally, Client will ensure that proposed documents make full and fair disclosure of all material facts necessary for informed decision making by investors, especially where a possible conflict of interest is involved, irrespective of whether such disclosure is called for by a specific item of a regulatory document. Client understands that by providing any document prepared by RCC to investment advisory clients, securities regulators, and the general public, Client is acknowledging the accuracy of the information contained in all such documents prepared by RCC and used by Client.
(d) Fees paid to RCC will never cover any of the following: client’s expense associated with acquiring a surety bond (if required by the Securities Regulator); the costs of registration, examination, licensing and user fees charged by the applicable Securities Regulators and IARD system; and the fees charged by other professionals, such as an accountant or lawyer, hired by Client.
(e) Client will designate at least one individual at Client’s firm to receive, review, and take action on newsletters and other electronic notices sent by RCC via email or RCC’s client portal. Client acknowledges that such notices will include important information that could require Client’s immediate action. RCC is not responsible for Client’s failure to read, understand, or respond to important notices and communications sent by RCC.
Section 5. Client’s Confidential Information
In carrying out its compliance consulting duties, RCC will acquire information of a confidential nature relating to Client's business activities and its investment advisory clients. Except as provided otherwise under Section 5 of this Agreement, RCC hereby agrees to maintain the confidentiality of Client's information and shall not use, publish, or otherwise disclose any such confidential information pertaining to Client without Client’s express written consent.
RCC recognizes that Client may be subject to the provisions of the Securities and Exchange Commission's Regulation S-P, or other privacy rules promulgated under the Gramm-Leach-Bliley Act (the "GLBA"). RCC represents that it is a nonaffiliated third party service provider that is excepted from the Notice and Opt Out Requirements pursuant to the GLBA.
Client authorizes RCC to disclose, as reasonably necessary, confidential information about Client’s business activities to the applicable securities regulators as part of the investment advisor registration process.
Nothing in this Section will diminish or restrict RCC's right, as later described in this Agreement, to use for the benefit of another party any materials that are the same (except for Client's name, CRD number or associated persons' names) as or similar to the materials prepared by RCC for Client under this Agreement.
Section 6. Non-Exclusive Relationship with RCC
(a) RCC may have other compliance consulting clients that are competitors of Client. RCC may also have compliance consulting clients that have a business alliance, broker-dealer or vendor relationship with Client or Client’s associated persons.
(b) RCC may refer Client to other compliance consulting clients of RCC and other firms such as introducing broker-dealers, third-party asset management platforms and custodians. RCC does not receive compensation from these parties for such referrals; however, these firms periodically refer prospective compliance consulting clients to RCC.
Section 7. Nature of Compliance Consulting Relationship
(a) RCC shall act as an independent contractor.
(b) RCC is a compliance consulting firm. Although RCC has an affiliate that is a law firm and RCC may have an individual on its staff that is also licensed as an attorney offering legal services in a completely separate capacity and through a different entity, RCC is not a law firm or an attorney and does not provide legal services.
(c) In general, a licensed attorney is regulated by his or her state supreme court through the use of rules of professional conduct, minimum education and examination requirements and a disciplinary process. Unlike a client of an attorney, a client of RCC will not receive the advantages of such regulatory oversight since the compliance consultant occupation is not licensed by state government.
(d) A compliance consulting relationship with RCC is not provided those legal and professional protections that normally exist under an attorney-client relationship such as the following:(i) privileged communication between an attorney and client; (ii) the requirement for an attorney to use a client trust account for safekeeping of legal fees paid in advance by a client; (iii) the requirement for an attorney to maintain professional liability insurance; or (iv) prohibitions preventing an attorney from having impermissible relationships with clients, representing other persons with conflicting interests, receiving referral fees from third-party vendors, or prospectively limiting liability for malpractice through a contractual provision in a client agreement.
(e) Unlike an attorney, RCC does not utilize a client trust account for consulting fees paid in advance by a client. Fees paid in advance are deposited into a checking account owned and controlled by RCC, which is a normal business checking account lacking the safeguards associated with an attorney's client trust account. Unlike an attorney, RCC does not maintain professional liability insurance. Unlike an attorney, RCC is utilizing a contractual provision within this Agreement to the limit and the extent of its liability for malpractice so as not to exceed the fees paid to the Client by RCC.
(f) If RCC provides Client with comments regarding an investment advisory client agreement, this does not constitute and should not be deemed as legal advice. Such comments provided by RCC are not a substitute for a review, revision and approval of Client’s investment advisory client agreement by an attorney in Client’s jurisdiction. Client understands that any comments provided by RCC regarding Client’s investment advisory client agreement have not been prepared by an attorney to comply with the laws of Client's local jurisdiction. Client acknowledges that by relying upon comment provided by RCC without local legal counsel's review and approval, Client is undertaking the risk that such sample investment advisory client agreement is not legally enforceable and may fail to best protect Client's interests.
(g) In the event that a securities regulator initiates an enforcement proceeding against Client claiming Client violated applicable law. Client will need to retain legal counsel to represent Client before the securities regulator. Although RCC may serve as an expert resource to Client and Client's legal counsel regarding industry practices, RCC is not a substitute for retaining appropriate legal counsel.
(h) RCC strongly recommends that prior to executing this Agreement, Client should retain an attorney, who is not affiliated with RCC, to review and provide Client with independent advice regarding the terms of this Agreement.
Client's Initials
Section 8. Non-Solicit of RCC Employees
Without the written consent of the president of RCC, during the term of this Agreement and for a period of twelve months after this Agreement's termination, Client and Client's affiliates will not engage in any of the following activities: (1) directly or indirectly solicit, contact, negotiate with, or in any manner attempt to induce any individual, who is currently employed by RCC and personally works or worked with Client while affiliated with RCC, to terminate his or her employment with RCC; nor (2) hire or engage any individual, who is currently employed with RCC and personally worked with Client while at RCC, as an employee or a compliance consultant (outside of an engagement through RCC). Under no circumstances will this section prevent a Client from soliciting or hiring a current or former RCC employee, who is licensed as an attorney, to serve as the Client's attorney.
Section 9. Not Work Made for Hire
(a) RCC shall retain sole ownership of the copyright of all materials prepared by RCC under this Agreement. After removing Client’s name, Client’s CRD number and the names of Client’s associated persons, RCC may use the materials prepared by RCC under this Agreement for parties or investment advisors other than Client without any limitations, restrictions or charges to RCC. Under no circumstances shall any materials prepared by RCC pursuant to the Agreement constitute works made for hire under copyright law. Client will execute any necessary forms or papers that RCC considers necessary to secure RCC’s copyright with no charge to RCC.
(b) RCC shall grant Client a limited, non-exclusive license to use the materials prepared by RCC under this Agreement in the following manner and under only these conditions:
(i) Client may make copies of the materials prepared by RCC under this Agreement if Client preserves RCC’s copyright notice on the copies of such materials;
(ii) Client may provide the above described copies of the materials prepared by RCC under this Agreement to Client’s existing and prospective investment advisory customers, the custodians of investment advisory accounts managed by Client, any broker-dealer with supervisory responsibility of an associated person of Client, a sub-advisor, co-advisor or solicitor subject to a written solicitor arrangement or investment advisor agreement with Client, any attorneys and accountants retained by Client, any securities regulator with jurisdiction over Client, filings for Client’s investment advisor through the Investment Adviser Registration Depository (“IARD”) system and/or as otherwise required by law;
(iii) Client may utilize materials previously prepared by RCC under this Agreement for the purpose of preparing new materials solely for Client’s investment advisor;
(iv) Client may not use or distribute for use the materials prepared by RCC under this Agreement for use or modification by any other investment advisor. Client may not sell the materials prepared by RCC under this Agreement. Client may not prepare new materials for any other investment advisor based upon the materials previously prepared by RCC under this Agreement; and
(v) Client may not transfer, assign or sell this limited, non-exclusive license to a third-party (except for Client's parent, subsidiary, affiliate or successor) without RCC’s written authorization.
Section 10. No Third-Party Beneficiary
This Agreement and the services provided under this Agreement are for the exclusive benefit of Client. The materials prepared under this Agreement are not provided for the benefit of a third-party such as a broker-dealer, custodian, or investment advisor that has a business relationship with Client or an individual or entity who is a recipient of Client’s investment advisory services.
Section 11. Not Intended to Detect Fraud
Client understands that the services provided under this Agreement are not intended to detect or prevent fraud including but not limited to bribery, extortion, identity theft, forgery, misrepresentation, collusion to circumvent internal controls, selling away, ponzi schemes, insider trading, undisclosed outside business activities, inaccurate or false fee calculations, a loan, unauthorized disbursement, theft, embezzlement, misappropriation or unlawful conversion by Client or Client’s owners, directors, officers, employees, investment adviser representatives, custodians, third-party money managers, vendors or outside professionals.
Section 12. Miscellaneous
(a) Counterparts. The parties may execute this Agreement on any number of counterparts, and all of the counterparts taken together shall be deemed to constitute one and the same instrument.
(b) Severability. If any part, term or provision of this Agreement is held to be illegal, in conflict with any law or otherwise invalid, the remaining portion or portions shall be considered severable and not be affected by such determination, and the rights and obligations of the parties shall be construed and enforced as if the Agreement did not contain the particular part, term or provision held to be illegal or invalid.
(c) Force Majeure. In the event either party is unable to perform its obligations under the terms of this Agreement because of acts of God, strikes, equipment or transmission failure or damage reasonably beyond its control, or other causes reasonably beyond its control, such party shall not be liable for damages to the other party resulting from such failure to perform or otherwise from such causes.
(d) Headings. Section and paragraph headings in this Agreement are included for convenience only and are not to be used to construe or interpret this Agreement.
(e) Representation of Signatories. Each of the undersigned expressly warrants and represents that they have full power and authority to sign this Agreement on behalf of the party indicated and that their signature will bind the party indicated to the terms hereof.
Section 13. Acknowledgements, Disclosures, Limitations, Requirements & Terms of Schedules & Addendums
Client has read, understands and agrees to the acknowledgements, disclosures, limitations, requirements, and terms made by RCC to Client within the attached Schedules and Addendums or any RCC revisions of these documents provided to Client.
Section 14. Limitation of Liability
IN NO EVENT WILL RCC’S AGGREGATE LIABILITY TO CLIENT FOR ANY AND ALL CLAIMS RELATING TO THE SERVICES PROVIDED UNDER THIS AGREEMENT, WHETHER IN CONTRACT, TORT OR ANY OTHER THEORY OF LIABILITY, EXCEED THE FEES PAID BY CLIENT FOR THE SERVICES PROVIDED UNDER THIS AGREEMENT.
Section 15. Client Should Independently Evaluate Whether to Hire RCC
Client understands that the determination to use a third-party compliance services provider is an important decision and should not be based solely upon advertisements or self-proclaimed expertise. RCC has not been certified by an agency or board as a specialist or expert in investment advisor compliance. Client acknowledges that RCC recommended that Client conduct an independent investigation and evaluation of RCC prior to executing this Agreement.
The determination to use a third-party compliance services provider is an important decision and should not be based solely upon advertisements or self-proclaimed expertise. A description or indication of limitation of RCC’s compliance services does not mean that an agency or board has certified RIA Compliance Consultants, Inc. as a specialist or expert in investment advisor compliance. All potential clients are urged to make their own independent investigation and evaluation of RIA Compliance Consultants, Inc.
The parties hereto agree to the above terms and have caused this Agreement to be executed in their names and on their behalf by and through their duly authorized persons.
RIA Compliance Consultants, Inc.Schedule 1 – Disclosures to Client & Compliance Service Limits
The following are important disclosures and limitations related to the service provided by RIA Compliance Consultants, Inc. (“RCC”) and acknowledgements by Client under this Agreement.
Client acknowledges that certain solicitor activities on behalf of a private fund and/or private fund manager may constitute acting as a broker-dealer under the Securities Exchange Act of 1934 as amended depending upon the facts. Client further acknowledges such analysis and advice regarding this issue is outside the scope of the Compliance Services under this Agreement, and to the extent that Client provides solicitor services to a private fund or utilizes solicitors for a private fund, Client agrees to retain legal counsel to provide advice to Client regarding the broker-dealer registration requirements.
Client understands that if Client provides investment advisory services through an investment adviser representative who is also an insurance agent and/or registered representative of a broker-dealer and such investment adviser representative discusses advisory, broker-dealer and insurance services and products in combined fashion at a single meeting (depending upon the facts and circumstances), there is a risk that an investment advisory client or a securities regulator may try to hold Client and/or such investment adviser representative as a fiduciary as it relates to these other non-advisory capacities (e.g., insurance, broker-dealer). Client acknowledges that the services of RCC do not include providing compliance advice as to Client about how to provide such non-advisory services or products in accordance with any fiduciary duty or applicable standard of care.
RCC will not be responsible for the verification of the information and documentation provided by Client. RCC will not be responsible for verifying the accuracy or truthfulness of any information, document or statements provided by the owners, directors, officers, employees, investment adviser representatives, custodians, third-party money managers, vendors or outside professionals (such as attorneys and accountants) of Client. RCC will not be responsible for verifying statements in the Form ADV are accurate and truthful. Client will be solely responsible for verify the accuracy and truthfulness of all documents prepared by RCC on Client’s behalf.
Client acknowledges that Client is solely responsible for both (a) identifying and bringing to RCC’s attention Client’s business practices and outside business activities which are in conflict with an investment advisory client’s interest and/or Client’s fiduciary duty and (b) then verifying that any such conflicts have been eliminated or disclosed and mitigated and that Client is meeting its fiduciary duty. RCC offers no assurances that RCC will identify revenue streams, business practices, arrangements and/or outside business activities which are in conflict with an investment advisory client’s interest or otherwise a breach of Client’s fiduciary duty; moreover, due to the nature of a consulting relationship, RCC anticipates that depending upon the circumstances, there will be some conflicts of interest and/or breaches of fiduciary duty which RCC does not identify to Client. RCC is not a substitute for Client and Client’s directors, officers, managers, employees and representatives from regularly and carefully reviewing Client and its affiliate’s sources of revenue, business practices, arrangements and outside business activities for purposes of identifying conflicts of interest and breaches of fiduciary duty.
Client understands that RCC does not serve as a supervisory principal, the compliance department or the chief compliance officer of Client. Client’s compliance with applicable laws and rules for an investment adviser is not being outsourced to RCC under this Agreement. In order to meet Client’s regulatory obligations, Client’s executive officers and staff must devote significant time and focus to compliance each week and be actively involved in Client’s compliance program. Client’s executive officers and staff are solely responsible under this Agreement for whether Client is meeting its regulatory obligations.
Furthermore, Client acknowledges that Client as an investment adviser has a fiduciary duty to eliminate conflicts of interest and prevent an investment adviser from taking unfair advantages of a client. If a policy or practice, internal or external business relationship/arrangement or outside business activity creates a conflict of interest, Client is fully aware that Client must make full and fair disclosure of all material facts and mitigate the conflict of interest, and Client must act in client’s best interest at all times.
Client acknowledges that regulatory focus and priorities change over time and whether a securities regulator views a conflict of interest as especially problematic for an investment adviser can change from year to year. Likewise, a securities regulator’s expectation of acceptable disclosures/mitigations by an investment adviser also can change from time to time. Due to this ever changing environment, Client should regularly review and re-review its business practices for conflicts of interest on a regular basis in light of the most recent regulatory developments.
Although RCC may assist Client with identifying conflicts of interest, RCC does not take responsibility for identifying, disclosing and mitigating conflicts of interest. Regardless of any assistance or advice provided by RCC, Client is solely responsible for identifying conflicts of interest and disclosing/mitigating such conflicts and correspondingly re-reviewing its policies/practices, business relationships/arrangements and outside business activities for conflicts of interest.
RCC strongly recommends that Client make every attempt to avoid and prohibit any internal policy, procedure or practice, internal or external business relationship/arrangement with an affiliate or third-party or outside business activity of supervised persons which creates a conflict of interest. Client acknowledges that it is solely Client's responsibility to identify and determine whether to avoid/prohibit a particular conflict of interest. To the extent Client does not avoid/prohibit the policy, procedure, practice, relationship/arrangement or outside business activity creating the conflict of interest, Client acknowledges that an investment adviser firm must explicitly disclose, in writing, all conflicts of interest using robust and reasonable disclosure language that the investment adviser firm's investment advisory clients will fully and sufficiently understand in a clear and concise manner, and Client must also disclose its policies and procedures to control for and mitigate the conflicts of interest so Client is able to evidence that it is acting in the investment advisory client's best interest. Any assistance or advice provided by RCC regarding the identification of a conflict of interest, the drafting of disclosure language/mitigation procedures of a conflict, or the assessing/testing of such disclosure/mitigation of a conflict is not a recommendation, endorsement or safe harbor by RCC that Client should engage in such conflict of interest. RCC offers no assurance that any advice, draft language or procedure or assessment/test provided by RCC with respect to a conflict of interest will be effective and meet the expectations of a securities regulator. In the opinion of RCC, the most prudent practice is for Client to avoid and prohibit any policy/procedure, internal or external business relationship/arrangement with affiliates or third-parties or outside business activity which creates a conflict of interest.
RIA COMPLIANCE CONSULTANTS, INC.MINIMUM FIXED FEE SCHEDULE
Annual Compliance Program Packages
To the extent that Client is currently subscribed to a standard (non-customized) Annual Compliance Program package of RCC, the following is the monthly rate for the packages listed below which will be effective upon the renewal date of the Annual Compliance Program:
Sample Forms
To the extent that Client requests a sample form available on RCC’s Online Store for Compliance Tools and Services or requests RCC customize such a sample form, RCC may charge Client the current published price for the sample form (if not available to Client under Client’s current annual compliance program subscription) plus the additional hourly work by RCC’s staff to discuss such form with Client and customize the sample form to Client’s specifications and/or requirements.
Hourly Rates
To the extent that Client is subject to an hourly fee arrangement or has exceed budgeted consulting hours (or is outside the scope of services) under a fixed fee arrangement and is currently subject to an hourly fee arrangement with RIA Compliance Consultants, Inc. (“RCC”), the following are the current hourly rates of RCC’s staff:
Tasks/Activities Subject to Minimum Fixed Fee
To the extent that Client is subject to an hourly fee arrangement or has exceed budgeted consulting hours (or is outside the scope of services) under a fixed fee arrangement and is currently subject to an hourly fee arrangement with RCC and RCC performs a task/activity or set of tasks/activities listed below on the Minimum Fixed Fee Schedule, Client will be charged the greater of the hourly fees incurred using the current hourly rates or the minimum fixed fee listed below on the Minimum Fixed Fee Schedule. RCC reserves the right to add, change and delete the tasks/activities and corresponding fees of the Minimum Fixed Fee Schedule effective immediately upon RCC giving client notice of applicable additions, changes or deletions.
Investment Adviser Representative Documents
Advertising
Other Registration Documents & Filings
Schedule for Sample Forms Disclosures & Limitations
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The parties hereto agree to the above terms and have caused this Agreement, including all attached Exhibits, Schedules and/or Addendums, to be executed in their names and on their behalf by and through their duly authorized persons.
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Signed by Bryan Hill Signed On: 02/01/2022
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Document Name: WSP/COE Manual (SEC REGISTERED – REGULATOR SPECIFIC, CUSTOMIZED OPTION) (F4)
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