Managed Account Service Agreement
Last updated: 12/10/2020
By entering into this Agreement, you agree to be bound by the terms and conditions set forth herein, including the Pre-Dispute Arbitration, class action waiver, and jury trial waiver provided in Section 11.
1. Description of Services. ProNvest provides advice, account management, and related services to clients regarding Employer Sponsored Retirement Account (“ESRA”) and Individual Retirement Account(s) (“IRA”) (each, an “Account” and collectively, the “Accounts”). ProNvest will arrange for an unaffiliated investment adviser (“Independent Adviser”) registered with the SEC under the Advisers Act to provide the investment advice described herein with respect to the securities available for Client’s Accounts. ProNvest may, from time to time, change the Independent Adviser without advance notification to or approval by Client. The name of and information about the current Independent Adviser is available upon request.
The Independent Adviser will make and, from time to time, update or rebalance a recommended asset allocation for Client’s Accounts based on: (i) several model strategies developed and maintained by the Independent Adviser; and (ii) personal and financial information that Client provides via a web-based retirement planner (“Retirement Planning Portal”), except that the Independent Adviser will not provide advice about investment of Client’s Accounts in any company stock investments made available under a retirement plan. Should Client fail to complete the account setup or provide the required information within the Retirement Planning Portal within thirty (30) days after entering into this Agreement, the Independent Adviser shall implement the following strategy alternatives: (i) the strategy alternative recommended under the Retirement Planning Portal on the basis of Client information made available to ProNvest from the records of the Accounts, or, if such information is insufficient to formulate such a recommendation, (ii) you will be invested in a moderate strategy based upon your age. A portfolio description for the designated managed Account describing the investment objectives, risk and return characteristics, and fees and expenses is available within the Retirement Planning Portal.
ProNvest will purchase and sell assets for Client’s Accounts on a discretionary basis and based on the personal and financial information you provide to us and the Independent Advisor’s recommended asset allocation and fund selection as described above. “Discretionary” asset allocation means assets will be bought and sold for your Account without your approval of each trade. ProNvest will communicate (i) without change, the Independent Adviser’s recommended asset allocation and fund selection to you and (ii) purchase and sell instructions to the plan platform provider or independent custodian, as applicable, regarding specific securities for each asset class based on the recommended asset allocation and fund selection. Client understands and acknowledges that the Independent Adviser may recommend and ProNvest may communicate investment advice to other clients that differs from the investment advice communicated to Client. Your assets shall be held by an independent custodian and ProNvest will not accept possession of any assets in your Account. Your investment portfolio will be rebalanced to the target asset allocation at least once per quarter.
You have access to our team of professional retirement counselors and other investment and retirement planning resources, including our GAP analysis tools, account and market data, and support for your outside accounts.
2. Limited Power of Attorney. You appoint ProNvest to provide discretionary Account management and act as your agent and attorney-in-fact with limited power and authority to act for and on behalf of you to buy, sell, and otherwise effect investment transactions in the name of your Account, without an obligation for ProNvest to first consult with or to notify you. With respect to IRAs, ProNvest is further authorized, upon Client’s request or instruction, to deposit funds and assets into the Account, withdraw funds or assets from the Account, initiate rollovers or other transfers of assets between accounts. No cash or securities or any property will be paid or delivered to ProNvest, except fees as provided in Section 5. This Limited Power of Attorney will continue until this Agreement is terminated as provided in Section 6 or ProNvest has actual receipt of notice of Client’s death or judicially determined incompetence.
4. Your Responsibilities. ProNvest relies on the information you submit to us in order to provide you with our Services. You are solely responsible for: (i) providing true, accurate, and complete information; (ii) notifying us of any material change in your information or circumstance that might affect the manner in which your account should be invested (whether financial circumstance, investment objective, risk tolerance, or otherwise); (iii) notifying us immediately if you have knowledge of or suspect any unauthorized use of your information.
You are further responsible for determining the suitability of your investments and strategies. You understand that the Services are not a substitute for seeking more specific or personalized advice regarding the investments and strategy appropriate for your risk tolerance, financial circumstances, and objectives. You agree that all personal and financial information that you provide to ProNvest is true and correct and may be relied upon by ProNvest and the Independent Adviser in providing services under this Agreement.
You understand and acknowledge that withdrawing amounts from your Account may impair achievement of your investment objectives. You agree to promptly notify ProNvest of any withdrawals you make from your Account. ProNvest and the Independent Adviser will have no duty, obligation, or right to advise with respect to or inquire about any such withdrawals.
5. Fees. For its Services under this Agreement, ProNvest will charge fees quarterly based on the fair market value of the securities in the Client’s Account on the last business day of the quarter as follows: (i) up to .3125% for an ESRA; and (ii) 0.125% for an IRA. With respect to the quarter in which you first enter into this Agreement, the fee will be pro-rated based on the date that your Account is first managed by ProNvest. You will receive a notice showing the amount of the fee assessed for each applicable period. You hereby authorize the Plan platform provider or independent custodian, as applicable, to deduct from your Account the fee for each period as calculated by ProNvest and remit it to ProNvest. You acknowledge that you may be required to pay and/or your Account may be charged other fees, such as brokerage and custodial fees, which are in addition to those charged under this Agreement. ProNvest will be responsible for compensating the Independent Adviser; you will not be required to pay any additional fees to the Independent Adviser.
7. No Other Responsibilities. ProNvest and the Independent Adviser have no responsibility with respect to your Account other than those expressly stated in this Agreement, and in particular have no responsibility with respect to the selection of the securities made available by a plan sponsor for investment by your Account, or the voting of proxies for or determination on any other legal matter with respect to the securities in which your Account is or was invested. Securities in your Account will be held by the retirement plan trustee or custodian or, in the case of insurance contracts, the issuer of those contracts. The Plan platform provider or independent custodian, as applicable, will provide you with periodic statements that set forth the securities and cash positions in your Account and the transactions in your Account during the applicable period.
8. Acknowledgement of Costs and Risks. ALL INVESTMENTS INVOLVE RISKS, INCLUDINGBUSINESS, ECONOMIC, MARKET, POLITICAL, AND GEOPOLITICAL RISKS. PAST PERFORMANCE IS NOT INDICATIVE OFFUTURE SUCCESS. YOUR ACCOUNT MAY LOSE MONEY, INCLUDING PRINCIPAL, AND YOURINVESTMENTS WILL FLUCTUATE DEPENDING ON MARKET CONDITIONS.
ALL INVESTMENTS INVOLVE RISKS, INCLUDINGBUSINESS, ECONOMIC, MARKET, POLITICAL, AND GEOPOLITICAL RISKS. PAST PERFORMANCE IS NOT INDICATIVE OFFUTURE SUCCESS. YOUR ACCOUNT MAY LOSE MONEY, INCLUDING PRINCIPAL, AND YOURINVESTMENTS WILL FLUCTUATE DEPENDING ON MARKET CONDITIONS.
YOU ACKNOWLEDGE THE INVESTMENT APPROACH, RISK FACTORS, ANDFEES AND COSTS ASSOCIATED WITH THE INVESTMENT OF THE SECURITIES IN YOUR ACCOUNTAND THAT YOUR INVESTMENTS MAY DECLINE IN VALUE.
9. Limitation of Liability. To the fullest extent permitted by state and federal securities laws and regulations or the Employee Retirement Income Security Act of 1974 (“ERISA”), as applicable, and excepting our negligence, willful misconduct, or violation of applicable law, you agree that ProNvest, the Independent Adviser, and their respective directors, officers, stockholders, employees, and agents will not be liable for any act, omission, or error of judgment with respect to the Services, including but not limited to any loss in market value of the securities in your Account resulting from ProNvest’s or the Independent Adviser services hereunder, whether due to error of judgment or otherwise. Federal and state securities laws and ERISA impose liabilities under certain circumstances on persons who act in good faith and nothing herein shall constitute a waiver or limitation of your rights under federal or state securities laws or ERISA.
10. Indemnification. You agree to indemnify, defend, and hold ProNvest and its affiliates, officers, directors, agents, licensors, and employees harmless from any liability, loss, cost, claim, and expense, including attorney’s fees, related to or arising from your use of the Service, including but not limited to your: (i) failure to provide true and accurate information or to update such information; (ii) violation of this Agreement; (iii) violation of applicable law or regulation; or (iv) violation of the rights of a third party. Notwithstanding the foregoing, this Section 10 will not affect your non-waivable statutory rights.
11. PRE-DISPUTE ARBITRATION AND CLASS ACTIONWAIVER.
BY ENTERING INTO THIS AGREEMENT, YOU AND PRONVEST ARE GIVING UP THE RIGHT TO: (I) SUE EACH OTHER IN COURT, INCLUDING THE RIGHT TO A TRIAL BY JURY, AND (II) LITIGATE ON A CLASS BASIS, WHETHER CLASS ARBITRATION, CLASS ACTION, OR ANY OTHER TYPE OF REPRESENTATIVE PROCEEDING.
YOU AGREE TO RESOLVE BY BINDING ARBITRATION ANY DISPUTE, CLAIM, OR CONTROVERSY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE BREACH, PERFORMANCE, TERMINATION, ENFORCEMENT, INTERPRETATION, OR VALIDITY THEREOF, INCLUDING THE SCOPE OR APPLICABILITY OF THIS AGREEMENT TO ARBITRATE.
ANY ARBITRATION SHALL BE CONDUCTED BEFORE JUDICIAL ARBITRATION AND MEDIATION SERVICES (“JAMS”) PURSUANT TO ITS COMPREHENSIVE ARBITRATION RULES AND PROCEDURES. YOU AGREE THAT ANY ARBITRATION HEARING WILL BE HELD IN HAMILTON COUNTY, TENNESSEE, AND APPLY THE SUBSTANTIVE LAW OF TENNESSEE TO ALL STATE LAW CLAIMS. YOU AGREE TO THE PERSONAL JURISDICTION OF THE COURTS LOCATED IN HAMILTON COUNTY, TENNESSEE TO INTERPRET AND ENFORCE THESE ARBITRATION PROVISIONS. DISPUTES WILL NOT BE RESOLVED IN ANY OTHER FORUM OR VENUE.
ANY ARBITRATION WILL BE CONDUCTED BY A RETIRED JUDGE WHO IS EXPERIENCED IN RESOLVING DISPUTES REGARDING THE SECURITIES INDUSTRY. PRE-ARBITRATION DISCOVERY WILL BE LIMITED TO THE GREATEST EXTENT ALLOWED BY THE JAMS RULES. ANY ARBITRATION AWARD WILL NOT INCLUDE FACTUAL FINDINGS, CONCLUSIONS OF LAW, OR OTHER WRITTEN EXPLANATION OF REASONS FOR THE AWARD. THE ARBITRATOR MAY NOT AWARD CONSEQUENTIAL OR PUNITIVE DAMAGES (UNLESS AND ONLY TO THE EXTENT SUCH DAMAGES ARE STATUTORILY REQUIRED TO BE AN AVAILABLE REMEDY FOR AN ASSERTED CLAIM). THE ARBITRATOR SHALL ALLOCATE THE COSTS OF ARBITRATION IN THE AWARD, INCLUDING ARBITRATOR FEES AND REASONABLE ATTORNEYS’ FEES OF THE PREVAILING PARTY. ANY AWARD BY THE ARBITRATOR WILL BE FINAL AND BINDING.
YOU UNDERSTAND THAT STATE AND FEDERAL LAW LIMITS YOUR RIGHT TO APPEAL OR SEEK MODIFICATION OF AN AWARD OR RULING BY THE ARBITRATOR. STATE AND FEDERAL STATUTES OF LIMITATION, REPOSE, OR OTHER LAWS AND REGULATIONS MAY PROVIDE A TIME LIMIT IN WHICH YOU MUST BRING A CLAIM, AND YOU AGREE THAT THESE TIME LIMITS WILL APPLY TO ANY ARBITRATION PROCEEDING BROUGHT UNDER THIS AGREEMENT TO THE SAME EXTENT SUCH TIME LIMITS WOULD BE BARRED IF BROUGHT IN A STATE OR FEDERAL COURT.
THIS ARBITRATION PROVISION WILL BE INTERPRETED AND ENFORCED IN ACCORDANCE WITH APPLICABLE FEDERAL LAW, INCLUDING THE FEDERAL ARBITRATION ACT (FAA).
12. No Legal or Tax Advice; Legal Status. ProNvest does not provide legal, tax, or accounting advice. It is your responsibility to seek advice regarding your individual financial circumstances from an attorney, accountant, advisor, or other relevant professional. ProNvest and the Independent Adviser each is an investment adviser registered with the Securities and Exchange Commission under the Advisers Act. To the extent a retirement plan is subject to ERISA or Section 4975 of the Internal Revenue Code: (i) ProNvest acknowledges that it is a fiduciary with respect to the appointment of the Independent Adviser under this Agreement; and (ii) the Independent Adviser acknowledges that it is a fiduciary with respect to the investment advice it provides under this Agreement. Recommendations will be implemented pursuant to advice provided by the Independent Adviser and not as a result of ProNvest’s exercise of discretionary authority, control, or responsibility. You understand that the relationship between ProNvest and the Independent Adviser is that of independent contractors. The parties hereto agree that the Independent Adviser is a third-party beneficiary of this Agreement, and that their agreements hereunder in respect of the Independent Adviser are binding on and legally enforceable by the Independent Adviser against you.
13. Form ADV. You acknowledge receipt of Part 2 and Part 3 of ProNvest’s Form ADV located on our website, here. Upon execution of this Agreement, ProNvest’s ADV Brochure and Client Relationship Summary will also be provided in electronic format through your Retirement Planning Portal account. You may request these documents in written form at any time.
14. Electronic Communication Consent; Electronic Signatures. To the greatest extent allowed by law, you consent to receive all communications and notices electronically via the email address you provide to ProNvest. You may request a paper copy of any electronic communication by contacting us at 1-866-738-5125. We reserve the right to charge a reasonable fee for producing and mailing the paper version(s). You may also withdraw your consent to receive electronic communications at any time by contacting us at the phone number listed above. You understand that withdrawing your consent could result in your access to certain of our services being restricted or terminated.
You agree that your electronic signature, including but not limited to the use of a mouse, keypad, or other electronic device to select any icon, item, or button, constitutes your signature and is the legal equivalent of your manual signature on this Agreement. Your intentional action in electronically accepting the terms of this Agreement and use of the Services are valid evidence of your consent to be legally bound by this Agreement. The use of an electronic version of these documents fully satisfies any requirement that they be provided to you in writing. You may contact us to obtain a record of the documents that you electronically accept through https://www.pronvest.com.
(a) Notice to Client. All communications we send to your email address registered with ProNvest will be deemed as delivered and will constitute proper and effective notice. You agree that all notices, agreements, disclosures, documents, statements, data, records, and other communications that we provide to you electronically satisfy the same legal requirements that would be satisfied if such were provided in a hardcopy form. It is your responsibility to provide us with your correct email address and to update your email address when necessary.
(b) Notice to ProNvest. Notice to ProNvest must be sent through a nationally recognized carrier via overnight delivery or first-class postage prepaid mail to: ProNvest, Inc., Attn: Compliance, 1110 Market Street, Suite 402, Chattanooga, TN 37402.
16. Governing Law. This Agreement will be deemed to have been made in the State of Tennessee and to the maximum extent allowed by law, and in compliance with the Advisers Act, will be governed by the laws of the State of Tennessee, without reference to principles of conflicts or choice of laws.
17. Severability. If any provision of this Agreement is held invalid or unenforceable by reason of any law, rule, order, or judicial decision, such determination will have no effect on the validity of the remaining provisions of this Agreement.
18. No Waiver. No provision of this Agreement will be deemed waived, altered, modified, or amended unless agreed to in writing by ProNvest.
19. Amendment. This Agreement sets forth the entire understanding of the parties hereto with respect to the services to be provided to you by ProNvest. Any and all previous agreements and understandings between us and you regarding the subject matter of this Agreement, whether written or oral, are superseded by this Agreement. ProNvest may amend this Agreement by providing you with thirty (30) days’ advance notice.
20. Assignment. ProNvest may assign its interests in this Agreement to a successor in interest to substantially all of its business or an affiliated company without your consent, provided that: (i) the proposed assignee agrees in writing to assume all of the assigning party’s obligations and a copy of the written assumption agreement is forwarded to the non-assigning party; (ii) the assigning party promptly notifies the non-assigning party of such assignment; and (iii) such assignment is consistent with the Advisers Act.
BY ELECTRONICALLY SIGNING THIS DOCUMENT, YOU REPRESENT THAT YOU ARE AUTHORIZED TO ENTER INTO THIS AGREEMENT AND YOU CONSENT TO BE LEGALLY BOUND BY THE TERMS AND CONDITIONS HEREIN.