Wealth Management Services Disclosure Booklet (Version 1.8)

Transcription

1 Wealth Management Services Disclosure Booklet (Version 1.8) This Booklet contains important information about the Wealth Management Services Advisor Select, Fund Select/Fund Select Premier and Manager Select Premier programs and related information that should be read carefully. Note: not all programs may be available through all representatives. FOR AN ADVISOR SELECT PROGRAM ACCOUNT, PLEASE READ THE FOLLOWING SECTIONS: Brokerage Account Agreement Advisor Select Investment Management Agreement Advisor Select Program Wrap Fee Brochure MetLife Bank, NA FDIC-Insured Money Market Sweep Feature For Your Account MetLife Privacy Notice Opting Out of Information Sharing MetLife Business Continuity Plan Disclosure Mutual Fund, Alternative Investment and Variable Life and Annuity Product Marketing and Compensation Arrangements Mutual Fund Ticket Charge Program Disclosure Third Party Research Reports FOR A FUND SELECT/FUND SELECT PREMIER PROGRAM ACCOUNT, PLEASE READ THE FOLLOWING SECTIONS: Brokerage Account Agreement Fund Select/Fund Select Premier Investment Management Agreement... 6 Fund Select/Fund Select Premier Programs Disclosure Brochure Lockwood Advisors, Inc. Wrap Fee Program Disclosure Brochure MetLife Bank, NA FDIC-Insured Money Market Sweep Feature For Your Account MetLife Privacy Notice Opting Out of Information Sharing MetLife Business Continuity Plan Disclosure Mutual Fund, Alternative Investment and Variable Life and Annuity Product Marketing and Compensation Arrangements Mutual Fund Ticket Charge Program Disclosure Third Party Research Reports FOR A MANAGER SELECT PREMIER PROGRAM ACCOUNT, PLEASE READ THE FOLLOWING SECTIONS: Brokerage Account Agreement Manager Select Premier Investment Management Agreement Manager Select Premier Wrap Fee Brochure Lockwood Advisors, Inc. Wrap Fee Program Disclosure Brochure MetLife Bank, NA FDIC-Insured Money Market Sweep Feature For Your Account MetLife Privacy Notice Opting Out of Information Sharing MetLife Business Continuity Plan Disclosure Mutual Fund, Alternative Investment and Variable Life and Annuity Product Marketing and Compensation Arrangements Mutual Fund Ticket Charge Program Disclosure Third Party Research Reports MBD%0%247%0%118%L WMSNESDISCBOOK (Updated 03/11)

2 Brokerage Account Agreement This Brokerage Account Agreement ( Brokerage Account Agreement ) between the client(s), who has executed the Wealth Management Services Investment Account Application and Agreement ( IAAA ) (hereafter referred to as I or me ), and New England Securities Corp. ( NES ) sets forth the terms and conditions governing the brokerage account for which I am seeking to open for the purpose of participating in the Wealth Management Services Program that I have selected in the IAAA ( WMS Program ). As used herein, I, me, or my shall include every person or entity signing the IAAA. You shall include the broker, bank, or other financial institution which opened or provides services for my account. 1. IAAA By executing the IAAA, I represent, warrant, and agree as follows: (i) The terms and conditions found in this Brokerage Account Agreement are incorporated in the IAAA; (ii) I have received, read, understand and agree to the terms of the Brokerage Account Agreement,including the pre-dispute arbitration provisions set forth in Section 27 hereunder; (iii) Upon your acceptance of the IAAA, an account will be opened for me at NES and maintained and cleared by Pershing LLC (the Custodian or Pershing ) to buy and sell securities according to my instructions (or if I am participating in the Advisor Select WMS Program ( Advisor Select ) and have granted trading authority to NES, then trades will be executed by an investment adviser representative of NES ( IAR ) according to the terms of the Advisor Select Program Investment Management Agreement), which account will be governed by the terms of the IAAA, the Investment Management Agreement for the WMS program selected by me in the IAAA (IMA), this Brokerage Account Agreement and any other applicable agreements and disclosures between you and me (collectively the WMS Agreements ), and I agree to abide by the terms of the WMS Agreements, in each case as amended from time to time. 2. ACCOUNT APPROVALS AND MAINTENANCE I understand that NES may reject my IAAA, decline to process my application to purchase a Third Party Product, or not open a brokerage account, restrict trading, disbursements, transfers or take no actions in my account for any reason in its sole and absolute discretion without disclosing the details of the decision. NES may require that I provide additional information or documentation in order for NES to continue to carry my brokerage account, maintain a business relationship with me or effect certain transactions for my account. 3. PROVISIONS IN THE EVENT OF FAILURE TO PAY OR DELIVER Whenever I do not, on or before the settlement date, pay in full for any security purchased, or deliver any security sold for my account, you are authorized (subject to the provisions of any applicable statute, rule or regulation), (a) until payment or delivery is made in full, to pledge, re-pledge, hypothecate or rehypothecate, without notice, any or all securities which you may hold (either individually or jointly with others), separately or in common with other securities or commodities or any other property, for the sum then due or for a greater or lesser sum and without retaining in your possession and control for delivery a like amount of similar securities, and/or (b) to sell any or all securities which you may hold (either individually or jointly with others), or to buy in any or all securities required to make delivery for the account of the undersigned, or to cancel any or all outstanding orders or commitments for my/our account. 4. CANCELLATION PROVISIONS You are authorized, in your discretion, should I die or should you for any reason whatever deem it necessary for your protection, without notice, to cancel any outstanding orders to close out my accounts, in whole or in part, or to close out any commitment made on my behalf. 5. CHOICE OF MARKETPLACE Any sale, purchase or cancellation may be made according to your judgment and at your discretion on the exchange or other market where such business is then usually transacted, or at public auction, or at private sale without advertising the same and without any notice, prior tender, demand or call, and you may purchase the whole or any part of such securities free from any right of redemption, and I shall remain liable for any deficiency. All transactions through NES and Pershing, LLC are subject to the constitution, rules, regulations, customs, and usages of the exchange, market or clearinghouse where executed, as well as to any applicable federal or state laws, rules and regulations. It is further understood that any notice, prior tender, demand or call from you shall not be considered a waiver of any provision of this agreement. 1

3 6. FEES AND CHARGES I acknowledge and agree that my account may be subject to certain service and incidental fees and charges disclosed in the Schedule H Disclosure Brochure. I acknowledge that you may change the fee schedule from time to time. I understand that mutual fund compensation is disclosed in the fund s prospectus. I agree that you may sell any securities or redeem shares of mutual funds held in my account as necessary to pay any fees or charges or other debits in my account in accordance with the IMA for my WMS Program. You agree that, to the extent available, shares in a money market fund (including any money market sweep account) will be redeemed first. 7. ORDERS AND STATEMENTS Reports of the execution of orders and statements for my account shall be conclusive if not objected to in writing, the former within five days and the latter within ten days, after forwarding by you to me by mail or otherwise. 8. AUTHORITY FOR ACCOUNT If this is an individual account, I represent that I am of legal age in the state in which I reside and am not associated or employed with any securities exchange or a subsidiary of an exchange, or of a member firm of any exchange or FINRA, unless I have notified you to that effect. I agree to notify you promptly if I become so associated or employed. If this is a corporate account, I represent that the execution of this Agreement, any investments that I make in this account and any instructions that I give you pertaining to this account have been authorized by appropriate corporate actions. I further represent that I have been authorized by appropriate corporate actions to act on behalf of the corporation in giving you instructions, including distribution requests, pertaining to, and in effecting transactions in, the account. If there are other corporate officers who signed the IAA&C or are authorized to take action on the account or to give you instructions, I represent that I am authorized to act individually and bind the corporation without further authorization from any other corporate officers, unless you have received written instructions otherwise. If this is a partnership account, I represent that the execution of this Agreement, any investments that I make on behalf of the partnership, and any instructions that I give you pertaining to this account have been authorized by the relevant partners, and my actions are fully binding on all the partners. If this is a fiduciary or trust account, I understand that you do not review any action or inaction of a fiduciary (including, but not limited to a UTMA or UGMA custodian, a trustee, a conservator, a guardian, a personal representative, an administrator, an executor, an attorney-in-fact or an investment adviser). I also understand that you are not responsible for determining the validity of a person s or entity s status or capacity to serve as a fiduciary or whether a fiduciary s action or inaction satisfies the standard of care applicable to such fiduciary s handling of account. By opening a fiduciary or trust account, I represent that the account and the investments that I make therein are within the scope of my fiduciary authority under the agreement that created the trust or fiduciary relationship. You may, at your sole discretion, request additional documentation before I am approved to open the account or take any actions on the account, but you may rely on the representations that I have made herein as the basis for any action that I take regarding this account. If there are co-trustees or co-fiduciaries, I represent that I am authorized to act on behalf of and to bind the trust or the grantor individually without further consent of the other trustees or fiduciaries. Furthermore, you are entitled to treat as authorized and act upon any instructions given by any co-trustees or cofiduciaries that you may be aware of relating to this account. I agree to notify you in writing of any event that might affect my authority or the validity of this Agreement. I also agree to indemnify and hold you and your affiliates harmless from and against any losses arising out of, or relating to the representations that I have made and any of my act, error or omission. 9. SUCCESSORS This agreement and its provisions shall be continuous, and shall inure to the benefit of your present organization, and any successor organization or assigns, and shall be binding upon me/ us and/or my/our estate(s), executor(s), administrator(s) and assign(s). 10. FORCE MAJEURE Neither you nor I shall be liable for any losses caused directly or indirectly by government restrictions, exchange or market rulings, suspension of trading, war, natural disasters, strikes, or other conditions beyond the control of that party, including, but not limited to, extreme market volatility or trading volumes, or other conditions beyond the control of that party. 11. JOINT ACCOUNTS If this is a joint account, I/me refers to all account holders, and each account holder agrees unless we notify you otherwise and provide such documentation as you require, that the brokerage account(s) shall be held by us jointly with rights of survivorship (payable to either or the survivor of us). Each joint tenant irrevocably appoints the other as attorney-in-fact to take all action on his or her behalf and to represent him or her in all respects in connection with this Agreement. You shall be fully protected in acting, but shall not be required to act upon the instructions of either of us. Notice sent to any of the joint account holders sent to the current address on file in your office shall be deemed to have been sent to each of us. Each of us shall be liable, jointly and individually, for any amounts due to you pursuant to this Agreement, whether incurred by either or both of us. I understand that laws governing joint ownership vary from state to state and I understand that I am responsible for verifying that joint registration is valid in my state. 12. TENANTS IN COMMON Each account holder may act on behalf of the other owner for the entire account and may give you transactional instructions without limitations. However, you may, in your sole discretion, 2

4 require the written consent of all account holders. Upon the death of one account holder, the survivor may provide transactional instructions to you for the entire account. No distributions or transfers will be permitted from the account until instructions are received from both owners in writing, their legal successors, or a court of competent jurisdiction. 13. ADDRESS Communications may be sent to me at my current address on file at your office, or at such other address as I may hereafter give you in writing. All communications so sent, whether by mail, messenger or otherwise, shall be deemed given to me personally, whether actually received or not. I agree that all change of address verification letters that I may receive from you shall be deemed accurate if you were not notified of any errors by me within a reasonable time. 14. RECORDING CONVERSATION I understand and agree that you may electronically record any of our telephone conversations. 15. PAYMENT FOR ORDER FLOW PRACTICES NES may receive compensation for directing OTC equity order flow to selected market makers. Compensation received is in the form of per share cash payment. NES directly or through its clearing broker-dealer, has selected certain market makers to provide execution of OTC securities transactions at or better than the national best bid or offer. NES, through its clearing brokerdealer, also uses the services of an OTC Third Market Maker for certain listed equity orders and receives compensation in the form of per share cash payment. All market makers which execute for NES are selected based on the quality of prior executions and attempts at price improvement or opportunities for price improvement discerned from regular reviews of these executions by NES s clearing broker-dealer s trading department and by NES. 16. COMPLAINTS In the event the undersigned has a complaint, contact Client Relations, P.O. Box 789, Johnstown, PA 15904, or call (800) FINRA PUBLIC DISCLOSURE PROGRAM FINRA has developed the Public Disclosure Program for investors and others to gain convenient access to information about their registered representative. To obtain information about this program, including a brochure, call FINRA at (800) , or log on to SIPC Securities and cash held in custody by Pershing for your account are protected up to the total amount held in the account. Of this total, the Securities Investor Protection Corporation (SIPC) provides $500,000 of coverage, including $100,000 for claims for cash. The remaining coverage, on securities only, is provided by Pershing through a commercial insurer. This account protection applies when a SIPC member firm fails financially and is unable to meet obligations to securities clients. It does not protect against losses from the rise and fall in the market value of investments. You may obtain more information about SIPC, including the SIPC brochure, by contacting SIPC at or by visiting the SIPC website at FDIC If I have selected the MetLife Bank FDIC-Insured Sweep Money Market Account ( MetLife Sweep Account ), I understand that the assets in that account are not securities and are not insured by SIPC. The MetLife Sweep Account is a bank account and is eligible for federal deposit insurance from the Federal Deposit Insurance Corporation ( FDIC ) up to the Standard Maximum Deposit Insurance Amount, which for most accounts is currently $250,000 per ownership category. Roth or Traditional Individual Retirement Accounts ( IRAs ) are insured up to a maximum of $250,000 per participant. I understand that insurance coverage is subject to other deposits that I hold at MetLife Bank in the same ownership capacity. I acknowledge that I am responsible for monitoring the total amount of deposits that I hold at MetLife Bank to determine the extent of FDIC insurance coverage available to me. 20. TERMINATION I understand that NES reserves the right to decline my brokerage account application or to terminate this agreement and close my account for any reason, in its sole discretion. If this agreement is terminated or if my account is closed for any reason, the IAAA and the IMA for my WMS Program will also be terminated. 21. MUTUAL FUND MARKET TIMING I understand that mutual fund companies may restrict the ability of their shareholders to engage in frequent purchases, redemptions and exchanges of fund shares ( Market Timing ). Iacknowledge that, as required by applicable law and your selling agreements with fund companies, you will fully cooperate with the specific mutual fund company s requests intended to permit the mutual fund company to monitor and/or restrict Market Timing, which may include a request to limit order size or revoke trading privileges in a particular fund or an entire fund family. If my order is rejected by the fund, you need not attempt to place the order again on my behalf. 22. AMENDMENTS I acknowledge that NES shall have the right to amend or modify this Agreement at any time upon not less than thirty (30) days written notice to me. Any such amendment or notification shall be effective as of a date to be established by NES in such written notice. 3

5 23. MONEY MARKET SWEEP OPTIONS FOR BROKERAGE ACCOUNTS I understand that I may choose to have all of my uninvested cash balances, including dividends and interest, in my brokerage or ProCash account (each a NES Account ) swept into an eligible money market fund ( Money Fund ) or an eligible MetLife Sweep Account. I understand that due to federal banking regulations, a for-profit corporation, a partnership or a limited liability company (each an Ineligible Participant ) may not have any assets swept from its NES Account into a MetLife Sweep Account. The default cash management sweep option for an Ineligible Participant registration will be the Reich & Tang Daily Income Money Market Retail Class Fund ("R&T Fund") unless another Money Fund is selected. I agree that if I am not an Ineligible Participant, my default cash management sweep option will be the MetLife Bank Basic FDIC-Insured Money Market Sweep Account, unless I designate in writing for another money fund to be used. If I am opening a ProCash Plus account and that I am not an Ineligible Participant, I understand that my default cash management sweep option will be the MetLife Bank Premier FDIC Money Market Sweep Account. For all existing NES Account updates, I instruct you to keep the current cash management sweep option for my NES Account unless you are notified to the contrary in writing. If, at any time, that my NES Account will hold assets on behalf of, or for the benefit of, an Ineligible Participant, I agree to notify you immediately before holding any such assets in my NES Account, and I understand that the R&T Fund will be the default Money Fund for my NES Account unless another Money Fund is selected. I acknowledge and agree that this Section of the Brokerage Account Agreement will apply only to assets in my standard brokerage account when my Investment Management Agreement ("IMA") for the WMS Program that I have selected in the IAAA has been terminated and the assets in my WMS Program has been moved to the standard brokerage account per the terms under the IMA. 25. GOVERNING AND APPLICABLE LAW This agreement and its enforcement shall be governed by the laws of the state of Massachusetts exclusive of its conflicts of laws provisions and except to the extent governed by federal securities law or the Federal Arbitration Act. I agree that this agreement shall cover any controversy, dispute, or claim concerning, individually and collectively, all my accounts where appropriate that I may open or reopen with NES and arising out of, or relating to, any transactions between NES, its employees, directors, agents, officers or affiliates and me; and shall inure to the benefit of NES s successors or assigns, whether by merger, consolidation or otherwise, and NES may transfer my account to NES s successors and assigns, and this agreement shall be binding upon my heirs, executors, administrators, successors, and assigns. Any such controversy, dispute, or claim shall be subject to the applicable statute of limitations of the state where I reside at the time that any complaint, claim or notice of arbitration is filed. 26. INDEMNIFICATION I agree to indemnify you and your affiliates and each of you and your affiliates' officers, directors, employees, independent contractors and agents (collectively Indemnified Parties ), and hold the Indemnified Parties harmless, from any losses, claims, damages, actions, demands, investment losses, costs, charges, attorneys fees or other fees and expenses resulting from, arising out of, or relating to my actions or failures to act, whether intentional or not, including losses resulting from actions taken by third parties. Beyond taking reasonable steps to verify the authenticity of instructions as coming from me or third parties acting either on my behalf, or in a fiduciary capacity for my benefit, I understand that you have no obligations to inquire the purpose, wisdom, or propriety of any instructions that you have received in relations to my account. 24. ACCOUNT DEBITS I understand that I am liable to you for payment upon demand of any debit balance or other obligations owed in my account or any deficiencies following a whole or partial liquidation, and I agree to satisfy any such demand or obligation. I agree to reimburse you for all reasonable costs and expenses incurred in the collection of any debit balance or unpaid deficiency in any of my accounts, including, but not limited to, attorneys fees. I agree that you may sell any securities or redeem shares of mutual funds held in my account as necessary to pay any fees or charges or other debits in my account without notice or demand. I understand that any liquidation of securities might result in taxable events to which capital gains (or other taxes) apply. I also agree that, to the extent available, shares in a money market fund (including any money market sweep account) will be redeemed first. I further agree that you may decline to accept any new purchase orders from me until all outstanding charges, fees or debits have been resolved. 27. PRE-DISPUTE ARBITRATION CLAUSE This agreement contains a pre-dispute arbitration clause. By signing an arbitration agreement the Parties agree as follows: (A) Both Parties to this agreement are giving up the right to sue each other in court, including the right to a trial by jury, except as provided by the rules of the arbitration forum in which a claim is filed. (B) Arbitration awards are generally final and binding; a Party s ability to have a court reverse or modify an arbitration award is very limited. (C) The ability of the Parties to obtain documents, witness statements and other discovery is generally more limited in arbitration than in court proceedings. (D) The arbitrators do not have to explain the reason(s) for their award. (E) The panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry. 4

6 (F) The rules of some arbitration forums may impose time limits for bringing a claim in arbitration. In some cases, a claim that is ineligible for arbitration may be brought in court. (G) The rules of the arbitration forum in which the claim is filed, and any amendments thereto, shall be incorporated into this agreement. Client agrees that any controversy concerning an Account, whether arising before, on, or after the date this Account is opened and arising out of or relating to this Agreement or any transactions between Client and New England Securities Corp., a Third Party Issuer (unless the agreement with such Third Party Issuer stipulates otherwise), or Pershing LLC, their employees, directors, agents, officers or affiliates shall be determined by arbitration before the FINRA Dispute Resolution, Inc. Judgment upon the award of the arbitrators may be entered in any federal or state court having jurisdiction. No person shall bring a putative or certified class action to arbitration, nor seek to enforce any pre-dispute arbitration agreement against any person who has initiated in court a putative class action; or who is a member of a putative class who has not opted out of the class with respect to any claims encompassed by the putative class action until: (i) the class certification is denied; or (ii) the class is decertified; or (iii) the customer is excluded from the class by the court. Such forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any rights under this Agreement except to the extent stated herein. Client acknowledges and agrees this Section titled Pre-Dispute Arbitration Clause shall survive termination of this Agreement. Client also acknowledges and agrees that nothing in this Section titled Pre-Dispute Arbitration Clause is intended to constitute a waiver or limitation of any non-waivable rights that Client may have under the Advisers Act, including, to the extent it is nonwaivable, the right to choose the forum, whether arbitration or adjudication, in which to seek resolution of disputes under the Advisers Act. 5

7 Fund Select/Fund Select Premier Investment Management Agreement This Fund Select/Fund Select Premier Investment Management Agreement (this "FSIMA") is made by and among the client ("Client ) listed on the signature page of the Wealth Management Service Investment Account Application & Agreement ("IAAA"), New England Securities Corp. ( NES ) and Lockwood Advisors, Inc. ("Lockwood"). Client, NES and Lockwood each is a Party and collectively are the Parties. By executing the IAAA, each Party agrees to be bound by the terms and conditions of this FSIMA. Client desires to open an investment advisory account ("Account") with NES and Lockwood for the purpose of participating in an investment program that invests in mutual funds ("Funds") and in the case of the Fund Select Premier Program, may also invest in exchange-traded funds ("ETFs"). For convenience, the term Program Funds means (i) with respect to the Fund Select Program, the Funds available through the Program, and (ii) with respect to the Fund Select Premier Program, the Funds and ETFs available through the Program. A description of the services to be provided and the Parties providing such services are set forth below. This FSIMA governs the Parties responsibilities and obligations with respect to the Fund Select Program and Fund Select Premier Program (collectively the Programs ). In consideration of the mutual promises and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, Client, NES and Lockwood each hereby agree as follows: 1. GENERAL DESCRIPTION OF THE PROGRAMS With both Programs, Lockwood has assembled and is responsible for maintaining model portfolios ( Portfolios ) that contain different expected risk tolerances and investment objectives. Each Portfolio created by Lockwood is comprised of a unique asset class mix, some of which in turn, consist of multiple investment styles. Under both Programs, Client invests in Funds and under the Fund Select Premier Program, Client also may invest in ETFs if Client s Account is serviced by an investment adviser representative of NES (an "IAR") who is licensed to advise Client on ETFs. Under both Programs, Client invests in Funds and/or ETFs, as the case may be, that match the risk tolerance and investment objective of the Portfolio that fits Client s financial situation. NES provides Lockwood with a selection of Funds and ETFs ( Universe ) to screen for inclusion in these Programs, and Lockwood may not select Funds or ETFs outside this Universe. Lockwood reviews certain quantitative and qualitative factors relating to a Fund s or ETF's organizational structure, investment 6 process, and historical performance to identify Funds and ETFs that it believes are appropriate for each investment style. Lockwood is responsible for monitoring the Funds and ETFs and their performance according to Lockwood s screening criteria. Under both Programs, NES will review Client s present financial situation and provide Client with investment advice regarding the investment and reinvestment of Client s assets in the selected Program. NES through the IAR assigned to Client s Account, and Lockwood will provide ongoing services to Client as described in this FSIMA. At least annually or on a more frequent basis, the IAR will review Client s recommended Portfolio, including the asset class and investment style allocations and the Program Funds Client is invested in. This review is designed to determine that the selected Program and Client s investments thereunder are still appropriate and consistent with Client s financial circumstances. The IAR is also available on an ongoing basis to discuss Client s participation in the selected Program, the roles of the Parties, or Client s investments in general. Client also has the opportunity to impose reasonable investment restrictions applicable to Client s assets in both Programs by identifying them on the IAAA. Investment restrictions must be reasonable, as solely determined by Lockwood, and must be complete and consistent with applicable law. Lockwood will observe the investment restrictions that the Client identified in the IAAA, if deemed reasonable; provided that Lockwood reserves the right to seek further direction from the Client through NES before any such investment restrictions are observed. By executing the IAAA, the Client acknowledges and agrees that the Client has been given the opportunity to impose reasonable investment restrictions on Client s Account, and the reasonable investment restrictions, if any, that the Client wishes to impose at the time Client executed the IAAA have been communicated in writing to Lockwood by the Client via the IAAA. Lockwood also creates and maintains the software utilized by NES s IARs to generate the Proposals (as defined below). Lockwood generates and causes to be sent to Client reports concerning the performance of Client s Account on at least a quarterly basis, on behalf of NES. 2. PROGRAM CHOICES Lockwood and NES acknowledge and agree that they are both cosponsors, as defined in Rule 3a-4 of the Investment Company Act of 1940, as amended, of each of the Programs, and that the respective duties of each of Lockwood and NES as co-sponsors are as outlined in this FSIMA and as may otherwise be provided in written agreement(s) between Lockwood and NES.

8 a. Fund Select Program Roles of Each Party Lockwood: Under the Fund Select Program Lockwood is responsible for selecting one or more Program Fund(s) for each investment style underlying Client s Portfolio in accordance with its proprietary screening process. The Program Fund(s) selected by Lockwood will depend on which Portfolio the Client is investing in, which in turn depends on the Client s financial situation as expressed in the investment questionnaire completed by the Client with assistance from the IAR ( Investment Questionnaire ). NES: In the Fund Select Program, NES is responsible for communicating with Client about Client s Account. NES, through the IAR assigned to Client s Account, shall assist Client in completing the Investment Questionnaire, which is used to help Client define Client s investment objectives and strategies by collecting relevant financial information about Client s objectives, assets, risk tolerance and investment experience. Client s responses to the Investment Questionnaire will be relied upon by Lockwood and NES to determine which Portfolio is an appropriate selection for Client. NES also shall accept from Client inquiries about Client s Account and coordinate the provision of responses to Client. NES will be responsible for providing Client with all Account documents, disclosures and other necessary documents. Except with respect to the selection of cash vehicles, NES does not recommend any securities under the Fund Select Program. b. Fund Select Premier Program Roles of Each Party Lockwood: Under the Fund Select Premier Program, Lockwood is responsible for selecting Program Funds for each investment style underlying Client s Portfolio in accordance with its screening process. NES: In connection with the Fund Select Premier Program, NES is responsible for doing everything it does under the Fund Select Program. In addition, for each investment style underlying Client s Portfolio, NES, through the IAR assigned to Client s Account, will recommend how to allocate Client s Account assets among the Program Funds selected for each investment style by Lockwood. The IAR also may recommend slight changes to the standard investment style allocations comprising the Portfolios established by Lockwood. However, in all cases the final investment decision rests with the Client. 3. CUSTODIAL SERVICES In order to effectuate trades under the Programs, Client also has established or shall establish a brokerage account(s) through NES with Pershing LLC ( Custodian ), who will act as clearing firm and custodian for Client s assets. Accordingly, trading activity in connection with the Programs will generally be effected through the brokerage account with the Custodian. However, if Lockwood reasonably believes in good faith, and consistent with applicable fiduciary standards, that another broker or dealer will provide better execution considering all factors including the net price, then it may execute elsewhere. Client hereby acknowledges that the foregoing direction may result in certain costs or disadvantages to Client, either because Client may pay higher commissions or other costs on some transactions than might otherwise be attainable by Lockwood, or may receive less favorable execution on some transactions, or both. Moreover, if 7 Lockwood were to execute a transaction through a broker or dealer other than the Custodian, the expense of commissions or other transaction costs for or associated with services provided by another broker or dealer will be additional expenses not included in the Fee. Regardless of the executing broker or dealer, all assets will be held at Custodian. By executing the IAAA, Client is entering into an agreement with NES (the Brokerage Account Agreement ) (which can be found in this WMS Disclosure Booklet which the Client received at the time that the Client executed the IAAA) to open a brokerage account for the Program (s). Custodian will act in the capacity as a clearing firm and perform centralized cashiering, bookkeeping and execution functions. Custodian will handle the delivery and receipt of securities purchased or sold in Client s brokerage account; receive and distribute dividends and other distributions; and process exchange offers, rights offerings, warrants, tender offers and redemptions. Custodian will send Client statements of all activity in Client s brokerage account on no less than a quarterly basis, and written confirmations of trades executed through Client s brokerage account. By executing this IMA and the Brokerage Account Agreement, Client authorizes NES to give Custodian fund and securities disbursement or transfer instructions for Client s Account on Client s behalf. For the avoidance of doubt, Lockwood has no rights or responsibilities under the Brokerage Account Agreement and shall have no liability with respect thereto. Notwithstanding the above, if Client s brokerage account(s) is subject to the Employee Retirement Income Security Act of 1974, as amended ( ERISA ), Custodian shall provide executing services only so long as it is authorized by Client to do so in a manner that is in accordance with ERISA. As described in Section 10 of this FSIMA, Clients who transfer securities into the Program(s) should be aware that some, and possibly all, transferred securities may be liquidated upon, or shortly after, receipt by Lockwood via the Custodian. Client hereby directs Lockwood to liquidate such transferred securities, if any, via the Custodian, and Client acknowledges that the resulting trades will not always achieve best execution when sent through the Custodian. 4. TRADING AUTHORITY Client hereby authorizes Lockwood, in its sole discretion, to make changes under both Programs, as described below. This authorization is continuing and shall remain in full force and effect and may be relied upon by Lockwood until this FSIMA is terminated as described herein. Client will be notified of changes to securities holdings in Client s Account either (a) via NES or (b) via confirmations and/or brokerage account statements from Custodian. First, Lockwood may, in its discretion, remove a Program Fund from the Programs if such Program Fund fails to meet its screening criteria and replace it with another Program Fund. Under the Fund Select Program, Lockwood will automatically move the assets from the former Program Fund into the new replacement Program Fund selected by Lockwood. This feature is included as part of the Fund Select Program and it is the sole responsibility of Lockwood. Client does not have the ability to opt out of this feature. Client will be notified of such changes via confirmations and Account statements from Custodian.

9 If Client is in the Fund Select Premier Program, Lockwood reserves the right to automatically move the assets from the old Program Fund into the new replacement Program Fund selected by Lockwood. However, Lockwood via NES s IAR will generally attempt to notify Client in advance of the replacement. Client may change the allocation of Client s assets from the replacement Program Fund automatically selected by Lockwood to a different Program Fund. If Client is interested in making such a change, Client should consult with Client s IAR. Client acknowledges and agrees that if Client wants to have a different Program Fund from the Program Fund automatically selected by Lockwood, Client s selection may be effected after the automatic replacement has been effected by Lockwood. The replacement process described above for both Programs will be subject to the usual and customary settlement procedures governing mutual funds or ETFs, as appropriate. Client acknowledges and agrees that since Program Fund replacements will result in sales of Program Funds, such transactions might result in taxable events to which capital gains (or other) taxes apply. Second, Lockwood may, as a result of financial and economic events, change the recommended asset allocations comprising a given Portfolio. If Lockwood deems it advisable, it may, in its sole discretion, adjust the recommended allocation percentages forming a Portfolio. For the Fund Select Program, such a change will result in adjustments to the investment style and Program Fund allocations in Client s Account. For the Fund Select Premier Program such changes will supercede any changes the Client has selected previously; however, NES will notify Client of changes to the recommended Portfolio allocation. If Client is interested in making changes to Client s Account allocations (within predetermined ranges), Client should consult with Client s IAR. However, the final investment decision in the Fund Select Premier Program generally rests with Client. Client acknowledges and agrees that transactions that result from adjustment of a Portfolio might result in taxable events to which capital gains (or other) taxes apply. Program Funds from Client's Account, processing of Client contributions or withdrawals, or during the initial investment of a Client's Account. If the amount of Client s cash investment style triggers a rebalance in accordance with applicable thresholds established by Lockwood, then Client s Account will automatically be rebalanced by Lockwood back toward its original allocation mix so that Client s cash investment style again approximates the Cash Target. Lockwood shall review Client s Account on at least a weekly basis to determine if the automatic rebalancing should occur. The rebalancing feature is included as part of the Programs and is the sole responsibility of Lockwood. Client does not have the ability to opt out of this feature. Fourth, Lockwood will have authority to make such trades as necessary to fulfill its obligations under this FSMIA, including authority to reverse a Program Fund purchase and replace it with another eligible Program Fund that Lockwood, in its sole discretion, determines to be comparable to the Program Fund that was removed. Client will be notified of such changes via confirmations and Account statements from Custodian. This feature is included as part of the Programs and Client does not have the ability to opt out of this feature. 5. PROXY VOTING AND CORPORATE ACTION AUTHORITY Client is responsible for responding to proxies, consents, waivers and other documents with respect to any securities held in the Programs except with respect to voluntary corporate action notices. Provided that Lockwood timely receives voluntary corporate action notices, Lockwood will determine on behalf of Client whether Client s Account will participate in particular voluntary corporate actions. Lockwood will make such determinations in its full discretion, consistent with its policies and procedures. Client acknowledges that NES shall have no responsibility for responding to proxies, consents, waivers and other documents regarding corporate actions under the Programs. Third, in both Programs, Lockwood will automatically rebalance Client s Account back toward the target investment style allocation mix if the current weighting of the Program Funds causes an investment style to vary by a certain percentage threshold from the Client s initial allocation and rebalance trades exceed a certain dollar threshold. This feature is designed to keep Client s Account consistent with the selected Portfolio. Such rebalancing means that each of the Program Funds within an out-of-balance investment style is set back toward its target selected percentage. Thus, Lockwood shall purchase additional shares of certain Program Funds and sell shares of other Program Funds. Client acknowledges and agrees that redemptions and exchanges resulting from rebalancing Client s Account might result in taxable events to which capital gains (or other) taxes apply. All of the Portfolios in the Programs currently have a cash investment style target level of 3% ("Cash Target"), meaning the Portfolios are designed to maintain funds in the cash investment style in an amount that approximates the Cash Target to pay for fees and charges under the Programs. There may be instances when the cash allocation temporarily exceeds the Cash Target due to standard operational processing, such as the removal of 8 6. NO EXCLUSIVITY Client understands that each other Party, and such Party s affiliates, may have investment responsibilities, render investment advice to, and perform other investment advisory services for, other individuals and entities ( Other Accounts ). By signing the IAAA for this FSIMA, Client acknowledges and agrees that each other Party, and such Party s affiliates (and all of the respective partners, directors, trustees, officers, agents and employees of such Party and its affiliates) may buy, sell or trade in any securities for their own respective accounts ( Affiliated Accounts ). Each other Party, and such Party s affiliates, may give advice or exercise investment responsibility and take such other actions with respect to Other Accounts and Affiliated Accounts which may be similar to, differ from, or contradict the advice given or the timing or nature of action taken with respect to Client s Account. Client understands that Other Accounts and Affiliated Accounts may at any time, hold, acquire, increase, decrease, dispose of or otherwise deal with positions in investments in which Client s Account(s) may have an interest from time to time, whether in

10 transactions which involve Client s Account(s) or otherwise. Client acknowledges and agrees that the other Parties shall have no obligation to purchase for Client s Account(s) a position in any investment which Other Accounts or Affiliated Accounts may acquire, and that Client s Account(s) shall have no first refusal, co-investment or other rights in respect of any such investment. 7. LIMITATIONS OF LIABILITY; INDEMNIFICATION Client understands that the other Parties do not guarantee (a) the future performance of Client s Account(s), (b) any specific level of performance, (c) the success of any investment decision or investment strategy used, (d) the success of the overall management of Client s Account(s), or (e) that any particular individual will provide the services to be provided by such Parties under this FSIMA. Client understands that investment decisions made for Client by the other Parties (as applicable) pursuant to this FSIMA are subject to various market, currency, economic, political and business risks, and that those investment decisions will not always be profitable and may subject Client s Account(s) to overall investment losses. In addition to any other remedy available under applicable law, Client agrees to indemnify, defend and hold harmless each other Party, and its affiliates, and their respective shareholders, trustees, directors, officers, employees and agents, from and against any loss, injury, claim, damage, other liability, cost or expense (including, without limitation, reasonable attorney s fees) (collectively, Losses ) asserted against, or incurred or suffered by, such Party arising out of or relating to (a) a breach of Client s obligations, covenants or representations and warranties under or in connection with this FSIMA or IAAA, (b) a violation of applicable law by Client, (c) Client s gross negligence or willful misconduct, (d) any obsolete, incomplete or inaccurate information provided to such Party by or on behalf of Client, or (e) any action taken or not taken pursuant to an express instruction from Client. Unless otherwise specifically provided in this FSIMA or by applicable law, Lockwood and NES will not be responsible or liable to Client for any action or inaction of the other Party, or for any Losses sustained by Client or Client s Account(s) due to any error in judgment by such Party on the purchase, sale, redemption or retention of any security or instrument, unless such Loss is due to such Party s negligence, willful misconduct or violation of laws; Client agrees that neither NES nor Lockwood shall be responsible or otherwise liable for any consequential, incidental, special or punitive damages, whether or not any of them were advised (or were otherwise aware) of the possibility of such damages. Notwithstanding the foregoing or any other provision to the contrary in this FSIMA, nothing in this FSIMA shall constitute a waiver of any rights of Client or relieve any Party or its affiliates, or their respective shareholders, trustees, directors, officers, employees and agents, from any liability, under ERISA or applicable state and federal securities laws. The provisions of this Section titled Limitations of Liability; Indemnification shall survive termination of this FSIMA. 8. PROGRAM FEES Client will pay one fee (the Fee ) for the advisory services of Lockwood and NES and the execution of Program Fund transactions by Custodian as described hereunder. The Fee is a percentage of the assets Client has invested in the Programs including any portion of the assets maintained in cash (and/or short-term investments including, but not limited to, money market funds). The Fee is negotiable within certain limits and the specific amount of Client's Fee is identified on the signature page to the IAAA. The Fee remains the same regardless of which Program Funds or type of Program Funds (i.e., ETFs or Funds) that Client selects for Client's Account. The fees charged by Lockwood and NES are explained more fully in each of their disclosure brochures containing the information required by Form ADV Part II ( Disclosure Brochure ). The Fee will be debited and paid in advance on a quarterly basis. The Fee will be used to compensate Lockwood, NES and Custodian for their respective services. NES reserves the right at its discretion to reduce the fee for accounts $2,000,000 and over, or accounts held by employees, associated persons, agents or independent contractors of NES or its affiliates and their immediate family members. All of the Funds in Programs are load-waived, meaning the sales charges typically associated with mutual funds have been waived. Client understands that under the Programs, the Portfolios are designed to maintain funds in the cash investment style at approximately the Cash Target to pay for fees and charges under the Programs. Client understands that the Fee does not include certain other fees and charges such as any fees imposed by the Securities and Exchange Commission, wire transfer fees, fees resulting from any special requests Client may have, fees or commissions for securities transactions (including without limitation dealer markups or mark-downs) through any broker-dealer other than the Custodian, or costs associated with temporary investment of Client funds in a money market account. In addition to the Fee, the Custodian may charge you additional miscellaneous fees (e.g., ACAT fees, IRA maintenance fees). Client further understands that the Fee does not include the internal management, operating or distribution fees or expenses imposed or incurred by a Fund or ETF, which may include 12b-1 fees, early termination fees (which include fees on whole or partial liquidations of your Program Account) and other fees and expenses that may be assessed by the investment vehicle's sponsor, custodian, transfer agent, adviser, shareholder service provider or other service providers. Client acknowledges that these expenses may include administration, distribution, transfer agent, custodial, legal, audit and other fees and expenses. Further information regarding charges and fees assessed may be found in the appropriate prospectus, and/or annual report, and/or custodial agreement. Client acknowledges Client has read or agrees to read each Fund s and each ETF s prospectus for a more complete explanation of these fees and expenses. Client understands that Client may invest directly in the Program Funds (i.e., outside of the Programs) without paying the Fee. Thus, Client understands that it may be less expensive for Client to invest in the Program Funds outside of the Programs. However, Client acknowledges that Client will not receive the advisory services provided under the Programs if Client chooses to do so. Client also understands that neither NES nor Lockwood represents that the Fee Client pays is the same as or lower than that charged to other clients who invest in the Program or is the same as or lower than that charged by other sponsors of comparable programs for accounts of comparable size or investment objectives. 9