NEWPORT COAST SECURITIES, INC. UNIFIED MANAGED ACCOUNT UMA

Transcription

1 NEWPORT COAST SECURITIES, INC. UNIFIED MANAGED ACCOUNT UMA OVERVIEW, CLIENT PROFILE, AGREEMENT & ACCOUNT FORM MacArthur, First Floor, Irvine, CA Newport Coast Securities, Inc., a Registered Investment Advisor MEMBER FINRA/SIPC 1

2 UMA OVERVIEW Newport Coast Securities, Inc. ( NCS ) offers a Unified Managed Account program ( UMA ) through an agreement with FOLIOfn Investments, Inc., a brokerage firm based in the Washington, D.C. suburb of Tysons Corner, Virginia ( FOLIOfn ). Pursuant to the UMA, an independent investment advisor representative associated with NCS has trading discretion to allocate a client s account opened at FOLIOfn using investment models, as well as to manage mutual funds and exchange traded funds and to rebalance the account from time-to-time among the investment alternatives. Models are provided to the UMA by outside management firms Concord Wealth Management ( Concord ) and Summit Alliance Capital Management ( Summit Alliance ). The minimum initial investment for the UMA is $25,000. UMAs are charged an assets under management fee, based on the value of all securities in the account, plus a quarterly administrative fee of $ These fees cover asset allocation, investment management, execution, custodial and reporting services. FOLIOfn was selected for the UMA because it allows fractionalized share trading, which enables smaller accounts to take advantage of models provided through Concord and Summit Alliance. FOLIOfn, member FINRA/SIPC, offers an integrated brokerage and technology platform featuring trading, execution, clearance and settlement services. Concord and Summit Alliance are both registered investment advisors who have agreements with institutional third party managers who provide the models that are available in the UMA. For further information, see NCS s ADV Part II and Schedule H, copies of which have been delivered to you, as well as the websites for FOLIOfn ( Concord ( and Summit Alliance ( 2

3 Newport Coast Securities, Inc. Confidential Client Profile and Account Form I. TYPE OF ACCOUNT Individual Joint Tenants with Rights of Survivorship Joint Tenants in Common Tenants by Entirety Corporation Investment Club Sole Proprietorship Partnership IRA (Traditional) Rollover IRA SEP IRA Roth IRA Keogh/Money Purchase Plan Custodian Guardian Temporary A/C Transfer on Death (TOD) Estate Trust Revocable Living Trust U/W/A Will Letter of Conservatorship Community Property II. CONFIDENTIAL CLIENT SUMMARY Full Legal Account Title: Display Name: Presentation Date (mm/dd/yyyy): Client / Plan / Trust Name First Name / Plan or Trust Name: Last Name / Plan or Trust Type: Contact (Plan): Address: _ City: State: Zip Code: Country: Tax ID / Social Security #: - - Telephone: ( ) _ - Employer Name: Employer State: Occupation: III. ACCOUNT INFORMATION (Please complete the section below as it corresponds to the proposed account) A. Personal Account / IRA: Date of Birth (mm/dd/yyyy): Age Plan to Retire: US Citizen: Yes No Co-Applicant First Name: Co-Applicant Last Name: Co-Applicant DOB (mm/dd/yyyy): Approx. Net Worth: $ Approx. Annual Income: $ Current Tax Bracket: 0-15% 16-28% 29% and Up Anticipate significant change income over the next three years What changes do you expect in your employment status and/or income from employment in the next few years: I may terminate employment or plan to retire My annual income will likely be reduced My income tends to greatly fluctuate My income will not likely change My income will most likely increase at a steady rate How many dependents do you have: None B. Charitable Trust Account: 3

4 Specify Type of Trust: Annuity Standard Trust Net Income Unitrust Net Income Unitrust with Make-Up Provision What is the anticipated Trust Payout Rate: % The Trust requires that the income distributions come from: Interest & Dividends Corpus Either Both C. Corporate Account: Current Tax Bracket: IV. TOTAL INVESTABLE ASSETS Please complete the following questions as they apply to your total investable assets A. What is the value of your total investable assets: $ How were the investable assets accumulated: B. Which best describes the current asset allocation of your total assets: 100% Equities / 0% Fixed Income 80% Equities / 20% Fixed Income 60% Equities / 40% Fixed Income 40% Equities / 60% Fixed Income 20% Equities / 80% Fixed Income 0% Equities / 100% Fixed Income 0% Equities / 100% Cash C. Please indicate the approximate value of your current assets below: Asset Class Personal Savings IRA & Other Tax Deferred Investments Pension Plan(s) Cash Equiv/Money Market Fund Domestic Bonds or Bond Funds Municipal bonds or Bond Funds International Bonds or Bond Funds Stocks or Stock Funds Other Total 4

5 D. What percent of your total personal savings or expected assets will be spent on education, housing or other major expenditures within the next five years: 75% or More 50-75% 25-50% 5-25% 0% E. Is your liquid net worth less than $1 million? Yes No If Yes, is the amount you are investing more than 10% of your liquid net worth? Yes No F. Your knowledge of financial markets and investments: Severely limited I am fully dependent on advice from professionals I have basic understanding of the markets and what stocks, bonds and mutual funds are I have a good understanding of investments and I am able to discuss simple financial concepts I handle all my own investments including the research and asset selection I would be considered an expert in investing either by career, education or experience and I am able to discuss the most difficult financial concepts G. You have been investing directly for: 0-1 Year 1-5 Years 6-10 Years Years 15+ Years H. In what kinds of securities have you invested, previously or currently? Please check all that apply: Domestic Large Company Equities International Equities Domestic Small Company Equities International Fixed Income Domestic Tax Free Income (Municipals) Other Domestic Taxable Fixed Income (US Governments, Corporates, etc.) V. ASSETS FOR THIS STRATEGY PROPOSAL Please complete the following questions as they apply specifically to the assets being considered for this investment strategy proposal. A. Of the total assets previously described in Section 4, Question C, what is the amount to be considered for this investment strategy proposal? Asset Class Personal Savings IRA & Other Tax Deferred Investments Pension Plan Cash Equiv/Money Market Fund Domestic Bonds or Bond Funds Municipal Bonds or Bond Funds International Bonds or Bond Funds Stocks or Stock Funds Other Total $ B. Please describe your goals for these particular assets. To what purpose will they be put, and when: 5

6 C. NOTE: ACCOUNTS ARE NOT MANAGED FOR CASH FLOW: Will you request distributions or withdrawals from these assets? If yes, please indicate the expected amount as either: % Percent per year or $ Dollars per year Please indicate how you would like the distribution to be made: Monthly Quarterly Semi-Annually Annually When do you anticipate these withdrawals to begin: D. Will you make additional contributions/deposits to these assets? If yes, please indicate the expected amount as either: % Percent per year or $ Dollars per year When do you anticipate these deposits to occur: VI. INVESTMENT OBJECTIVES AND RISK TOLERANCE Please complete the following questions as they apply specifically to the assets being considered for this investment strategy proposal A. Your requirement for investment income is: Extremely Important I need income to meet my daily living expenses Important I require my investment income to maintain my lifestyle Somewhat Important Investment income allows me to afford additional discretionary items Somewhat Unimportant Investment income offers me additional liquidity, though I don t require the funds Unimportant My investment strategy is for long-term growth and I have no need for additional income at this time B. The goal of my investment strategy is to: Maintain full liquidity (cash or equivalents) without having to keep pace with inflation To keep my assets safe, but I wish to keep pace with the inflation rate Receive a moderate return over the rate of inflation Receive a greater than average return to continuously grow my assets Increase my wealth by receiving significantly greater than average returns C. Please choose one of the following which best describes your investment objective: In cash or Cash Equivalent assets that seek maximum preservation of value with little or no objective of income or appreciation, nominal volatility can be expected In Income assets that seek a high level of income with little or no objective of capital appreciation, moderate volatility can be expected In Balanced assets that seek both capital appreciation and an investment objective of income, moderate volatility is expected In Growth assets that seek capital appreciation with no current income objective and a substantial allocation to equity type securities, high volatilitya is expected In Aggressive Growth assets that seek aggressive growth with no current income objective and a full allocation to equity type securities, substantial volatility is expected D. Please rate your tolerance to investment risk: (1) being the lowest and (10) being the highest E. When you learn the value of your investments dropped 30%, you: Sell Immediately Sell if it drops further Wait until the value returns and then sell 6

7 Continue to hold for a long time Buy more F. If you were to invest $100,000 over a five year period which of the following best/worst case scenarios would you be willing to accept: Best / Worst $110,000 / $100,000 $120,000 / $ 98,000 $180,000 / $ 70,000 $250,000 / $ 50,000 $450,000 / $ 20,000 G. Allowing a longer time period for meeting your investment goals makes it more probable you will achieve them. Further, the longer your time horizon, the more the volatility of your portfolio decreases. Given this, what investment time horizon is most appropriate for these assets: 1-3 years 3-5 Years 5-10 years 10 years or More H. Are there any legal, social, tax or other constraints that may be relevant to the management of the portfolio: I. Are there any limitations to holding specific securities in the portfolio: J. Is there any additional information about yourself, your current financial status or goals that is pertinent to the management of your portfolio: 7

8 NEWPORT COAST SECURITIES, INC. INVESTMENT ADVISORY AGREEMENT UNIFIED MANAGED ACCOUNT (UMA) The undersigned ("Client") hereby retains Newport Coast Securities, Inc., a California corporation ("NCS"), to perform investment advisory services through the independent investment advisor representative ( IAR ) listed on the attached signature page under the terms of this Investment Advisory Agreement ( Agreement ) as set forth below: I. INVESTMENT ADVISORY SERVICES A. Client hereby authorizes IAR to perform the advisory services pursuant to this Agreement with respect to the account(s) that Client has opened with FOLIOfn Investments, Inc. ( FOLIOfn ) as listed on the signature page (the Account(s) ), according to the information provided by Client in the Confidential Client Profile attached to this Agreement as it may be updated from time to time ( Client Profile ), including the investment objectives selected by the Client ( Client Profile ). B. IAR will perform the advisory services pursuant to this Agreement, subject to the restrictions and limitations set forth below. If for any reason and in the sole discretion of NCS, IAR is unable to render services to the Account temporarily or permanently, terminates his/her relationship with NCS, or Client notifies NCS that it would like a replacement advisor, NCS shall promptly assign a new IAR to the account to carry perform the advisory services. C. Client hereby grants IAR discretionary authority over the Account(s), and authorizes the IAR to purchase and sell securities on a discretionary basis without contacting Client for prior approval, and to act for the Client in all matters necessary to perform advisory services for such Account(s). In making investment determinations with respect to the Account, IAR will rely on the information contained in the Client Profile. This authorization shall remain in full force and effect until terminated by Client in writing and received by NCS. Termination of this Agreement may only be made in writing by Client. This authorization shall be binding on the personal representatives, heirs, and executors of Client. D. Account statements will be provided directly by FOLIOfn in accordance with the terms of the Account(s). E. Client acknowledges that (a) Client completed or reviewed the Client Profile and that it accurately reflects his or her investment objectives and circumstances, (b) Client has received a copy of this Agreement and agrees to be bound by its terms and conditions, and (c) this Agreement is governed by a pre-dispute arbitration clause located in Section IV of this Agreement. F. Client agrees to inform IAR in writing promptly of any changes in Client's investment objectives or circumstances. FOLIOfn maintains custody of the Account(s). IAR will contact Client on a periodic basis to request information about Client to determine whether there have been any changes in Client s financial situation, investment objectives or instructions. G. IAR will comply if possible with any reasonable requests given by Client relating to management of the Account. Reasonable requests given by Client may include prohibitions with respect to allocation or purchase of particular types of securities holdings. If Client s request cannot be met or are considered unreasonable by IAR or NCS, NCS will notify Client that the instructions may be modified or the Agreement terminated. Client understands that Client cannot request or provide instructions that prohibit or restrict the purchase or sale of specific securities or types of securities within a mutual fund. H. Client will retain (i) the ability to withdraw and to then pledge any securities in the Account(s), (ii) the right to vote securities or to delegate the voting authority, and to revoke such delegation, to another person, and (iii) the right to proceed directly as a security holder against the issuer of any security in the Account(s) without having to join any person involved in the operations of the Account(s) as a condition precedent to proceeding against the issuer. I. Subject to acceptance by NCS in its discretion, Client may transfer securities into the Account. By accepting transfer of such securities, neither NCS nor IAR is responsible for any actions undertaken by a broker-dealer or investment advisor prior to the transfer of such securities, and Client agrees to hold NCS and IAR harmless and indemnify it from and against any and all liability, loss or damages arising directly or indirectly from any actions taken prior to the transfer of such securities into the Account. In addition, Client understands that IAR may sell, liquidate or otherwise dispose of some or all of the securities transferred into the Account(s) pursuant to the exercise of investment discretion over assets held in the Account(s) without consideration of tax consequences. Client should consult his or her tax advisor regarding possible tax consequences of selling securities transferred into the Account. 8

9 J. FOLIOfn maintains custody of the Account(s). Client will receive confirmations of Account transactions and account statements (which also reflect the amount of UMA Fees) directly from FOLIOfn. K. Client authorizes NCS and IAR to provide all execution services relative to the Account(s) through FOLIOfn. The executions, as well as custodial services, are included in the fees described in this Agreement. II. FEES A. Client agrees to pay NCS an Advisory Fee based on value of the assets in the Account, at the percentage set forth on the signature page of this Agreement plus an administrative fee charged quarterly or monthly ( Advisory Fee ). See attached Signature Pages for exact fees to be charged to your Account. B. The Advisory Fee is payable quarterly in arrears, unless designated by Client on the signature page as monthly in arrears or monthly in advance. Client authorizes NCS to calculate the Advisory Fee and authorizes FOLIOfn to debit the Account(s) to pay the fees to NCS. The quarterly (or monthly) Advisory Fee will be the sum of (a) the daily Account Asset Values for each day in the preceding calendar quarter (or month, as the case may be) multiplied by (b) the annualized fee rate divided by 365. The Account Asset Value means the sum of the market value of all securities (both long and short) and Money Market Funds and Mutual Funds and credit balances, as well as all cash and cash equivalents, as calculated by FOLIOfn. Client will maintain or deposit sufficient funds in the Account(s) to cover payment of the Advisory Fees and any other amounts that may be due hereunder. Client authorizes FOLIOfn to debit Account balances, redeem shares or withdraw funds from the cash sweep option, redeem Money Market Fund shares not utilized as a cash sweep option, or sell securities or other property in the Account, without notice to Client, in order to generate proceeds sufficient to pay all such fees. FOLIOfn may, in its discretion, select the particular securities and other property to be sold in order to satisfy any fees due. Payment of these fees generally will be made first from free credit balances, next from withdrawal from the cash sweep option, and finally from liquidating any remaining securities or other property in the Account. In the event Client terminates the Account, the fee for the quarter or month of termination shall be due prior to termination (based on the sum of the daily Account Asset Values for each day from the beginning of the quarter or month through termination, multiplied by the annualized fee rate divided by 365). C. The Advisory Fee covers investment advisory services, including asset allocation, performance reporting and all other services provided to NCS by Concord and Summit Alliance, and also execution, and custody by FOLIOfn. In addition to Advisory Fees, Client may also incur other charges, including (i) IRA and other fees imposed by FOLIOfn as detailed on FOLIOfn s website, (ii) any redemption fees, exchange fees or similar fees imposed in connection with mutual fund transactions, and (iii) a proportionate share of any mutual funds or money market funds internal expenses, including advisory fees paid to the mutual funds or money market funds investment advisors, which may be FOLIOfn or its affiliates. For more information about mutual fund or money market fund fees, please see the appropriate mutual fund prospectus. Client should be aware that the Advisory Fee will encompass all money market funds and mutual funds held in the Account(s), even those transferred into the Account(s) that may have previously paid sales charges or borne other costs, as well as any cash in the Account. Client may invest in many mutual funds directly with the applicable mutual fund without incurring the advisory fee charged for participation in this Agreement. Certain institutional investors may directly purchase a class of shares of certain funds that do not charge shareholder services, sub-accounting or other related fees. In addition, for certain accounts that hold a high percentage of investments in money market funds or funds, other advisory UMAs may be available through NCS for lower advisory or other fees. A Client may also invest in a single mutual fund family and obtain breakpoints that may lower the cost of the money market funds or other mutual funds in the same family. However, when an investor purchases money market fund or mutual fund shares outside of the FOLIOfn UMA, the investor will not receive the services provided under this Agreement, and some mutual funds may impose a sales load on direct investments. III. BASIS OF ADVICE; LIABILITY A. Client acknowledges that NCS and IAR obtain information from a wide variety of publicly available sources. Neither NCS nor IAR has sources of inside or private information. If NCS or IAR obtains material non-public information about a security or its issuer that they may not lawfully use or disclose, neither NCS nor IAR will have any obligation to disclose the information to Client or use it for Client's benefit. 9

10 B. The selections of models and investments are based upon the professional judgment of IAR. Neither NCS nor IAR guarantees the future performance of the Account(s) or promises any specific level of performance or promises that investment decisions, strategies or overall management of Account(s) will be successful. The investment decisions IAR will make for Client are subject to various market, currency, economic, political and business risks, will not necessarily be profitable, and are subject to investment risk, including possible loss of principal. C. In managing the Account(s), the IAR will not consider any securities, cash, or other investments or assets Client owns outside of the Account(s) for diversification, liquidity or other purposes. Neither NCS nor IAR will have any responsibility whatsoever for the management of any of Client's assets other than those in the Account(s). D. Client understands that NCS, IAR and their affiliates or agents perform advisory and brokerage services for various clients and that NCS and IAR may give advice to or take actions for other clients (including those who may also be participants in similar agreements) which may differ from the advice given or the timing or nature of any action taken for the Account(s). In addition, IAR is not required to purchase, sell or recommend for purchase or sale for the Account(s) any security which NCS, their principals, affiliates or employees, or IAR may purchase or sell for its or their own accounts or the account of any other client. E. The FOLIOfn UMA and any securities in the Account(s) are not deposits of any bank and are not insured or otherwise protected by the Federal Deposit Insurance Corporation or any other government agency; are not an obligation of any bank or any affiliate of NCS or FOLIOfn, are not endorsed or guaranteed by NCS or FOLIOfn or any bank or any of their affiliates, and involve investment risk including possible loss of principal. F. Neither NCS, the IAR nor any of their affiliates will be liable to Client for any loss (1) arising out of any error of judgment or mistake of law, for any loss arising out of any investment or for any act or omission in the provision of services under this Agreement, except for losses resulting from (a) bad faith or negligence, and (b) any liabilities that cannot be waived under state or federal law; or (2) caused by following Client's instructions. Federal and state securities laws impose liabilities under certain circumstances on persons who act in good faith, and the terms of this Agreement do not waive or limit Client's rights under those laws. IV. ARBITRATION THIS AGREEMENT IS SUBJECT TO A PRE-DISPUTE ARBITRATION CLAUSE. In connection with the following agreement to arbitrate, Client understands that: THE RIGHT TO A TRIAL BY JURY, EXCEPT AS PROVIDED BY THE RULES OF THE ARBITRATION FORUM IN WHICH A CLAIM IS FILED. ARBITRATION AWARDS ARE GENERALLY FINAL AND BINDING; A PARTY S ABILITY TO HAVE A COURT REVERSE OR MODIFY AN ARBITRATION AWARD IS VERY LIMITED; THE ABILITY OF THE PARTIES TO OBTAIN DOCUMENTS, WITNESS STATEMENTS AND OTHER DISCOVERY IS GENERALLY MORE LIMITED IN ARBITRATION THAN IN COURT PROCEEDINGS; THE ARBITRATORS DO NOT HAVE TO EXPLAIN THE REASON(S) FOR THEIR AWARD. THE PANEL OF ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF ARBITRATORS WHO WERE OR ARE AFFILIATED WITH THE SECURITIES INDUSTRY. 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. THE RULES OF THE ARBITRATION FORUM IN WHICH THE CLAIM IS FILED, AND ANY AMENDMENTS THERETO, SHALL BE INCORPORATED INTO THIS AGREEMENT.. Subject to the above disclosures, Client agrees that any and all controversies that may arise between or among Client and NCS and/or IAR concerning Client's Account, any transaction or construction, performance or breach of this or any other agreement between Client and NCS and/or IAR, whether entered into prior, or subsequent to the date hereof, will be decided by arbitration. Any arbitration under this Agreement will be decided before the FINRA in accordance with FINRA rules. Judgment on arbitration awards may be entered in any court, state or federal, having jurisdiction. Notwithstanding the foregoing, no person will 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 a court a putative class action, who is a member of the putative class who has not opted out of the class with respect to any claims encompassed by the putative class action until (a) the class certification is denied; (b) the class is decertified; or (c) Client is excluded from the class by the court. Such forbearance to enforce an agreement to arbitrate will not constitute a waiver of any right under this Agreement except to the extent stated in this Agreement. 10

11 V. TERMINATION A. This Agreement may be terminated by NCS or the Client at any time effective upon receipt by the other party of a written termination notice (the "Termination Date"), and will be terminated automatically upon (i) notification of Client s death or official notice of legal incompetence, or (ii) termination of NCS s registration as an investment adviser. Termination of this Agreement will not affect (a) the validity of any action NCS or IAR have previously taken; (b) Client's, NCS s or IAR s liabilities or obligations for transactions initiated before termination; or (c) Client's obligation to pay any fees through the date of termination. Upon termination, neither NCS nor IAR will have any obligation to take any action with regard to the securities, cash or other investments in Client's Account(s), and FOLIOfn s normal brokerage fees and charges will apply to the Account(s). The provisions of Sections III and IV and any representations made herein shall survive termination of the Agreement. All actions taken by NCS or IAR hereunder, either before or after the death or incapacity of Client, but before receipt by NCS of information of such death or incapacity, shall be binding upon Client and Client s legal representatives, who shall hold NCS and IAR harmless from all liability arising from such action so taken. Upon receipt of Client s termination notice and unless transfer instructions are received, Client authorizes NCS to redeem all securities in the Account and hold only cash in the Account until further instructions are received from Client. Client understands that the Account remains subject to market declines during this process. B. Client will have five business days after execution of this Agreement to terminate the Agreement without payment for services. If Client terminates the Agreement after the five-day period and prior to the end of the initial calendar quarter, Client will be charged a prorated Advisory Fee, based upon the number of days during the calendar quarter up to and including the Termination Date. VI. MISCELLANEOUS PROVISIONS A. This Agreement shall be binding on and inure to the benefit of any successor of NCS and shall be binding upon the representatives, heirs and personal representatives of Client. This Agreement may not be assigned by either party without the express prior written consent of the other party, and except as otherwise provided herein with respect to ticket charges, may be amended only by a written instrument executed by NCS and Client, and accepted by IAR to the extent it affects IAR s obligations. B. This Agreement shall become effective only upon acceptance by NCS and IAR, and the date of this Agreement shall be the date of final acceptance. C. This Agreement and the Confidential Client Profile and Account Form represent the entire understanding of the parties with regard to the matters specified herein. D. Neither NCS nor IAR will advise Client or act for Client in any legal proceedings, including bankruptcies or class actions, involving securities held in the Account(s) or the issuers of those securities. E. Except as Client otherwise agrees, or as is required by law, NCS and IAR will keep confidential all information concerning Client's identity, financial affairs or investments. F. If any provision of this Agreement is or becomes inconsistent with any applicable law or rule, the provision will be deemed rescinded or modified to the extent necessary to comply with such law or rule. In all other respects this Agreement will continue in full force and effect. G. By signing this Agreement, Client represents to NCS that Client has the legal authority and capacity to enter into this Agreement. If this Agreement is entered into by a corporation or other entity, the signator represents that he or she is duly authorized to enter into this Agreement. If this Agreement is entered into by a Trustee or other fiduciary, such Trustee or other fiduciary represents that unless NCS has been informed in writing attached to this Agreement of any limitations on the scope of the investments authorized by the governing instrument of the Trust or Plan, or by any agreement or laws, there are no such limitations, and that such Trustee or other fiduciary has power to delegate under the governing instruments and/or laws, and that such Trustee or other fiduciary is duly authorized to enter into this Agreement. Client undertakes to advise NCS of any event which might affect such Trustee or other fiduciary s authority or the property subject to this Agreement. Each ERISA Client represents that it has specifically considered the role that the investment strategy and course of action contemplated by this Agreement will play in the Client s 11

12 investment portfolio as a whole, including consideration of (i) the risk of loss and the opportunity for gain (or other return) associated with the investment strategy and investment course of action; (ii) the composition of the Client s investment portfolio with regard to diversification; (iii) the liquidity and current return of the Client s investment portfolio relative to the Client s anticipated cash flow requirements; and (iv) the risk and return relationship of the Client s investment portfolio relative to the Client s investment objectives. Client acknowledges and agrees that NCS and IAR will rely on this representation in performing their duties under this Agreement. H. This Agreement shall be construed under the laws of the State of California without regard to choice of law in a manner consistent with the Investment Advisors Act of 1940 ("Advisors Act") and the rules and regulations of the Securities and Exchange Commission there under. I. All written communications regarding this Agreement shall be sent to the addresses designated on the signature page of this Agreement, unless subsequently specified otherwise in writing. J. Neither NCS nor IAR shall be required to take any action or render any advice with respect to the voting or exercise of other shareholder rights related to securities held in the Account(s), including, but not limited to, the voting of such securities in person or by proxy, the granting of any consents requested by the issuers of the securities or the exercise of dissenters rights with respect to such securities, or bankruptcy or the issuer of the securities. Client acknowledges that he, she or it retains any voting rights with respect to the securities and has the sole responsibility for obtaining any proxy materials. K. For ERISA Clients, NCS and IAR represent that they are fiduciaries as defined in ERISA in performing their duties under this Agreement but only to the extent of their responsibilities under this Agreement and only with respect to the Account. For ERISA Clients, NCS and IAR are expressly precluded from taking any action or rendering any advice with respect to the voting of proxies solicited by or with respect to issuers of securities held in a Client s Account, except to the extent that Client notifies NCS in writing that NCS has the responsibility and authority to vote such proxies. NCS obligations with respect to any such solicitation shall be limited exclusively to forwarding within a reasonable period of time to the plan s sponsor any materials or other information with respect to such solicitation received from the issuer or third parties and acting upon the express instructions of the plan s sponsor with respect to any such proxy. Client hereby approves investment of assets in the Account(s) in any registered, open-end investment company for which FOLIOfn or an affiliate of FOLIOfn serves as investment advisor and approves the investment advisory and other fees paid by each such fund in relation to the fees paid by the plan under this Agreement. To the extent that such investments otherwise would constitute a prohibited transaction under ERISA, Client (a) agrees that Client will take all actions necessary to assure that the conditions of U.S. Department of Labor Prohibited Transaction Exemption ( PTE ) 77-4 are satisfied; (b) approves the investment advisory and other fees paid by each of such investment companies in relation to the fees paid by the plan under this Agreement; and (c) acknowledges receipt of the current prospectus issued by each such investment company and other disclosures required under PTE 77-4, and that it is on the basis of such information that Client gives this approval. NCS agrees that any such affiliated fund investments will be made in conformance with PTE ERISA Client agrees to maintain any bond required under ERISA or other applicable law, and to include in its coverage NCS, IAR, NCS employees, NCS affiliates and NCS agents. Client acknowledges that FOLIOfn is not holding itself out or acting as NCS's agent in connection with this Agreement for any purpose except in providing brokerage and custodial services and is not a fiduciary as that term is defined in ERISA with respect to Client. SIGNATURES AND FEES ON THE FOLLOWING PAGES 12

13 SIGNATURE PAGES THIS AGREEMENT CONTAINS A PRE-DISPUTE ARBITRATION CLAUSE IN SECTION IV CLIENT HEREBY AGREES TO THE FEE SCHEDULE INDICATED BELOW: I. ADVISORY FEE: a. Percent of Assets: % Annually; Paid [Quarterly] b. Administrative Fee: $ paid Quarterly II. FOLIOfn ACCOUNT NUMBER(S): III. FORM ADV PART II Client hereby acknowledges receipt of a copy of NCS s Form ADV, Part II: (Please Initial) (a) at least 48 hours prior to signing this Agreement. (b) upon signing this Agreement. Client Signature (Primary) Client Name (print) Client Address City, State, Zip Client Signature (Joint) Client Name (print) Client Address City, State, Zip Date: Date: ACCEPTED: NEWPORT COAST SECURITIES, INC. By: Date: Title: Address: MacArthur Blvd. First Floor Irvine, CA ACCEPTED AND AGREED: (Advisor) Print Name (Advisor) Signature Date: Address: PLEASE EXECUTE ALL NECESSARY NEW ACCOUNT FORMS AND ATTACH TO THE UMA AGREEMENT 13

14 NEWPORT COAST SECURITIES, INC. PRIVACY POLICY Our Commitment to Your Privacy: It is the policy of Newport Coast Securities, Inc. to protect the confidentiality and security of information we collect about our customers. Non-public information ( Information ) about you will not be shared with third parties without your consent, except for the specified purposes described below. This notice describes the Information we may gather from you and the circumstances under which we may share it. Why We Collect and How We Use Information: Newport Coast Securities, Inc. limits the collection and use of Information to the minimum required to offer and deliver products and services to you. Such services include maintaining your account(s), processing transactions and administering our business. How We Gather Information: We get most Information directly from you, when you apply for, access and use financial products and services offered by Newport Coast Securities, Inc., whether in person, by telephone or electronically. We may verify this information or get additional information from consumer reporting agencies or public sources. This Information may relate to your finances, employment, avocations or other personal characteristics, as well as transactions and interactions with our clearing firm, others or us. How We Protect Information: Our employees are required to protect the confidentiality of Information and to comply with established policies. They may access Information only when there is an appropriate reason to do so, such as to administer our products and services. We also maintain physical, electronic and procedural safeguards to protect Information that comply with applicable laws. Disclosure of Information: We may disclose any Information to, or as directed by our clearing firm, or when we believe it necessary for the conduct of our business, or where required by law. Information may be disclosed for audit and research purposes, to attorneys or other professionals, or to law enforcement and regulatory agencies, for example, to help us prevent fraud or money laundering. In addition, we may disclose Information to third party service providers, (i) to enable them to provide business services for us and our clearing firm, such as performing computer related or data maintenance or processing of services, (ii) to facilitate the processing of transactions requested by you. We will not make any disclosures of Information to other companies who may want to sell their products or services to you. We do not sell customer lists, and we will not sell your name to another company for marketing purposes. It is the policy of Newport Coast Securities, Inc. to require all third parties, other than our clearing firm or product providers, that receive Information to sign strict confidentiality agreements. If you decide to close your account(s) or become an inactive customer, we will adhere to the privacy policies and practices as described in this notice. What Are My Rights To Opt Out of Disclosure, and How Can I Exercise Them: In certain circumstances, the law allows you to opt out of our sharing nonpublic personal information about you with affiliated and non-affiliated companies; that is, you may direct us not to make such disclosures. We do not currently share information about you with any affiliate or third party that triggers this opt out right; therefore, there is no need for you to opt out. If in the future we desire to disclose your information in a way that is inconsistent with this policy, we will notify you in advance and provide you with the opportunity to opt out of such disclosure. Access To and Correction of Information: Please contact our Compliance Department at if you desire to review any file we may maintain of your personal Information or if you have any questions regarding this policy. If you notify us that the Information is incorrect, we will review it and amend our records if appropriate. If we do not agree that the Information is incorrect, you may submit a short statement of dispute, which we will include in future disclosures of the disputed information. Information collected in connection with, or in anticipation of, any claim or legal proceeding will not be made available. We reserve the right to change this Privacy Policy. The examples contained within this Policy are illustrations, and they are not intended to be exclusive. This notice complies with SEC regulations regarding consumer privacy. You may have additional rights under other foreign or domestic laws that may apply to you. 14