EF Hutton Managed Account Service Updated October 19, 2017
This Client Agreement (the “Agreement”) specifies the terms and conditions under which EF Hutton Investments LLC (“EF Hutton”), will manage the account of the client (“you”) enrolled in the EF Hutton managed Account Service (the “Service”). By completing the Service’s online account application and agreeing to the Terms of Service contained therein (the “Account Application”), which is incorporated into this Agreement by reference, you agree to the terms of this Agreement.
By completing the Account Application, you agree to establish a discretionary managed investment account (Account) with a FINRA-registered broker-dealer selected by EF Hutton. With respect to the management of your Account, based on the information you provide, EF Hutton will suggest a portfolio based on your risk tolerance, time frame goals and investment knowledge. EF Hutton will provide discretionary investment management services for the Account by determining the appropriate asset allocation for your investment and risk profile and investing the Account assets in (i) exchange-traded funds managed by unaffiliated investment managers, (ii) mutual funds managed by unaffiliated investment managers and (iii) individually managed sub-accounts managed by third party advisors based on the investment and risk profile you selected as part of the Service’s online account opening process. EF Hutton will act as the primary point of contact with respect to Account maintenance and asset allocation. Account management features such as change of contact information or other Account information will be conducted through the Service website. Except in unusual situations, the FINRA-registered broker-dealer selected by EF Hutton, will not have direct contact with EF Hutton clients and will not advise EF Hutton clients with regard to investment selection or strategies. The FINRA-registered broker-dealer will provide custodial and related recordkeeping and reporting services at no additional fee. Your shares of mutual funds will be held in your name or for your benefit in the name of your custodian or other appointed fiduciary, or in the name of the FINRA-registered broker-dealer or its agents, on the records of each mutual fund’s transfer agent. ETF investments will be held in street name by the Broker Dealer or at a securities depository on its behalf. You will be sent shareholder communications relating to the funds held in your Account as well as Account-related communications (or instructions on how to access such communications electronically via the Service’s website) electronically via the email address you designate in the Service’s online account opening process, which may be updated by you from time to time through the Service’s website.
During your participation in the Service, your Account will not be available for brokerage activities outside of activities directed by EF Hutton, including, but not limited to, margin trading or trading of securities by you or any of your designated agents.
Brokerage account services are offered through EF Hutton, Inc. You can elect to subscribe to the EF Hutton Daily Market Report that provide stock ideas based on technical indicators. Subscription includes a right to no-commission trading through a third-party FINRA registered broker-dealer (the “Designated BD”) designated by EF Hutton. If I execute transactions with the Designated BD, I will be doing so on a self-directed basis – neither EF Hutton nor the Designated BD will solicit any specific transaction or manage or advise me except for guidance I receive from the Daily Market Report. To execute trades, I will have to open an account with the Designated BD which involves their own account approval process and administration. The Designated BD will pass thru to me the exchange fees and fees charged by its clearing agent. Per an agreement with EF Hutton, the Designated BD will not charge me a commission. I agree to indemnify and hold EF Hutton harmless in connection with any transactions I execute with the Designated BD.
I am also giving EF Hutton authority to bill my account /accounts listed below. This authority is also revocable by me at any time upon notification from me. Fees are subject to change with advanced notice as set forth in the Brochure.
I also understand that all investment assets are held by a third-party custodian selected by EF Hutton and that I will be subject to the custodian agreement executed by EF Hutton.
This agreement is cancellable upon notice by either party.
This Agreement is exercisable in paper or electronic form. Check below, or indicated in electronic forms, for each service opening. Subscription to EF Hutton Daily Market Report and Right to Execute Transactions with Designated BD without Commission.
EF Hutton offers the following plans:
o EasyTrade Stocks only Plan $29.95 – Unlimited Stock Trading for the month.
o EasyTrade Stocks only Plan $295.00 – Unlimited Stock Trading for the year.
o EasyTrade Options only Plan $49.95 – Unlimited Option Trading for the month.
o EasyTrade Options only Plan $549.00 – Unlimited Option Trading for the year.
o EasyTrade Stocks and Options Plan $64.95 – Unlimited Stock and Options trading for the month.
o EasyTrade Stocks and Options Plan $695.00 –Unlimited Stock and Options trading for the year.
I agree to appoint EF Hutton as my investment advisor to provide investment advisory services for my Account. I understand that my Account risks loss of value over any short or long-term time period and there is no guarantee of projected profits
Based on the information you provide as part of the online account opening process and/or thereafter, including but not limited to your financial situation and assets, investment objectives, risk tolerance, and planned investment time horizon, EF Hutton will suggest an investment and risk profile for your Account. This will serve as the basis for the discretionary investment management services that EF Hutton will provide for your Account. EF Hutton will provide you with the opportunity to provide information about a variety of factors, including but not limited to those noted above; in the event you fail to provide EF Hutton with complete information, EF Hutton will base its proposed investment and risk profile on the information you provided and assumptions, based on information provided by similarly situated investors for the information you failed to provide. You hereby agree to the use of such assumptions in the instance that you fail to provide EF Hutton with complete information. For purposes of using assumptions, similarly situated investors are those investors that most closely match you in terms of core demographics, investing preferences, risk tolerance and financial situation.
You may either select the investment and risk profile proposed by EF Hutton based on your responses and/or related assumptions or you may select another investment and risk profile. As you select your investment and risk profile, you understand and acknowledge that you are directing EF Hutton to manage your Account according to that profile and that you, not EF Hutton, are responsible for such direction and do so at your own risk. EF Hutton will provide discretionary management consistent with the investment and risk profile you have selected. Regardless of whether you select the investment and risk profile proposed by EF Hutton or a different investment and risk profile, you continue to be responsible for notifying the Service of any changes to your personal circumstances or goals that may affect your investment and risk profile. You understand and acknowledge that frequently updating your investment and risk profile can result in losses to your Account value as a result of frequent reallocation of assets. Accordingly, it is advised that you refrain from updating your investment and risk tolerances more than necessary.
You represent that the information you provided as part of the Service’s online account opening process, or thereafter in conjunction with the Service, is, or will be, accurate and complete in all respects, and you agree that EF Hutton shall bear no responsibility for investment management decisions or other actions taken on the basis of any incomplete, misleading, or incorrect information you supply. You agree to promptly notify the Service of any change in your information, including any requested modifications to existing restrictions, and of any change that may affect the manner in which EF Hutton should allocate or invest the assets in your Account. You have the opportunity to impose reasonable restrictions on the management of your Account, and to change such restrictions, subject to the Service’s acceptance of any such restriction or change. EF Hutton is not responsible for the impact of any such restriction on your Account, and you acknowledge that your Account performance may vary from that of the other accounts managed by the Service with the same investment and risk profile as a result of any such restriction. Compliance with any such restrictions will be determined on the date of purchase only, based on the price and characteristics of the investment on the date of purchase, and a restriction will not be deemed breached as a result of changes in the value or status of an investment following purchase. Restrictions will be reevaluated on an as-needed basis, including, but not limited to, as a result of changes in the underlying funds or models, which may result in the denial of the restriction that was previously accepted. If you make any changes to your investment and risk profile at any time that your Account has a restriction in place and would like that restriction to remain following the change in your profile, you must make a request to the Service using the EF Hutton website. Please note: If you specify any restrictions or limitations on your Account, this may result in a delay in the management of your Account, and you may be notified that your Account cannot be managed with those restrictions. Your Account’s performance may differ from the performance of Accounts without restrictions, possibly producing lower overall results.
Services provided by EF Hutton include investment guidance regarding appropriate buys and sells of ETFs, mutual funds and other securities, discretionary execution of those trades through FINRA-registered broker-dealers selected by EF Hutton, digital advisor services, and monthly or quarterly performance statements – depending on account activity.
You are giving EF Hutton limited trading authority which may be revoked at any time, through a FINRA-registered broker dealer selected by EF Hutton for the purpose of providing investment services.
Account Opening Information
In order to enroll in the Service, you must initially fund your Account with at least $2,500 in cash for a Standard account, and after your Account is opened, you must continue to maintain a minimum balance. Failure to maintain the appropriate minimum balance may result in the closure of your Account. To help the U.S. government fight the funding of terrorism and money-laundering activities, federal law requires that EF Hutton verify your identity. In order to do this, we will require that you provide us with your name, your date of birth, your address, and a government-issued identification number before opening your Account. In certain circumstances, EF Hutton may obtain and verify this information with respect to any person(s) authorized to effect transactions in an Account. Your Account may be restricted or closed if EF Hutton cannot verify this information for any reason. EF Hutton will not be responsible for any losses or damages (including, but not limited to, lost opportunities) resulting from any failure to provide or verify this information, or from any restriction placed on, or the closing of, your Account. Any information you provide in conjunction with the Service may be shared with affiliates and third parties of EF Hutton for the purpose of validating your identity, and may be shared for other purposes in accordance with the privacy policies of EF Hutton. Any information you provide in conjunction with the Service may be subject to verification.
The Service is not available to foreign investors. In order to open an Account, you must (i) be a U.S. resident (including a U.S. resident alien), (ii) have a valid U.S. permanent (non-P.O. Box) mailing address (with the exception of U.S. military personnel residing outside the U.S. with Army Post Office [APO] or Fleet Post Office [FPO] addresses), and (iii) have a valid U.S. taxpayer identification number. If you or another individual associated with your Account resides outside the United States and you have an existing relationship with EF Hutton, EF Hutton may at any time in its sole discretion terminate that relationship or modify your rights to access any or all account features, products, or services. By opening your Account and enrolling in the Service, you acknowledge that EF Hutton does not solicit offers to buy or sell securities or any other product or service and that they do not offer investment advice to any person in any jurisdiction where such offer, solicitation, purchase, or sale would be unlawful under the laws of such jurisdiction.
All Accounts are subject to relevant state law. Not all states and jurisdictions recognize all account features by EF Hutton. You should consider your local laws and regulations when deciding to open an Account and what type of Account to open.
Residents of Louisiana: If you are opening a joint account in Louisiana, you should be aware that Louisiana does not recognize certain types of joint account registrations. As a result, EF Hutton will establish a joint account only when directed by you to do so and only when you direct EF Hutton to establish such account as tenants in common. In connection with your direction to establish this type of joint account, each account owner expressly and irrevocably renounces the right to concur in the disposition or alienation of the account by the other account owner for the entire time the account is open, or for the longest term allowed by applicable law.
Wisconsin Marital Property Act: Married Wisconsin residents should be aware that no provision of any marital property agreement, unilateral agreement, or court decree under Wisconsin’s Marital Property Act will adversely affect a creditor’s interest unless, prior to the time credit is granted, the creditor is furnished a copy of, or given complete information about, that agreement or decree.
An annual gross advisory fee will be assessed based on a percentage of the market value of assets in your Account. All fees are subject to change. The annual gross advisory fee is calculated daily and applied on a quarterly basis, in arrears, and is due at the end of each quarter. The annual gross advisory fee covers all advisory services provided in connection with your Account; EF Hutton’s investment management team’s ongoing management of your Account, including any trading costs and commissions effected through the FINRA-registered broker-dealer; EF Hutton’s suggestion of your investment and risk profile and support for your Account; brokerage, clearing, and custody services provided by the FINRA-registered broker-dealer; and the communications sent to you to keep you informed about your Account.
A. Standard Automated Investment Management Account (Standard Account)
The minimum account opening balance is $2500. The Standard Account features are access to the risk based automated portfolios, E-Mail statement and access to investment adviser via interactive online website chat function.
Average Daily Account Balances up to $99,999: 0.35% Fee
B. Premium Automated Investment Management Account (Premium Account)
The minimum investment amount for the Premium Account is $100,000. The Premium Standard Account features are access to the risk based automated portfolios, E-Mail statement and access to investment adviser via interactive online website chat function.
Average Daily Account Balance greater than or equal to $100,000: 0.30% Fee
C. Premium Advisor Based Investment Management Account (Premium Account)
The minimum investment amount for the Premium Account is $500,000. The Premium Advisor Account features are access to the risk based automated portfolios, E-Mail statement and access to investment adviser via interactive online website chat function. Clients will also have access to a dedicated financial advisor and Financial Planning.
Average Daily Account Balance greater than or equal to $500,000: 0.85% Fee
Fee schedules are subject to change at any time. Clients will be provided at least thirty (30) days written notice, which may be given via electronic mail. Our fee schedule is fixed and non-negotiable.
Statement of Understanding.
I also understand that all investment assets are held by a third-party custodian selected by EF Hutton and that I will be subject to the custodian agreement executed by EF Hutton. A copy of said agreement can be obtained from the third party custodian.
This agreement is cancellable upon notice by either party, and it is assignable unless I object within 30 days of notice by EF Hutton. I have five days to cancel this agreement, if it has not been available to me at least 48 hours before signing, without incurring any fees or penalties.
This Agreement is exercisable in paper or electronic form. Check below, or as indicated in electronic forms, for each service opening.
PLEASE SIGN IN THE SPACE PROVIDED BELOW – OR INDICATE AGREEMENT THROUGH ELECTRONIC MEANS AS DESCRIBED IN THE CLIENT AGREEMENT AND ON THE WEBSITE.
Primary Client Signature_____________________________ Date__________________
Joint Client Signature_____________________________ Date__________________
Investment Adviser Name____________________________________________________
Investment Adviser Signature______________________________Date_______________