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Discretionary Investment Advisory Agreement


This Investment Advisory Agreement (“Agreement”) is made and entered into between HOLLAND ADVISORY SERVICES, INC. (hereinafter referred to as the “Adviser”), a Florida Corporation, having its principal place of business at 700 West Granada Boulevard, Ormond Beach, Florida 32174 and                                              (hereinafter referred to as “Client”) whose address is                                                                              . As of the date of this Investment Advisory Agreement, all previous Investment Advisory Agreements between Adviser and Client are terminated.


WHEREAS, Adviser is a Registered Investment Adviser in the business of providing investment advisory services; and

 

WHEREAS, Client desires to retain Adviser for the purpose of obtaining personalized investment advisory services in accordance with the definitions, terms, and conditions of this Agreement. 

 

NOW THEREFORE, in consideration of the premises and mutual promises contained in the Agreement, the parties agree as follows:

 

DEFINITIONS:  Client and Adviser agree to these definitions for purposes of this Agreement:

  1. "Adviser" means HOLLAND ADVISORY SERVICES, INC., and any successor entity formed by merger or acquisition, including any company that may acquire a majority of the stock of Adviser.  Adviser is a registered investment adviser.
  2. “Brokerage Account” means any account established by Client with assistance from Adviser to hold and transact securities that incorporate Adviser’s investment strategies.
  3. “Portfolio” may consist of cash, mutual funds shares, stocks, bonds, ETFs, and other securities designated for management by Adviser in Client’s Brokerage Account under the terms of this Agreement, which are subject to withdrawal and addition as directed by Client. 

 

ADVISORY SERVICES: Client hereby retains Adviser, and Adviser hereby agrees to provide investment management services with respect to certain assets of Client (the “Portfolio”).  Adviser may invest and reinvest the assets held in Client’s Portfolio in securities of any kind, or cash or cash equivalents, unless expressly restricted in writing by Client.  All investments shall be made in accordance with Client’s investment objectives and risk tolerance, which will be further defined in a Suitability Questionnaire or other written documentation.  Client has the sole authority to accept or reject any advice from Adviser.

 

TRADING AUTHORIZATION: Client hereby grants to Adviser discretionary authority and limited power-of-attorney to make investment decisions without Client’s prior consent.  The discretionary authority and limited power-of-attorney apply to Client’s Portfolio(s) indicated in Addendum I of this document, or through any amendments that may apply to this Agreement.

 

CUSTODY OF ASSETS: Adviser shall not take possession of or maintain custody of Client’s funds or securities but shall simply monitor the holdings within the Portfolio and make trades within the Portfolio pursuant to the authorization granted by Client.  Possession and custody of said funds and/or securities shall be maintained by an independent custodian (“Custodian”).  Adviser’s primary custodial relationship is with Fidelity.  Adviser may be deemed to have custody of Client’s assets, pursuant to SEC rule 206(4)-2(c)(1), if Adviser directly or indirectly holds Client funds or securities or has the authority to obtain possession of them.  Additionally, Adviser may have custody of Client assets if password access to Client’s account(s) provide(s) Adviser with the ability to withdraw funds or securities or transfer them to an account at Custodian not in Client’s name.

Adviser is authorized to give instructions to Custodian with respect to all investment decisions regarding the assets, and Custodian is hereby authorized and directed to effect transactions, deliver securities, and otherwise take such actions as Adviser shall direct in connection with the performance of Adviser’s obligations.  Client agrees to accept responsibility for the prompt delivery of cash or securities to settle security transactions affected on behalf of Client by Adviser. 

 

ADVISER OBLIGATIONS AND RESPONSIBILITIES:  Adviser will perform the following duties as follows:

  1. Adviser will provide advice and act in a fiduciary capacity with respect to Client Portfolio(s). 
  2. Account Establishment.  Adviser will prepare for Client signature all the necessary documents to transfer Client’s investment holdings to be covered by this Agreement.  This Agreement covers the account(s) listed on Addendum I.
  3. Client Consultation.  Adviser will consult with Client regarding Client’s investment objectives, needs, and parameters.  Adviser will identify accounts that can be combined for simplification purposes.  Adviser will perform an initial assessment of Client’s investment risk tolerance.  Client and Adviser will identify any limitations on the types of investments to be held, sold, or purchased.  Client and Adviser will identify Client’s investment time horizon and will identify the timing and amounts of Client’s withdrawal needs from Client’s Portfolio(s).
  4. Portfolio Design.  Adviser and Client will select an appropriate investment strategy for each of the Client account(s) that is consistent with Client’s investment objectives and risk tolerance.  Adviser will analyze Client’s current holdings and will incorporate those existing investment holdings, where appropriate, in the selection and modification of the portfolio strategy.   
  5. Monitoring and Meetings.  Adviser monitors the markets and Client’s asset holdings on a continual basis. Adviser will meet to discuss with Client, at least annually, to review and explain Portfolio(s) performance and any other related issues.  Adviser shall also be available on a reasonable basis for telephone, meeting, and email communication, as needed.
  6. Upon Client’s request, Adviser may refer Client to attorneys or other third-party professionals, who are known by Adviser. All such referrals are made at “arms-length” and no compensation is shared between Adviser and any such third parties. Client is not obligated to use any particular professional.

 

CLIENT OBLIGATIONS AND RESPONSIBILITIES:  Client agrees to discuss his/her needs, goals and projected future needs candidly with Adviser and to keep Adviser informed of changes in his/her situation. Client agrees to set forth his/her investment objectives in a Suitability Questionnaire, which highlights various factors, including, but not limited to Client’s: (1) liquidity needs, (2) risk tolerances, (3) investment time frames, and (4) tax status.  Client acknowledges that Adviser cannot adequately perform its services on Client’s behalf unless Client performs such responsibilities on his/her part and that Adviser’s analysis and recommendations are based, in-part, on the information provided by Client.

Client agrees to permit Adviser to consult with and obtain information from his/her accountant and/or attorney, which may be relevant in development of and maintaining Client’s Portfolio.  It is at the Adviser’s discretion to determine the value of the information received from Client’s accountant and/or attorney, and Adviser is under no obligation to rely solely on this information.

 

CONFIDENTIALITY:  All information furnished by either party to the other, including their agents and employees, shall be treated as confidential and not disclosed to third parties, except as may be required by law, or in the attainment of providing services under this Agreement, or upon the prior written approval of the other party to this Agreement.

 

BASIS OF ADVICE: Client acknowledges that Adviser obtains information from a wide variety of publicly available sources and that Adviser has no sources, and does not claim to have sources, of inside or private information.  The recommendations developed by the Adviser are based upon its professional judgment and cannot be guaranteed.

 

FEES AND CHARGES:  For Adviser’s services set forth in this Agreement, Client will pay Adviser an investment advisory fee in accordance with Adviser’s Investment Advisory Fee Schedule (Addendum I).  Separate and apart from Adviser’s investment advisory fee, Client will pay all expenses related to the Portfolio(s), including, but not limited to, brokerage and other execution costs, custody fees, and margin fees assessed by third parties.  Adviser will attempt to keep transaction and investment costs to a minimum but cannot guarantee that the costs incurred by Client will be the lowest available.  Adviser receives no commissions related to the transactions executed on behalf of Client in the Brokerage Account and employees receive salary-based compensation from Adviser.

 

PAYMENT AUTHORIZATION: Client authorizes the management fee payment to be debited from his/her Portfolio(s), unless the Custodian does not accept debit transactions or other arrangements have been made.  The fee will be paid: (1) from free credit balances, if any, in the Portfolio, and (2) from the liquidation or withdrawal of Client’s shares from any money market investment.  To the extent that such assets are insufficient to satisfy payment of Adviser’s fee, a portion of the Portfolio may be liquidated.  Adviser will send an invoice to Custodian indicating the amount of the management fee currently due.  The custodial statement will reflect the deduction of Adviser’s management fees, as well as any other transactions or activity that occurred.

 

If an assigned billing account is not provided by Client, a quarterly invoice will be delivered to Client’s address of record.  The payment for advisory services must be submitted to Holland Advisory Services, Inc. by the 30th day following the invoice date for management services to continue.

 

It is Client’s responsibility to verify that the management fee calculation is correct.  Custodian will not determine if Adviser has properly calculated the fee.

 

TERMINATION:  Client has the right to terminate this Agreement, without penalty, within five (5) days after entering into this Agreement.  Thereafter, either party, upon fifteen (15) days’ written notice, may terminate this Agreement at any time.  This will allow Adviser sufficient time to finalize any Client requests, transactions, enable the delivery of final statements, and release of documents.

In the event of termination after five (5) days from the execution of this Agreement, Client will be entitled to a pro-rated refund of any prepaid quarterly advisory fee.

 

TERM:  This Agreement and the services provided hereunder shall be ongoing until terminated by either party as set forth in the Termination clause.

 

NON-EXCLUSIVE ADVISORY SERVICES: It is understood that Adviser performs investment advisory services for various clients, and Client understands and agrees that Adviser may give advice and take action with respect to any of its other clients, which may differ, from advice given to Client.  With regard to time spent or action taken on Client’s Portfolio and those of other clients, it is Adviser’s policy, to the extent practical, to allocate investment opportunities on a fair and equitable basis to all clients.  

         

Client acknowledges that Adviser, its directors, officers, affiliates and employees, and other clients of Adviser, may, at any time, acquire, increase, decrease or dispose of portions of investments which are at the same time being acquired, held, or disposed of for the Portfolio.  Adviser is under no obligation to initiate the same transaction, or recommendation for Client in any security or other asset which the Adviser, its directors, officers, affiliates and employees, and other clients of Adviser may have purchased or sold for their own account(s).

 

Nothing in this Agreement shall limit or restrict Adviser or any of its directors, officers, affiliates or employees from buying, selling or trading in any securities or other assets for its or their own account or accounts.

 

In no event shall Adviser be obligated to affect any transaction for Client which would violate any applicable federal or state law, rule, or regulation, or the rules or regulations of any regulatory or self-regulatory body.

 

PROXIES: Adviser is hereby expressly precluded from voting proxies.  Client understands and agrees that Client retains the right to vote all proxies, which are solicited for securities held in the Portfolio.  Any proxy solicitation received at Adviser’s place of business will be immediately forwarded to Client for his/her evaluation and decision.

 

CONFLICTS OF INTEREST: A conflict of interest exists when a reasonable person would conclude that a financial interest affects an adviser or firm’s judgment when making recommendations. In keeping with its fiduciary duty, Adviser is required to avoid conflicts of interest and/or disclose and properly manage conflicts, after obtaining the client’s informed consent, when providing financial advice. When acting under a conflict of interest, Adviser continues to have a duty to act in a client’s best interest and place the client’s interests above those of Adviser. Accordingly, Adviser shall exercise fiduciary restraint in the face of incentives and conflicts in order to act in the client’s best interest under this Agreement. Conflicts of interest which could affect the client relationship with adviser, include: 

 

         Affiliated Entities: The following entities are affiliated and share common ownership with Adviser: Holland Insurance Services, Inc.; Holland, Tacinelli, CPAs, P.A.; Holland Tax & Accounting, Inc.; David D. Holland, CPA; Holland Productions, Inc. d/b/a PlanStrongerTV™; and Holland Business Brokers, Inc. Recommendations for courses of action, services, or products through one or more of these entities creates an incentive to make recommendations solely for the increase in revenue.

 

          Non-Exclusive Services: Advice given will be based upon Client’s personal circumstances at the time the services are rendered. Client understands that Adviser provides investment advisory services for numerous clients at different times, which may vary in scope and complexity. Accordingly, Adviser may give advice and act with respect to any of its other clients that may differ from advice given to Client.

 

          Limitation on Brokerage Services:  Adviser conducts primary brokerage services through Fidelity Investments.  As a result of this relationship, Adviser is limited in the products and/or services we offer. 

 

          Receipt of Incentives:  Adviser may receive services from third parties, including but not limited to, marketing, training, technology, and/or education.

 

          Adviser Accounts: Adviser, its directors, officers, affiliates, and/or employees, may, at any time, acquire, increase, decrease, or dispose of portions of investments which are at the same time being acquired, held, or disposed of for client portfolios.  Adviser is under no obligation to initiate the same transaction, or recommendation for a client in any security or other asset which Adviser, its directors, officers, affiliates, and/or employees, and other clients of Adviser may have purchased or sold for their own account(s).

 

          Business Relationships: Adviser or its affiliated entities may have business relationships with third parties to which Adviser may refer clients. This creates an incentive for Adviser to make referrals to these parties in lieu of others solely for the continued business, even though no referral compensation is shared between parties. 

 

              Rollover Recommendations: Adviser has a conflict of interest in recommending you roll over an employer-sponsored retirement plan or IRA to another IRA because Adviser will earn additional revenue if you roll your assets but would not earn fees if you did not.

 

               Transfer Recommendations: Adviser has a conflict of interest in recommending that you transfer your existing brokerage, insurance, or mutual fund account(s) to an account under Adviser’s management because Adviser will earn revenue if you transfer but would not earn fees if you did not.

 

               Investing Reverse Mortgage Loan Proceeds:  Holland Mortgage Services, Inc., an entity once affiliated with Adviser, may have originated reverse mortgage loans for clients of Adviser.  If a client received funds from a reverse mortgage loan obtained through Holland Mortgage Services, Inc. or any other entity, Adviser may not invest the proceeds.

 

Spousal Conflict:  A conflict of interest arises when spouses, who are both existing clients of Adviser, wish to continue their advisory relationship, despite a future or ongoing dissolution of marriage.  If this situation arises, Adviser will determine whether financial services can be provided without compromising fiduciary duty and professional abilities to act in each respective client’s best interests.  If Adviser determines that a relationship cannot continue with both clients, it will terminate its relationship with one or both clients. 

 

CONSENT TO CONFLICTS OF INTEREST: Client(s) understand(s) Adviser’s conflicts of interest and
the business practices that give rise to such conflicts and give(s) informed consent, by signing this Agreement, to the conflicts described herein. By signing this Agreement.

 

ACKNOWLEDGMENT OF REGULATORY DISCLOSURES: Client acknowledges receipt of Part 2 of Adviser’s Form ADV (Adviser’s Disclosure Brochure) in accordance with Rule 204-3 under the Investment Advisers Act of 1940, as well as Adviser’s Privacy Policy and Form CRS, prior to or at the time of the signing of this Agreement.

 

LIMITATION OF LIABILITY: Since the services referred to herein are advisory in nature, Client expressly understands and agrees that Adviser shall not be held liable in any way relating to the performance of any investment vehicle utilized by Client; including, any outcome of a decision made in connection with the full or partial implementation of any of the recommendations made by Adviser, provided that, Adviser has complied with all applicable federal and state laws and/or regulations regulating the provision of investment advisory services.

 

Client agrees that, in the absence of fraud, willful misconduct, or willful negligence on the part of Adviser, Adviser shall not be responsible in any way, whatsoever, for any loss incurred by reason of any act or omission of Client, any custodian, or any brokerage firm.  Client does not waive any rights under the Investment Advisers Act of 1940, the Florida Securities and Investor Protection Act, or Chapter 517 of the Florida Statues.  However, Client understands that profits cannot be assured on any transaction, and neither Adviser’s acceptance of Client’s accounts for management, nor any other provision of this Agreement, shall be considered a guarantee that the overall investment effort will be profitable, or any specific result will be achieved.  It is further understood that Adviser is acting as the agent of Client and other property in the Portfolio is held and traded solely at and for the risk of Client.

 

In addition, Client agrees that Adviser shall have no liability to Client or any other person for any loss or other harm to any property in the Portfolio, whether held in the custody of Custodian, or any other person resulting from the insolvency of Custodian, or any acts of the agents or employees of Custodian, regardless of whether or not the Securities Investor Protection Corporation (“SIPC”) or any other insurance, which may be carried by Custodian, covers the full amount of such loss.  Client understands that SIPC provides only limited protection for the loss of property held by a custodian.

 

Adviser shall not be liable or responsible for any act or failure of any broker, bank or similar agent utilized by Adviser effecting any transaction on Client’s behalf, or for the financial solvency of any such broker, bank or agent.

 

Adviser shall not be held liable for Client’s failure to inform Adviser, in a timely manner, of any material changes in Client’s financial circumstances, which might affect the manner in which Client’s assets are allocated.

 

Federal and state securities laws impose liabilities, under certain circumstances, on persons who act in good faith and, therefore, nothing in this Agreement shall, in any way, constitute a waiver or limitation of any rights that Client or Adviser may have under federal and state securities laws. 

 

SEVERABILITY:  If any term, provision, duty, undertaking or obligation of this Agreement shall be held or made non-enforceable by a statute, rule, regulation, decision of a tribunal or otherwise, such provision shall be automatically reformed and construed so as to be valid, operative and enforceable to the maximum extent permitted by law or equity, while most nearly preserving its original intent.  The invalidity of any part of this Agreement shall not render invalid the remainder of this Agreement and, to that extent, the provision of this Agreement shall be deemed to be severable.

 

ASSIGNMENT:  Agreement is not assignable without consent of all parties.

 

ARBITRATION:  Any controversy arising out of or relating to this Agreement or the breach thereof, will be settled by arbitration in accordance with the American Arbitration Association’s code of arbitration rules and procedures then in effect.  Client understands that this agreement to arbitrate does not constitute a waiver of the right to seek a judicial forum, where such a waiver would be void under state or federal securities laws.  The award of the arbitration, or a majority of it, will be final, and judgment upon the award rendered may be entered in any state or federal court having jurisdiction.  At least one member of the panel must have five years’ experience in the financial services industry.  Arbitration of any other hearing or legal proceeding between Adviser and Client will take place in a mutually agreed upon location.  It is further understood and agreed to that, pursuant to the above arbitration clause:  1. arbitration is final and binding on all parties; 2. parties are waiving their right to seek remedies in court, including the right to jury trial, except where such waiver would be void under state or federal securities law; 3. pre-arbitration discovery is generally more limited than and different from a court proceeding; 4. the arbitrator’s award is not required to include factual or legal reasoning and any party’s right to appeal or seek modification of rulings by the arbitrators is strictly limited; 5. the panel of arbitrators will include a minority of arbitrators who were or are affiliated with the securities industry.

 

No person shall bring a punitive or certified class action to arbitration, or seek to enforce any pre-dispute arbitration agreement against any person who has initiated in court a punitive class action, or is a member of a punitive class who has not opted out of the class with respect to any claim encompassed by the punitive 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.

 

NOTICES:  All notices required or permitted to be given under this Agreement will be sent by certified mail, if to Adviser at: 700 West Granada Boulevard, Ormond Beach, FL 32174; or, if to Client, at Client’s last known address contained in Adviser’s files.

 

CAPTIONS: Paragraph headings are for convenience only and are not of substantive effect.

 

ENTIRE AGREEMENT:  This Agreement contains the entire understanding of the parties with respect to the subject matter contained herein.  Any oral understandings are incorporated and merged into Agreement.  No representations were made or relied upon by either party except as set forth herein.  This Agreement may not be changed unless Client and Adviser agree to the change in writing.  The validity, interpretation, and performance of this Agreement will be governed by and construed under the laws of Florida, and the rules of Securities and Exchange Commission in a manner consistent with the Investment Advisers Act of 1940, and the rules and regulations promulgated thereunder.

 

EXECUTION: I/We have read the above Agreement and the Parties hereto have duly executed this Agreement this              day of              20              .


By:                                                                              Client Signature (Owner/Trustee)                                                                              Client Name (Print or Type)


By:                                                                              Client Signature (Owner/Trustee)                                                                              Client Name (Print or Type)


Holland Advisory Services, Inc. Registered Investment Adviser


By:                                                                              Investment Adviser Representative Signature                                                                              Investment Adviser Representative Name


By:                                                                              President / Compliance Signature                                                                              President / Compliance Name and Title



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Addendum I
Adviser’s Investment Advisory “Standard” Fee Schedule

Investment advisory fees are billed in advance for each quarter and are calculated as follows: [(number of days in the quarter) / (number of days in the year)] X [applicable annual fee percentage] X [market value on the last day of the previous quarter]. 

   

The fee for the first partial quarter is prorated based on the number of days assets are in the account and are calculated as follows: [(prorated days in the quarter) / (number of days in the year)] X [applicable annual fee percentage] X [market value on the last day of the first partial quarter]. In the event of termination, the pre-paid quarterly fee will be refunded based upon the number of days remaining in the quarter after termination:  [(prorated days remaining in the quarter) / (number of days in the year)] X [applicable annual fee percentage] X [market value on the last day of the previous quarter].

 

Advisory fees are negotiable.  Holland Advisory Services, Inc. generally charges an annual fee based on the total value of Client assets we manage, complexity, and the appropriate strategy that is chosen.  The Adviser’s minimum account size for a client relationship is $40,000.  However, to accommodate situations where it is desired to consolidate all accounts with a single Adviser, the firm will accept account sizes below $40,000. 

 

The applicable annual fees available for the Indexed Strategic, Active Strategic and Tactical Growth Strategies are shown below. 

 

Indexed Strategic Portfolio Strategies: The annual fee is between 1.0% and 2.0% and has been designed for account sizes below $40,000.  The following strategies are offered:

  1. Moderately Conservative
  2. Moderate
  3. Moderately Aggressive, and
  4. Aggressive

Active Strategic Portfolio Strategies: The annual fee is between 1.0% and 2.0%. These strategies have an account minimum of $40,000.  The following Active Strategic Strategies are offered:

  1. Conservative Income
  2. Balanced
  3. Balanced Growth
  4. Growth

 

  

 


Addendum I – Continued

 

Complete the table below to indicate all accounts to be managed by this Agreement

 

Custodian
 Name

Account Registration

Account Number

Account Owner

Approx Acct Value

Fee %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In the space provided below, please list any assets that shall be excluded from billing. Also, list any special instructions or limitations regarding assets (e.g., do not sell IBM stock because of capital gains, do not invest any assets in REITs, etc.).

 

 

Assets Excluded from Billing

Security Description                  CUSIP or Ticker                   % or # of Shares

________________       ____________    _____________
________________       ____________    _____________

Special Situations

_____________________________________________________________________________

_____________________________________________________________________________

 

 

Client Initials:            ______________        _____________

 

 

 

 

Addendum II
 Advisory Billing Instructions
(Please complete if Client has specific billing instructions.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Addendum III
Retirement Account On-Line Access for Holland to Perform Trading

 

By providing the information below, Client hereby grants Holland Advisory Services, Inc. access to the following externally managed accounts for the purpose of implementing its allocation recommendations.

When completing the information below, please write neatly, be sure to distinguish between lower case (e.g., k) and upper case (e.g., K) letters, and differences such as 1 (the number) or l (a lower case letter).

 

Institution Name:

 

Account Name:

 

Web Address:

 

Account Number:

 

Login Id:

 

Password:

 

 

 

Security Question 1:

Answer:

 

Security Question 2:

Answer:

 

Security Question 3:

Answer:

 

 

Institution Name:

 

Account Name:

 

Web Address:

 

Account Number:

 

Login Id:

 

Password:

 

 

Security Question 1:

Answer:

 

Security Question 2:

Answer:

 

Security Question 3:

Answer:

 

 

 



Holland Advisory Services, Inc.

The Holland Financial Center

700 West Granada Boulevard, Ormond Beach, FL 32174

386-671-7526