Please keep a copy of this Client Agreement for your records.
This Client Agreement (the “Agreement”) specifies the terms and conditions under which Sootchy Securities LLC (the “Investment Adviser”) and collectively with its affiliates, (“Sootchy Inc., “us,” “our,” or “we”) will manage the account of the client (“you”) enrolled in the Sootchy college savings investment advisory program referred to as the (“Program”). By completing the Program’s online account application and agreeing to the Terms of Service and other documents linked therein (the “Account Application”), which is incorporated into this Agreement by reference, you agree to the terms of this Agreement. The Program is made available through the Sootchy app and/or website at sootchy.com (the “Sootchy Website”).
As described below, the Program is designed for a client who seeks an interactive digital platform managed account experience. The Program is intended to be used by college savers who desire to save for qualified higher education expenses through a qualified tuition program (commonly referred to as a “529 Plan”) and would like a platform that simplifies the enrollment process as well as the ability to make and receive contributions into the 529 Plan.
The Program will use an algorithm to recommend a 529 portfolio for you (the “Advisory Service”) within the my529 Plan, a qualified tuition program offered by the State of Utah. The Advisory Service is not a comprehensive investment advisory service or a complete financial plan. In making its recommendations, Sootchy does not consider other aspects of your financial or tax situation. My529 (the “529 Plan”) is not affiliated with Sootchy and my 529 is not responsible for recommendations made by the Investment Adviser or the operation of the Program. In the future, the Program may include other 529 Plans that meet the Investment Adviser’s screening criteria.
my529 is offered by the State of Utah. If you or the designated beneficiary are not a Utah resident, you may want to consider, before investing, whether your state or the designated beneficiary’s home state offers its residents a plan with favorable state tax treatment or other state benefits such as financial aid, scholarship funds, and protection from creditors that may only be available through investment in the home state’s Section 529 Plan, and which are not available through investment in my529. Please carefully consider my529’s investment objectives, risks, charges, and expenses before investing. For this and other information click here. Read it carefully before you invest or send money.
This Agreement includes and incorporates by reference the Account Application, the Form ADV Part 2A brochure (“Account Documents”) provided by Sootchy with respect to the advisory services provided under this Agreement, including any Account Documents and any supplements, statements, disclosures, and other agreements that state they incorporate by reference this Agreement (each an “Account Document Supplement”). To the extent that this Agreement conflicts with any provision contained in the Account Application, the Account Documents, or any Account Document Supplement the provisions of this Agreement shall control. You acknowledge that you have received the respective Account Documents and any Account Document Supplements before or at the time of entering into this Agreement.
To participate in the Program, you must complete an online enrollment process and agree to accept electronic delivery of Program services, as well as Program and 529 Plan contracts, disclosure documents, prospectuses, trade confirmations, account statements and other Program materials and legal and regulatory documents, including without limitation the Account Documents and any Account Document Supplements (collectively, “Program Documents”). Regular and continuous Internet access is required to enroll in the Program, to receive Program services and to access all Program Documents. You have an obligation to maintain a current and accurate email address to ensure that you can receive and retain the Program Documents. Participation in the Program can be terminated by us if you request to unenroll in electronic delivery for your Program-related communications, materials, and Program Documents. While Sootchy does not require a minimum contribution to open an Account, if you have not made an initial contribution to the 529 Plan within sixty (60) days, we can elect, in our sole discretion, to terminate your participation in the Program.
As described below, Sootchy will assess your financial information to recommend an existing Portfolio within the 529 Plan (“Portfolio”).
(a) Account Management and Portfolio Proposal. Based on the information you provide as part of the online Program Account opening process, Sootchy will propose an existing Portfolio within the 529 Plan for your Program Account as the basis for our Advisory Service. As part of the enrollment process, you will be required to provide us with certain initial information, including your age, goals, initial investment, time horizon, household income, and risk tolerance. Your proposed 529 Plan Portfolio will be based on the information you chose to provide. We can, in our sole discretion, elect to change the Program at any time upon thirty (30) days written notice delivered to you by email.
You represent that the information you provided as part of your online Program Account opening process is accurate and complete in all material respects, and you agree that we bear no responsibility for any Portfolio recommendations or other actions taken on the basis of any incomplete or incorrect information you provide.
If you enroll in the Program, Sootchy’s proprietary algorithm will identify and propose an existing Portfolio within the 529 Plan using the information you provided during the enrollment process and, when applicable, certain assumptions about your financial situation, investing experience, and investment knowledge. Sootchy will oversee the algorithm but not monitor each client’s account.
The Portfolio proposed by Sootchy will be a “target date” fund managed by my529 and not a customized portfolio designed by Sootchy. After our initial recommendation, Sootchy will not provide additional ongoing Portfolio advice or recommendations. Please see specific disclosure contained in Sootchy’s ADV Part 2A for more information.
You can select the Portfolio we have proposed or a different Portfolio you believe is appropriate for you. If you select an existing Portfolio within the 529 Plan that differs from the one proposed to you by Sootchy, you understand and acknowledge that you are directing that your initial and subsequent contributions to the 529 Plan be made to a Portfolio different from the one identified and proposed by our algorithm, and that the performance of such Portfolio will likely differ from the performance of the Portfolio originally proposed.
(b) Program Enrollment. To help the U.S. government fight the funding of terrorism and money-laundering activities, federal law requires that we or our affiliates verify your identity by obtaining your name, your date of birth, your address, and a government-issued identification number before opening an account with the Program for you (“Program Account”). In certain circumstances, we may obtain and verify this information with respect to any person(s) authorized to effect transactions in the Program Account. Your Program Account may be restricted or closed if Sootchy cannot verify this information for any reason. We are not 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 Program Account. Any information you provide in conjunction with the Program may be shared with our affiliates and third parties for the purpose of validating your identity and may be shared for other purposes in accordance with the Sootchy Privacy Policy. Any information you provide in conjunction with the Program may be subject to verification.
In order to enroll in the Program, you must: (i) be a U.S. person (including a U.S. resident alien), (ii) reside in the U.S. and have a valid U.S. permanent (no 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. The Program is not available to foreign investors, and if you or another individual associated with your Program Account resides outside the U.S. and you have an existing relationship with Sootchy, Sootchy may, in its sole discretion, either terminate that relationship or modify your rights to access any or all Program Account features and services. By enrolling in the Program, you acknowledge that Sootchy does not solicit offers to buy or sell securities, or any other product or service, or 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.
(c) Advisory Fees. Sootchy does not charge an advisory fee for the investment advice provided nor does Sootchy receive transaction fees for client contributions to their 529 Plan account. Sootchy does collect a share of the interchange fees charged when an individual makes a gift to a 529 Plan. Our current transaction fees can be found here. Program fees are subject to change at our sole discretion upon thirty (30) days notice, and we will notify you of any change in the advisory fees paid by you. You will be deemed to have approved such fee changes through your continued acceptance of your Program’s services. We may waive Program fees, in whole, or in part, for certain periods of time or indefinitely for former and current Sootchy employee’s eligible family members. The annual advisory fee does not cover fees and expenses charged by the 529 Plan or other transaction fees charged by our payment processing vendors. For more information on the 529 Plan fees and expenses please see the 529 Program Description for the 529 Plan in which you enrolled.
(d) Custody of Assets. Upon submitting a contribution to your account, it will take several days for Sootchy to receive the contribution depending on a number of factors, including but not limited to the method of payment and the individual policies of your bank and/or credit card company. Once the contribution is processed, your contribution will be held in our payment processing account with Payrix (One Cowboys Way, Suite 190, Frisco, TX 75034, (855) 672-9749). Except for certain circumstances described below, on the same or following business day after your contribution is received, the contribution will be transferred to a Wells Fargo account (420 Montgomery Street, San Francisco, CA 94104). Except as described below, upon receipt at Wells Fargo, your contribution will be transferred to my529 (PO Box 145100, Salt Lake City, UT 84114-5100 (800) 418-2551) the same or following day after receipt. Once your funds are held by my529, Sootchy will no longer maintain custody of your assets.
During the limited time your funds are held at Payrix and Wells Fargo, you will not receive statements from Payrix or Wells Fargo. If you have questions regarding the status of your contribution prior to its receipt by my529 please contact Sootchy directly.
While every effort will be made for contributions to be transferred the same or following business day after receipt by Sootchy, in certain circumstances Sootchy may hold the contribution for longer. Circumstances requiring Sootchy to hold funds past our stated goal, include but are not limited to: suspected fraudulent transactions and technical issues, beyond our control, at one or all custodian.
(e) 529 Plan Disclosure Documents. If you open and contribute to a 529 Plan you will directly own an interest in the 529 Plan and will be subject to the terms of all of the 529 Plan disclosure documents, agreements, and other documents applicable to a 529 Plan account owner, including fees and expenses (the “529 Plan Documents”). [You agree to receive electronic notice sent to you or your stated designee via the email address you have provided when prospectuses are available for your review via the Sootchy Website or the 529 Plan website, both at the time of your initial contribution to the 529 Plan, and at any time an additional contribution is made.]
(f) Tax Issues. Withdrawals from a 529 Plan Account are free of federal taxes on earnings when used for qualified higher education expenses and may be free of state taxes as well. See the 529 Plan Documents for more information. You are responsible for all tax liabilities arising from transactions in your Program Account, for the adequacy and accuracy of any positions taken on your tax returns, for the actual filing of your tax returns, and for the remittance of tax payments to taxing authorities. Tax laws and regulations change frequently, and their application can vary widely based on the specific facts and circumstances involved. Please consult your tax advisor regarding your specific tax situation. Additionally, because we do not offer all existing 529 Plans or other potential education savings vehicles, you should review the potential tax benefits of other options against the 529 Plan available and the services offered by us. Any resource or information presented to you in conjunction with the Advisory Service about tax considerations or estate arrangements is not intended as tax or legal advice and should not be relied on for the purpose of avoiding any tax penalties. Sootchy does not provide tax, accounting, or legal advice. You should review any planned financial transactions or arrangements that may have tax, accounting, or legal implications with your tax and legal advisors.
(g) Proxy Voting and Legal Proceedings. We will not acquire authority for, or exercise, proxy voting on a client’s behalf in connection with the Program.
(h) Electronic Delivery of Trade Confirmation and Other Communications. By enrolling in a Program, you agree to electronic delivery of all communications and Program Documents associated with your Program Account(s), including trade confirmations for contributions and withdrawals made for your 529 Plan, statements, agreements, account profile, Program Documents, tax forms, and any other communication, sent to your attention via electronic delivery.
The Program does not support paper delivery of documentation. You may request to unenroll in electronic delivery with respect to Program Account communications, but any request to do so may result in the termination of this Agreement and the closure of your Program Account(s).
(i) Termination of Program Services. You may terminate your Program’s services at any time by written notice to Sootchy via sootchy.com. We may terminate or suspend Program services for your Program Account (or for any portion of a Program Account) upon thirty (30) days’ written notice to you, for any reason, including, but not limited to, where you have not provided us with information we have requested in order to manage your Program Account, or if we determine that the Program is no longer appropriate for you. Certain instances may arise where we may need to suspend investment management of your Program Account without prior notice, including, without limitation, if you or another individual associated with your Program Account resides outside the United States or otherwise to comply with applicable law, rule, or regulation.
Following your termination from a Program: (i) if your Program Account(s) has assets in the 529 Plan you will continue to be an account owner in the 529 Plan. The Advisory Service will no longer be available to you and Sootchy will no longer act as your Investment Adviser with respect to the Program or the Advisory Service. Termination will not affect (i) the validity of any action we have previously taken, (ii) any liabilities or obligations for transactions initiated before termination, or (iii) our right to retain fees, if any, for services rendered under this Agreement.
The Program is subject to certain risks that are discussed in detail in the Program Documents, including the 529 Plan Documents. You acknowledge we do not guarantee that (i) the results of the Program or the performance of the 529 Plan or the goals or objectives outlined as part the Program or 529 Plan will be met, or (ii) the objectives of your Program Account, the recommended Portfolio, or the Portfolio’s underlying investments in the Portfolio will be met. You acknowledge that any projections made as part of a Program are hypothetical in nature, are for illustrative purposes only, do not reflect actual investment results, and are not guarantees of future investment outcomes.
Except as otherwise provided by law, or resulting from our bad faith, willful misconduct, or gross negligence, we and our affiliates will not be liable for:
Federal and state securities laws impose liabilities in certain circumstances on persons who act in good faith, and nothing in this Agreement waives or limits any rights you have under these laws.
The extent of our advisory responsibilities provided through the Program are identified in this Agreement and the Account Documents and the Account Document Supplements and, unless otherwise agreed to in writing, we are not responsible for providing any investment advice other than the Advisory Service for your Program Account. The advisory services provided for, or action taken for, any other clients or accounts, including our own accounts or the accounts of our affiliates and their related persons, may differ from the Advisory Service provided pursuant to this Agreement, or action taken for your Program Account. We and our affiliates are not obligated to invest in or otherwise recommend or suggest to you any investment that may be recommended or suggested to, or bought or sold for, any other clients or accounts, including our own accounts and those of our affiliates and their related persons.
You represent that you have the authority to retain us to provide the selected Program and enter into this Agreement. You agree to notify us in writing of any event that might affect your authority or the validity of this Agreement. You agree to indemnify and hold us harmless from and against all losses, costs (including court costs), or damages, whether direct, indirect, special, incidental, consequential, punitive, or otherwise, of any kind, and from and against all claims, demands, proceedings, suits and actions, and all liabilities and expenses (including legal fees) resulting from, in connection with, or arising out of any actions taken or not taken by Sootchy in good faith reliance on representations made by, or on behalf of, you, in this Agreement. You further agree that, if you have authorized someone to act on your behalf with respect to your Program Account, any and all disclosures, required or otherwise, may be provided solely to the individual acting on your behalf as part of the scope of his or her authority.
Any notice required to be given by you in connection with this Agreement (other than as otherwise specified herein) will be deemed delivered if sent electronically through the Sootchy Website or to your email address of record in your account profile.
(a) Limitation on Assignment. This Agreement will bind and be for the benefit of the parties and their successors and permitted assigns. This Agreement may not be assigned (within the meaning of the Investment Advisers Act of 1940, as amended (the “Advisers Act”)), without your consent, which consent may be obtained by advance written notice to you of the assignment followed by your continued participation in the Program without objection.
(b) Modification to Comply with Applicable Law. If any provision of this Agreement is or becomes inconsistent with Applicable Law, or rule of any governmental or regulatory body having jurisdiction over the subject matter of this Agreement, the provision will be deemed rescinded or modified in accordance with such law or rule. In all other respects, this Agreement will continue in full force and effect. No term or provision of this Agreement may be waived except in writing, signed by the party against whom such waiver is sought to be enforced.
(c) Amendment. This Agreement, including those sections related to the fees payable for your Program services, may be changed or amended, in whole or in part, by us upon thirty (30) days’ prior written notice to you, and your continued acceptance of your Program services after thirty (30) days shall constitute acceptance of any such amendment. Our failure to insist at any time on strict compliance with this Agreement or with any of the terms of the Agreement or any continued course of such conduct on our part is not a waiver by us of any of our rights or privileges.
(d) Entire Understanding. This Agreement (including the Account Application, Program Documents, and Program Document Supplements) contains the entire understanding between the parties hereto concerning the subject matter of this Agreement.
(e) Headings. Headings are for convenience of reference only and are not part of this Agreement.
(f) Governing Law. This Agreement will be governed by the laws of the State of Delaware, without giving effect to the choice of law provisions of that or any other jurisdiction, but nothing in this Agreement will be construed contrary to the Advisers Act or any rule or order of the United States Securities and Exchange Commission under the Advisers Act or, where applicable, the provisions of the Internal Revenue Code of 1986, as amended. The parties irrevocably consent to submit to the jurisdiction of any federal or state court sitting in the State of Delaware for any action set forth below in this Agreement.
(g) Effectiveness of the Agreement. Except as otherwise expressly provided in the Account Application, this Agreement will not become effective until accepted by us, and such acceptance may be evidenced by internal records maintained by us.
This Agreement contains a predispute arbitration clause. By agreeing to the terms of this Agreement, the parties agree as follows:
(a) All 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; however, this provision shall not constitute a waiver of any rights under the Advisers Act.
(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, unless, in an eligible case, a joint request for an explained decision has been submitted by all parties to the panel at least twenty (20) days prior to the first scheduled hearing date.
(e) The panel of arbitrators may include a minority of arbitrators who were or are affiliated with the securities industry.
(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.
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.
All controversies that may arise between you and Sootchy concerning your Program Account, any order or transaction, or the continuation, performance, interpretation, or breach of this Agreement shall be determined by arbitration in accordance with the rules and regulations of the American Arbitration Association under the Commercial Arbitration Procedures then in effect or, if the parties mutually agree, by another dispute resolution forum. You understand that judgment upon any arbitration award may be entered in any court of competent jurisdiction.
This predispute arbitration agreement shall survive the termination of this Agreement.
