This Advisory Agreement is entered into by Qapital, an investment adviser registered with the Securities and Exchange Commission, and Client. Client is contracting with Qapital to participate in Qapital’s investment management program. This Advisory Agreement is made and effective as of the date it is electronically signed by Client. The defined terms used in this Advisory Agreement are found in Section 2.
DEFINITIONS. The following terms set forth below have the following meanings as used in this Advisory Agreement:
Account. The account(s) established (either at the time of, or subsequent to, the execution of this Advisory Agreement) in Client’s name alone, in Client’s name together with others, or in which Client has beneficial interest if any such account is an IRA, the assets belonging to which are managed through the Program.
Advisers Act. The Investment Advisers Act of 1940, as amended.
Advisory Communications. All communications to Client from Qapital which relate to the Account, the Program, or, more generally, Client’s relationship with Qapital.
Account Holder. The natural person, corporation, partnership, trustee, custodian, or other entity in whose name the Account is opened. The singular of Account Holder where appropriate shall include the plural. For purposes of IRAs, Account Holder shall be the Custodian, as defined in the IRA Custodial Agreement, for the benefit of Client. For purposes of trusts, Account Holder shall not include the beneficiaries of the trusts.
Advisory Agreement. This Advisory Agreement between Qapital and Client, as it may be amended from time to time.
Application. The application Client prepares and submits within the “Sign Up” section of the Website for the purpose of becoming a client of Qapital, and as part of which Client consents to the terms and conditions of this Advisory Agreement. Application includes all information provided by Client to Qapital in connection with the opening or maintenance of the Account.
Business Day. Monday through Friday, excluding U.S. stock exchange holidays.
Client. The individual(s), corporation(s), or other entity or entities who are the Account Holder or who own a legal or beneficial interest in the Account if the Account is an IRA. For avoidance of doubt, the beneficiary of a trust is not a Client.
Client Representative. If Client is an entity, the trustee, agent, representative, or nominee of that entity.
Custodian. The qualified custodian selected by Client to maintain custody of Account assets.
Fee. The annualized advisory fee (which is subject to a minimum fee) charged by Qapital to Client.
Fiduciary. A person or entity authorized to give instructions with respect to the Account on behalf of beneficial owners of the Account, including a custodian, a trustee, conservator, guardian, representative, administrator, executor, attorney-in-fact, or an investment adviser. A Fiduciary is bound by the provisions of this Advisory Agreement to the same extent as the beneficial owners of the Account. A Fiduciary may be an Account Holder if the Account is held in the name of the Fiduciary.
Interface. The collection of tools, features, adjustments, inputs, and other controls within the Website that are provided to establish and manage the Account and access services provided through the Program.
Joint Account. The account(s) with more than one Account Holder established (either at the time of, or subsequent to, the execution of this Advisory Agreement) to hold assets managed through the Program.
Linked Checking Account. The checking account linked to the Account as selected by Client.
Losses. Any and all loss, liability, cost, judgment, arbitration award, settlement, tax, penalty, action, damage, charge, expense, or fee (including attorneys’ fees and costs of collection) of any nature whatsoever, and claims therefore.
Market Hours. The open hours of the New York Stock Exchange, generally 9:30 AM to 4:00 PM Eastern Time on Business Days.
Password. Any authentication device (including alphanumeric codes) associated with Client’s User ID that Qapital requires for access to the Account (or certain Account features) or services provided through the Program, Website, and/or Interface.
Plan. The investment plan designed by Qapital for Client.
Products. The investment products offered through the program, which include exchange traded funds.
Program. The investment advisory services provided by Qapital, as described below in Section 9, as well as the brokerage and other services that Qapital shall arrange to provide for Client pursuant to the terms hereof.
Qapital. Qapital Invest, LLC, a Delaware limited liability company and investment adviser registered with the Securities and Exchange Commission.
Related Parties. Qapital’s affiliated entities and each of their respective members, partners, officers, directors, employees, counsel, representatives, consultants, agents, advisors, successors and assigns.
User ID. The alphanumeric code that uniquely identifies Client for purposes of the Program.
Website. World Wide Web sites and mobile applications operated by Qapital; including www.qapital.com through which the Program is administered and, among other things, the Account is established, accessed, and managed by the Client, and Account related information is made available. The Interface is part of the Website.
For natural person Clients, each Account Holder must sign, unless represented by a Fiduciary. If a natural person Client is represented by a Fiduciary, then the Fiduciary must be sign and the capacity in which he or she is acting must be indicated.
For entity Clients, a duly authorized Client Representative must sign, and the capacity in which he or she is acting must be indicated.
The name, electronic signature and date of electronic signature or acceptance of each Account Holder, Fiduciary and/or Client Representative is incorporated by reference to the information stored in those fields found within the Application.
Qapital’s approval of this Advisory Agreement is incorporated by reference to fields captured by Qapital’s internal software systems.
Rule 14b-1(c) of the Securities Exchange Act, unless you object, requires us to disclose to an issuer, upon its request, the names, addresses, and securities positions of our customers who are beneficial owners of the issuers securities held by us in nominee name. The issuer would be permitted to use your name and other related information for corporation communication only. If you object to this disclosure contact us at email@example.com.
Under penalties of perjury, I certify that: (1) The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me), and (2) I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and (3) I am a U.S. citizen or other U.S. person (defined below), and (4) The FATCA code(s) entered on this form (if any) indicating that I am exempt from FATCA reporting is correct. Definition of a U.S. person. For federal tax return purposes, you are considered a U.S. person if you are: An individual who is a U.S. citizen or U.S. resident alien, A partnership, corporation, company, or association created or organized in the United States or under the laws of the United States, An estate (other than a foreign estate), or A domestic trust (as defined in Regulations section 301.7701-7).
The Internal Revenue Service does not require your consent to any provisions of this document other than the certifications required to avoid backup withholding.
I hereby authorize Clearing Firm to (i) execute trades and process transactions in the Account as directed by Advisor; (ii) remit checks, wire funds, and to otherwise make disbursements of funds held in the Account to (1) banks, broker-dealers, investment companies, or other financial institutions to an account of identical registration, or (2) you at your address of record at Advisors instruction; (iii) provide Advisor with issuer- related communications, including those that require a voting decision or other action, and to perform all actions relating to those communications, including the voting of shares and proxy material, and (iv) pay investment advisory and other fees from the Account at, and in the amount of, Advisors instruction, without inquiry or investigation, in accordance with the terms of the Customer Account Agreement and Advisor Authorization.
I authorize my broker and/ or Clearing Firm to obtain a consumer report at the time of application to verify my creditworthiness and to obtain a consumer report from time to time for updates, renewals, extensions, and collection activity on any approved account. Upon my written request, my broker and/ or Clearing Firm will disclose to me whether it obtained a report, and if so, the name and address of the consumer-reporting agency that provided it. In the event that my account is denied by Clearing Firm, as a result of the consumer report verification, I authorize Clearing Firm to provide to my broker the reason(s) for such denial.
BY SIGNING THIS APPLICATION, I ACKNOWLEDGE THE FOLLOWING: (1) THAT, PAGE 4 PARAGRAPH 10 OF THE CUSTOMER
ACCOUNT AGREEMENT CONTAINS A PREDISPUTE ARBITRATION CLAUSE AND IN ACCORDANCE WITH THIS AGREEMENT I (WE) AGREE IN ADVANCE TO ARBITRATE ANY CONTROVERSIES WHICH MAY ARISE BETWEEN OR AMONG ME (US), MY BROKER, AND/OR CLEARING FIRM, (2) RECEIPT OF A COPY OF THE CUSTOMER ACCOUNT AGREEMENT FOLLOWING THIS APPLICATION AND MY (OUR) AGREEMENT WITH THE TERMS THEREIN AND (3) THE INFORMATION PROVIDED ABOVE IS ACCURATE.
This Customer Account Agreement (the Agreement) sets forth the respective rights and obligations of Apex Clearing Corporation (Apex) and the customer identified on the New Account Application (the Customer) in connection with the Customers brokerage account with Apex (the Account). Customer hereby agrees as follows with respect to the Account, which Customer has established with Apex for the purchase, sale, and/or carrying of securities or contracts relating thereto and/or the borrowing of funds, at the instruction of Customers registered investment advisor as authorized by Customer in the New Account Application (Advisor), which transactions will be cleared through Apex. To help the government fight the funding of terrorism and money laundering, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. In order to open the Account, Customer will provide information that will allow Apex to identify Customer, including, but not limited to, Customers name, address, date of birth, and copies of Customers driver license and/or other identifying documents.
THIS ARBITRATION AGREEMENT SHOULD BE READ IN CONJUNCTION WITH THE DISCLOSURES ABOVE. ANY AND ALL CONTROVERSIES, DISPUTES OR CLAIMS BETWEEN OR AMONG APEX, ADVISOR, AND/OR CUSTOMER OR THEIR REPRESENTATIVES, EMPLOYEES, DIRECTORS, OFFICERS, OR CONTROL PERSONS, ARISING OUT OF, IN CONNECTION WITH, FROM, OR WITH RESPECT TO (a) ANY PROVISIONS OF OR THE VALIFITY OF THIS AGREEMENT OR ANY RELATED AGREEMENTS, (b) THE RELATIONSHIP OF THE PARTIES HERETO, OR (c) ANY CONTROVERSY ARISING OUT OF APEX’S BUSINESS, ADVISOR’S BUSINESS OR THE CUSTOMER’S ACCOUNTS, SHALL BE CONDUCTED PURSUANT TO THE CODE OF ARBITRATION PROCEDURE OF THE FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA). ARBITRATION MUST BE COMMENCED BY SERVICE OF A WRITTEN DEMAND FOR ARBITRATION OR A WRITTEN NOTICE OF INTENTION TO ARBITRATE. THE DECISION AND AWARD OF THE ARBITRATOR(S) SHALL BE CONCLUSIVE AND BINDING UPON ALL PARTIES, AND ANY JUDGMENT UPON ANY AWARD RENDERED MAY BE ENTERED IN A COURT HAVING JURISDICTION THEREOF, AND NEITHER PARTY SHALL OPPOSE SUCH ENTRY.
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; (ii) the class is de-certified; or (iii) 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 extent stated herein.
November 15, 2018
Qapital Invest, LLC
304 Hudson Street
New York, New York 10013
This brochure provides information about the qualifications and business practices of Qapital Invest, LLC. If you have any questions about the contents of this brochure, please contact us at (973) 207-0898. The information in this brochure has not been approved or verified by the United States Securities and Exchange Commission (the “SEC”) or by any state securities authority.
You can find more information about Qapital Invest, LLC at the SEC’s website www.adviserinfo.sec.gov
This item identifies and discusses only those material changes that have occurred since our last firm brochure, which was dated March 20, 2018. Since that date, our fee structure has changed, as further described in Item 5. In particular, we have modified our fees to charge a monthly subscription fee of $6 for Qapital Complete or $12 for Qapital Master. This subscription fee includes access to our investment advisory services..
Qapital Invest, LLC (“we,” “us” or “Qapital”) is an investment adviser registered with the SEC. 1 Qapital was founded in March 2016 and is headquartered in New York, New York. We are a wholly-owned subsidiary of Qapital, Inc., a Delaware corporation. Qapital, Inc., is a wholly- owned subsidiary of Qapital, Inc., a corporation organized under the laws of Delaware (“Qapital, Inc.”). Qapital, Inc. is a wholly-owned subsidiary of Qapital Insight AB, a corporation organized under the laws of Sweden (“Qapital Insight AB”).
We believe that long-term financial health can be achieved by consistent and automatic investment. As a result, we offer a unique automated investment service through the internet that makes it possible for clients to access state-of-the-art portfolio management for a very competitive fee.
Each individualized portfolio is designed to be consistent with a client’s specific investment objectives and risk tolerances. We use algorithms to initially invest and continue to manage your portfolio. Those algorithms seek to identify the optimal asset classes in which to invest, the most efficient exchange traded funds (“ETFs”) to represent each of those asset classes, and the ideal mix of asset classes based on your specific risk tolerance. We do not use securities other than ETFs to build client portfolios.
We tailor our services to meet each client’s financial needs and goals. At the outset, we ask each client a series of questions to assess risk tolerance, investment goals, age, investment time horizon, current assets and income. Based on a client’s responses to these questions, the algorithms we use will determine a client’s risk profile and create an individualized portfolio of ETFs based on that profile.
You should be aware that by using our services, you are giving us the discretion to select the appropriate asset classes and ETFs based on our evaluation of your risk tolerance and investment needs. We do not allow clients to select specific ETFs or asset classes because each ETF and asset class is considered to be part of the overall investment plan. That said, we do permit clients to elect to restrict their accounts to invest only in ETFs that are designated as “socially responsible” by our firm.
As of March 20, 2018, we have no assets under management. We manage client assets through our software based financial service on a discretionary basis. We do not manage assets on a nondiscretionary basis.
1 Registration as an investment adviser does not imply a certain level of skill or training.
We charge a monthly subscription fee of $6 for Qapital Complete or $12 for Qapital Master. This subscription fee includes access to our investment advisory services. Our fees are not negotiable.
We deduct our advisory fee for a given month from your investment account or other funding account designated by you no later than the tenth business day of the following month.
ETFs are subject to investment advisory and other expenses, which will be indirectly paid by clients. These fees and expenses are described in each ETF’s prospectus, and they are not shared with us.
You could invest in an ETF directly. In that case, you would not receive the services we provide, which are designed in part to help you determine which, if any, ETFs are best suited to your financial condition and objectives. You should review the fees charged by ETFs and our fees to fully understand the total amount of fees you will pay and to evaluate the advisory services we provide.
You may also incur brokerage and other transaction costs, as discussed below in Item 12.
We do not accept “performance-based fees” (i.e., fees based on a share of capital gains on or capital appreciation of your assets).
Qapital provides its advisory services to individuals of all income levels, and, unlike many advisers, we do not impose a minimum account size requirement.
To build your investment portfolio, we first seek to accurately assess your investment objectives and tolerance for risk. As discussed above in Item 4, we ask each client a series of questions to assess risk tolerance, investment goals, age, investment time horizon, current assets and income. Using the results of that assessment, we apply sophisticated algorithms to create an individualized portfolio, comprised of the optimal asset classes in which to invest and the most efficient ETFs to represent each of those asset classes. Our portfolios will generally use equity ETFs, fixed income ETFs, or a combination of both to the extent required to match your investment objectives and risk tolerance. In selecting ETFs for our portfolios, we look for ETFs that minimize cost and tracking error and offer market liquidity.
On a quarterly basis, the algorithms we use will rebalance our clients’ portfolios as needed to optimize returns and remain consistent with our clients’ current risk profiles and current market conditions.
We review and test the algorithms we use on a periodic basis to ensure that they continue to operate as expected and remain appropriate in light of market changes.
All investments in securities include a risk of losing your principal (invested amount) and any profits that you have not yet realized. You should be prepared to bear that risk. As you know, the stock and fixed income markets fluctuate substantially over time. In addition, as recent global and domestic economic events have shown, the performance of any investment is not guaranteed.
Our strategies may subject clients to the following risks:
Registered investment advisers are required to disclose all material facts regarding any legal or disciplinary events that would be material to your evaluation of us or the integrity of our management.
We have no legal or disciplinary events to report. 2
2 We note that registered advisors are required to report, in Part 1A of Form ADV, all disciplinary events regardless of whether they are material. We have no disciplinary events of any kind to report.
We are obligated to disclose whether Qapital or any of our affiliates are involved in other financial industry activities, such as those of an investment adviser or broker-dealer. We are also obligated to disclose if we receive compensation from other advisers for recommending or selecting those advisers.
Our indirect parent company, Qapital Insight AB, is a provider of a mobile application and related website that assists consumers in managing their finances and encouraging savings. Other than this, we do not have any other financial industry activities or affiliations to report. In addition, we do not receive compensation from other advisers for recommending or selecting them.
We expect our employees to always act in your best interests, and to place your interests ahead of their own. We have adopted a Code of Ethics (the “Code”) that sets forth the standard of business conduct expected from each member of our team.
The Code restricts trading in any security for which we believe we may be privy to material non-public information. It also places restrictions on trading by our employees (which we refer to as “personal trading”) to prevent any conflict of interest between personal trading and client trading. The Code limits gifts and entertainment, whether received or given, to avoid conflicts of interests. The Code causes all outside business activities of our team members to be disclosed so that potential conflicts can be detected and addressed. Finally, it limits the political contributions of our employees to prevent any potential conflicts in that area as well. All our employees must accept in writing the terms of the Code upon employment, annually, and as amended.
We will provide a copy of the Code to any client or prospective client upon request. If you would like a copy, please contact our Chief Compliance Officer at the telephone number or the address specified on the cover page of this brochure.
Our employees may have their own Qapital accounts, or they may independently invest in the same ETFs used to build our clients’ portfolios. As a result, our employees may (i) buy or sell the same securities that we buy or sell for clients, (ii) buy or sell securities for their own accounts at the same time that we buy or sell the same securities for client accounts, or (iii) have buy or sell orders included in an aggregated transaction along with client buy or sell orders. To address any potential conflicts of interest from this practice, our employees may not trade in a manner that would be adverse or detrimental to client trades.
We do not buy or sell for your account securities in which Qapital or our employees have a material financial interest.
Our management discretion generally includes the selection of the security, the amount to be purchased or sold, the broker to be used, and the commission to be paid. We select brokers for our clients on the basis of the broker’s overall assistance in effecting the transaction. We consider many factors, including:
We do not consider, in selecting brokers, whether we or an affiliate receives client referrals from a broker or third party.
No Directed Brokerage. We do not permit clients to direct us to effect securities transactions in client accounts through a specific broker-dealer.
We do not enter into agreements to receive research or other products or services in connection with executing client transactions with broker-dealers (often called “soft dollar” benefits). However, certain brokers through which we execute trades may provide unsolicited proprietary research (research the broker creates) to us. This research is used to benefit the algorithms we use to service all client accounts, even though only certain clients may have paid commissions to the brokers who provided the research. This research could include a wide variety of reports, charts, publications or proprietary data on economic and political strategy, credit analysis, or stock and bond market conditions and projections.
Commission rates paid may be higher than the lowest commission rate available. Custodians generally charge a minimum fee for each transaction in a client account. Because of this minimum fee, it may not be economically feasible to select any broker other than your custodian for your transactions.
We may aggregate orders for the same securities purchased for a number of client accounts. Trade aggregation is performed to ensure, to the extent possible, optimal execution and consistent results across our client base. Accounts owned by our employees may participate in aggregated orders; however, they will not be given preferential treatment. Occasionally, we may only partially fill an aggregated order. Under those circumstances and to the extent it makes practical sense, we allocate the order on a pro rata basis among the applicable client accounts and do not allocate to firm or employee accounts unless all client orders are fully filled. The allocation of the shares purchased is not based on account performance or the amount of management fees. There may be instances when partially filled orders may adversely affect the size of the position or the price you pay or receive, as compared with the size of the position or price that you would have paid or received had no aggregation occurred.
When a trade error occurs, the client will retain any net gains resulting from the error correction, and we will compensate the client wholly for any loss resulting from the error or its correction.
We provide our clients with continuous access through our mobile application to individualized account reports that provide information about securities positions and portfolio performance. Clients may also receive periodic email communications about their account information and other aspects of the services we provide.
After an initial investment portfolio is created, our system will automatically review each account on a quarterly basis for consistency with a client’s current risk profile and current market conditions in accordance with the algorithms we use. Also quarterly, we permit and encourage our clients to review and update the data provided to us to account for changes in financial circumstances and risk tolerance.
Each quarter, taking into account the results of that review and any client-made profile updates, our system will automatically rebalance investment accounts as needed to remain consistent with current market conditions and the client’s current risk tolerance and investment goals.
By opening an account with Qapital, you consent to have your Qapital investment account automatically rebalanced on a quarterly basis.
We do not compensate any person for client referrals.
Other than the compensation described in Item 5, we do not receive any compensation from anyone other than our clients.
We do not provide custodial services to our clients. Your assets must be held by a broker, bank or other “qualified custodian.” You will receive custodial statements directly from your qualified custodian at least quarterly. We urge you to carefully review the custodial statements and compare them to the reports we provide for you. The information in our reports may vary from your custodial statements based on accounting procedures, reporting dates or valuation methodologies of certain securities.
Our investment advisory agreement with you give us discretionary authority to manage the assets in your account, including the ability to select brokers, purchase, sell and exchange securities, and reinvest all proceeds. We do not allow clients to select specific ETFs or asset classes, because each ETF and asset class is considered to be part of the overall investment plan. That said, as noted in Item 4 above, we do permit clients to elect to restrict their accounts to invest only in ETFs that are designated as “socially responsible” by our firm.
We do not accept authority to vote client securities. Proxy materials generally will be received by you directly or forwarded to you by your qualified custodian. We encourage you to contact your qualified custodian if you have questions related to proxy materials.
In certain circumstances, registered investment advisers are required to provide clients or prospective clients with financial information or disclosures about their financial condition. We have no financial commitments that impair our ability to meet our contractual or fiduciary commitments to you, and we have never been the subject of any bankruptcy proceeding.
You must deposit $0.01 to open this account.
We reserve the right to delay the availability of funds for any deposits for a time period determined at our
Per your agreement with Qapital, all funds held in this checking account will be transferred to your
investment account with Apex on the next business day. No other deposits or withdrawals can be made
to this account.
Maximum amount that can be transferred to Apex per ACH transaction is $50,000. This account only receives e-statements.
This account is for electronic transactions only and is for the sole purpose of holding funds to be transferred to the investment account with Apex. No checks can be written on the account. A debit card will not be issued.
Please refer to Terms and Conditions from Qapital and Apex
Lincoln Savings Bank has the right to pay or satisfy any of your debts by
applying funds from any Bank account held by us including the Goal and Spending Account.
You must be a resident of the United States and at least 18 years of age.