Sample Solicitor Agreement and Solicitor`s Disclosure Statement

Interactive Brokers is providing this template investment advisor Solicitor Agreement
as a courtesy to investment advisors trading through the IB platform. This template is
designed to focus on the general requirements by investment advisors registered with
the Securities and Exchange Commission (“SEC”). Many, but not all, states have the
same or similar requirements.
Advisors planning to use this template to draft their own Solicitor Agreement should
review it carefully and consult with legal counsel to ensure that the document is
appropriately customized. Among other things, firms should ensure that the Solicitor
Agreement they use complies with applicable laws, including any state laws that may
differ from the federal statutes and SEC rules that form the basis of this template. If
you are a state-registered advisor, you should research the rules in your particular
This template should not be construed as legal advice and has not been tailored to
address the particular circumstances of any specific registered investment advisor.
Please also note that this template was written for arrangements between advisors and
solicitors that are both organizations/companies. If either the advisor or solicitor is
an individual, you should change the pronouns used accordingly.
This Solicitor Agreement (“the Agreement”) is entered into by and between
[name of Solicitor] (“Solicitor”) and [name of Registered Investment Advisor]
(“Advisor”), an investment advisor registered with the United States Securities and
Exchange Commission (“SEC”) under the Investment Advisers Act of 1940 (“the Act”)
[or a registered investment advisor with the states of [states with which Investment
Advisor is registered]], and sets forth the terms and conditions under which Solicitor will
assist the Investment Advisor in establishing client relationships.
Solicitor’s Representations
a. Solicitor represents that neither Solicitor nor any of its agents:
i. Is subject to an SEC order issued under Section 203(f) of the
ii. Has been convicted of any felony or misdemeanor involving
conduct described in Section 203(e)(2)(A) through (D) of the
Act within the ten years before the date Solicitor signs this
iii. Has been convicted or found by the SEC to have engaged in
any of the conduct specified in Section 203(e) of the Act; or
iv. Is subject to an order, judgment or decree described in Section
203(e) of the Act.
b. Solicitor will promptly notify Advisor if any of the representations and
warranties in paragraph 1(a) ceases to be true.
c. Solicitor understands that it must comply with all applicable rules and
regulations in connection with the solicitation services provided under
this Agreement, including all federal and/or state laws, rules and
regulations, and the applicable rules of self-regulatory organizations
that may have jurisdiction over Advisor’s investment advisory
business. Solicitor understands that the requirements for client
solicitation may differ from state to state. Some states may not have
any requirements regarding the solicitation of clients while other states
may require that Solicitor be registered as an investment advisor to
solicit clients on Advisor’s behalf.
d. Solicitor further represents and warrants that Solicitor is and will
remain at all times during the term of this Agreement, properly
registered, licensed and/or qualified under applicable federal and/or
state laws, rules and regulations, and the applicable rules of selfregulatory organizations that may have jurisdiction over Advisor’s
investment advisory business.
e. Solicitor will promptly notify Advisor if at any point it ceases to be
appropriately registered or licensed, to the extent required.
f. Solicitor will make available to Advisor all such registration, licenses
and other documents as Advisor may reasonably request during the
term of this Agreement.
g. If Solicitor is registered as an investment advisor, Solicitor warrants
that all amendments to Form ADV required by the Act and/or
applicable state securities laws and rules have been made and filed
with the SEC and/or each applicable state securities regulator.
Solicitor agrees to amend its Form ADV to disclose the relationship
created by this Agreement if such amendment is necessary.
h. If Solicitor is a corporate entity, all of the above representations are
true for any officer, director, partner, member, employee, agent or
representative acting for Solicitor. And in such case, Solicitor is solely
and exclusively responsible for the supervision of the activities of its
own officers, directors, partners, members, representatives, employees
and other agents.
Advisor’s Representations
Advisor is registered as an investment advisor with the SEC [or any states
where registered].
Relationship Between Solicitor and Advisor
a. Solicitor is an independent contractor. Nothing contained in this
Agreement will be construed to create a relationship of employeremployee, agency, representative, partnership, joint venture, or any
relationship other than that of an independent contractor. Solicitor will
inform each client that Solicitor is an independent contractor engaged
to perform the services described in this Agreement and not employed
by Advisor.
b. Solicitor will not provide any investment advisory services of any type
on behalf of Advisor, and will not make any representations that would
reasonably cause a potential client to believe that Solicitor is rendering
or will render investment advisory services on Advisor’s behalf.
c. Solicitor understands that Advisor cannot guarantee that its clients’
accounts will be profitable and that there can be no assurance that
Advisor’s services to any Solicited Client will not result in losses.
Solicitor’s Duties
a. Solicitor will use its best efforts to only solicit or refer clients to
Advisor individuals or entities Solicitor believes are suitable and
appropriate for the investment advisory services provided by Advisor.
b. Solicitor will not solicit or refer clients to Advisor in any jurisdiction
unless and until notified by Advisor that both Advisor and Solicitor are
legally authorized to do so under applicable federal and state securities
c. Solicitor has no authority to bind Advisor in any way and will only
make representations to clients about Advisor and its investment
advisory services that are:
i. Expressly authorized by this Agreement;
ii. Contained in Advisor’s Form ADV;
iii. Contained in Advisor’s Investment Advisory Agreement with
its clients; or
iv. Contained in marketing materials provided by Advisor for
Solicitor’s use, as amended from time to time.
d. Solicitor understands the investment advisory services and programs
offered by Advisor. Solicitor agrees to use the most current
information and materials available describing Advisor’s services and
programs when recommending Advisor’s services.
e. In soliciting clients for Advisor, Solicitor will use only investment
advisory and marketing materials provided by or approved by Advisor.
Solicitor will not publish advertisements, distribute sales or
promotional literature or engage in any communication describing
Advisor’s services without obtaining prior written approval from
Advisor concerning the use of such materials or communication.
f. When soliciting a client, Solicitor will provide any prospective client
with the following (in addition to any approved marketing materials):
(1) a copy of Advisor’s current Form ADV Part 2 or Advisor’s
Disclosure Brochure, and (2) Solicitor’s Disclosure Statement, a
sample of which is attached to the Agreement as Exhibit 1.
g. Advisor may also require Solicitor to provide prospective clients with
a copy of Advisor’s Privacy Policy at the time of the initial
solicitation, as well as other information or questionnaires that Advisor
may provide and request Solicitor to supply to prospective clients.
h. At the time it solicits a client, Solicitor will obtain each prospective
client’s written acknowledgment that he or she received Advisor’s
Form ADV Part 2 and Solicitor’s Disclosure Statement, retain a copy
of the client’s written acknowledgement, and provide the original of
that written client acknowledgment to Advisor.
i. Solicitor understands that Advisor may decline to accept or decide to
cease doing business with any prospective client referred by Solicitor.
Solicitor does not have any authority to accept any clients on behalf of
Advisor, and Advisor is not obligated to accept any prospective client
referred by Solicitor. Any prospective client that becomes a client of
Advisor as a direct result of Solicitor’s efforts is hereafter referred to
as a “Solicited Client.” Advisor may terminate its relationship with
any Solicited Client at any time, with or without cause, in accordance
with the terms of the Investment Advisory Agreement, without any
obligation to Solicitor. Similarly, any Solicited Client is free to
terminate its relationship with Advisor at any time, with or without
cause, in accordance with the terms of the Investment Advisory
Agreement, without any obligation of Advisor to Solicitor.
j. Solicitor will communicate with Solicited Clients as necessary to assist
Solicited Clients in understanding Advisor’s advisory services and/or
obtaining or updating information about Solicited Clients for Advisor.
k. Solicitor will keep confidential any information obtained from or
about any prospective client and Solicited Client in connection with
this Agreement, and will not disclose any such information without
client consent.
l. Solicitor will keep confidential all ideas, techniques, and materials
supplied by Advisor and shall not reproduce or distribute any of these
to any other person at any time or use these after the termination of
this Agreement without Advisor’s express written consent.
m. Solicitor will prepare and maintain all books and records requested by
n. Solicitor shall promptly forward to Advisor any prospective client or
Solicited Client complaint and any inquiry by any federal or state
regulatory agency or any self-regulatory organization.
o. Solicitor shall cooperate with Advisor in the investigation and defense
of any complaint, inquiry, arbitration, litigation, or other proceeding
involving a prospective or Solicited Client.
p. Solicitor shall ensure that all checks, money orders or wires of money
to be placed under Advisor’s management by Solicited Clients are
made payable and sent by Solicited Clients to the custodial brokerdealer, bank, insurance company, mutual fund or other qualified
custodian. Solicitor agrees not to accept cash or any other instrument
payable to Solicitor or Advisor.
q. Solicitor will perform its responsibilities under this Agreement in
accordance with the instructions of Advisor and the provisions of the
Act and the rules thereunder, including Rule 206(4)-3, and/or any
applicable state laws.
Advisor’s Duties
a. Advisor will provide or make available its current Form ADV Part 2 to
b. Advisor will also provide or make available its current Privacy Policy
to Solicitor if needed.
c. Advisor may make available advisory marketing materials for
Solicitor’s use, or will work with Solicitor to create marketing
materials for Solicitor’s use.
d. If authorized in writing by a Solicited Client, Advisor will deliver to
Solicitor copies of account statements and performance reports with
respect to the Solicited Client’s account(s) under Advisor’s
supervision or management.
Solicitor Compensation
a. Advisor will pay Solicitor for the solicitation services provided by
Solicitor, ______ % of the investment advisory fees paid per annum by
Solicited Clients, for so long as this Agreement remains in effect.
Advisor will pay Solicitor the percentage of advisory fees owed to it
on a quarterly basis, within 30 days of the end of the fiscal quarter in
which Advisor receives the advisory fees paid by the Solicited Clients.
Advisor has no obligation to pay Solicitor any percentage of fees
earned until Advisor receives such fees from the relevant Solicited
b. Advisor will not pay Solicitor compensation (and Solicitor must
refund Advisor) any fees paid by Solicited Clients that have been
refunded to Solicited Clients for any reason. Advisor may elect, in its
sole discretion, to offset any such amounts against future payments to
c. Advisor will only continue to pay fees to Solicitor for soliciting a
particular client so long as that Solicited Client remains a paying client
of Advisor. Advisor will continue to pay Solicitor for any terminated
client only up until Advisor’s last billing date for that client.
d. Advisor is not obligated to make any payment to Solicitor if such
payment constitutes a violation of applicable federal or state laws.
e. This Agreement will not result in Advisor charging Solicited Clients a
higher advisory fee than it would charge them if they had not been
referred to Advisor by Solicitor.
Solicitor to Act Exclusively for Advisor
a. During the term of this Agreement, Solicitor shall exclusively act as a
solicitor of investment advisory business for Advisor, and shall not
take any action to:
i. Refer a potential client to another investment advisor;
ii. Induce or solicit any Solicited Client to terminate his or her
relationship with Advisor; or
iii. Reduce the amount of assets of such Solicited Client managed
by Advisor.
b. Solicitor acknowledges that Advisor shall have the right to enter into
solicitation agreements with other persons.
The parties will indemnify each other, their officers, directors, managers,
and employees and hold them harmless against any claims, losses,
damages, liabilities, costs and/or expenses, including reasonable attorney’s
fees and costs of investigating and defending against any claims, suits,
actions or proceedings, incurred by them arising out of any breach, act or
omission or violation of law or any of the terms of this Agreement.
Parties’ obligations under this paragraph will survive the termination of
this Agreement.
Compliance with Regulation S-P
Notwithstanding any contrary provision in this Agreement, each party
agrees that any “nonpublic personal information” as defined under Section
248.3(t) of Regulation S-P (“Regulation S-P”) promulgated under the
Gramm-Leach-Bliley Act, disclosed by a party is for the specific purpose
of permitting the other party to perform the services set forth in this
Agreement. Each party agrees that, with respect to such information, it
will comply with Regulation S-P and the Gramm-Leach-Bliley Act and
that it will not disclose any nonpublic personal information received in
connection with this Agreement to any other party, except to the extent
necessary to carry out the services set forth in this Agreement or as
otherwise permitted by Regulation S-P or the Gramm-Leach-Bliley Act.
Both parties agree to comply with all other applicable federal and state
laws, rules and regulations pertaining to the confidentiality of client
information and will take reasonable measures to safeguard any nonpublic personal information maintained or shared under this Agreement.
a. This Agreement will remain in effect until terminated at any time by
either of the parties upon five (5) days’ advance written notice.
b. Upon termination of this Agreement, each party will keep confidential
any proprietary information or client information obtained during the
term of the Agreement, including sales or marketing material, client
information or lists, and will return such information upon the request
of the other party, except as may be required to be maintained under
the Act or other applicable federal or state law or as may be required to
be disclosed by law.
c. Upon termination of this Agreement, Advisor may continue to act as
investment advisor to any Solicited Client.
Governing Law
This Agreement shall be governed by and construed in accordance with
the laws of the State of ________ without giving effect to its conflict of
laws principles, except and to the extent superseded by federal law.
a. Any dispute arising out of this Agreement shall be subject to final and
binding arbitration according to the Commercial Arbitration Rules of
the American Arbitration Association then in effect. Judgment upon
any arbitration award may be entered in any court, state or federal
court, having jurisdiction. The prevailing party in any arbitration and
other legal proceeding under this paragraph shall be entitled to recover
reasonable attorney’s fees, costs and expenses.
b. Both parties note the following provisions regarding arbitration:
i. 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.
ii. Arbitration awards are generally final and binding and a party’s
ability to have a court reverse or modify an arbitration award is
very limited.
iii. The ability of the parties to obtain documents, witness
statements and other discovery is generally more limited in
arbitration than in court proceedings.
iv. The arbitrators generally do not have to explain the reason(s)
for their award.
v. The rules of some arbitration forums may impose time limits
for bringing a claim in arbitration.
vi. In some cases, a claim that is ineligible for arbitration may be
brought in court.
vii. The rules of the arbitration forum in which a claim is filed, and
any amendments thereto, shall be incorporated into this
Amendment and Assignment
a. This Agreement may only be amended in a writing signed by both
parties. To the extent the parties are organizations, this writing must
be signed by an Officer or Director of the party.
b. This Agreement shall be binding upon and inure to the benefit of the
parties, their heirs, successors or assigns.
c. Solicitor may not assign or delegate the rights or performance under
this Agreement by operation or law or otherwise without Advisor’s
prior written consent.
d. No person other than Advisor and Solicitor shall have any rights or be
entitled to any benefits under the terms and conditions of this
No term or provision of this Agreement will be deemed waived and no
breach excused, unless and until such a waiver or consent is in writing and
signed by the waiving or consenting party. Waiver of one breach shall not
be deemed to be a waiver of any other breach of the same or any other
provision herein.
Any notice to be given to Solicitor or Advisor under this Agreement shall
be deemed effective if sent by certified mail, overnight delivery or email,
with return receipt requested, to the address set forth on the signature
Entire Agreement and Severability
a. This Agreement contains the entire agreement between the parties,
who have made no other representations or warranties.
b. If any provision of this Agreement is unenforceable, it shall not
invalidate any other provisions.
c. Failure of either party to enforce any term or condition of this
Agreement is not a waiver of that term or condition.
This Agreement may be executed in counterparts, each of which shall be
deemed an original. Such counterparts, when taken together, shall
constitute one and the same Agreement.
This Agreement is made as of ______________ and shall become effective immediately,
but Solicitor may only commence services on behalf of Advisor when permitted under
the provisions of this Agreement.
On Behalf of Solicitor
On Behalf of Advisor
___________________________________ ___________________________________
___________________________________ ___________________________________
The purpose of this Solicitor’s Disclosure Statement is to comply with the
requirements of Rule 206(4)-3 of the Investment Advisers Act of 1940 (the “Act”), and to
inform you, [Name of Client] (“Client”) that [Name of Solicitor] (“Solicitor”) currently
serves as a unaffiliated solicitor for [Name of Registered Investment Adviser]
(“Investment Advisor”), a registered investment advisor under the Act.
Client hereby acknowledges receiving and understanding the following
disclosures provided by Solicitor:
Solicitor and Investment Advisor have entered into a written agreement
whereby Solicitor will use its best efforts to solicit and refer as clients to
the Investment Advisor those individuals or entities that it believes are
suitable and appropriate for the investment advisory services provided by
the Investment Advisor, in exchange for cash commissions to be paid by
Investment Advisor.
Investment Advisor will pay Solicitor ______ % of the investment
advisory fees paid per annum by Client to Investment Advisor.
Investment Advisor will not charge Client any additional fees as a result
of its agreement with Solicitor. The amount of fees that Investment
Advisor will charge Client for investment advisory services is the same as
what it would customarily charge any new client who was not referred by
Solicitor may make periodic contacts with Client as necessary to assist
Client in understanding Investment Advisor’s services and/or obtain
additional information from Client on behalf of Investment Advisor.
Solicitor is an independent contractor, and is not an affiliate, agent,
representative, partner or employee of Investment Advisor.
Solicitor is not authorized to and will not provide investment advice or
manage investments on behalf of Investment Advisor.
Solicitor does not have authority to accept a client agreement on behalf of
Investment Advisor or to collect or receive payment in its own name for
any of the Investment Advisor’s services. All client agreements with the
Investment Advisor are subject to acceptance by the Investment Advisor.
Acknowledgment of Receipt of Disclosures and Documents:
By signing below, Client acknowledges receiving this Solicitor’s Disclosure
Statement, with all disclosures recited above, as well as a copy of Investment Advisor’s
Form ADV Part 2.
Client also acknowledges that by signing this Solicitor’s Disclosure Statement, it
is not entering into any relationship with Investment Advisor for investment advisory
services. Such services are only available pursuant to a separate agreement with
Investment Advisor.
Client Printed Name
Client 2 Printed Name (if applicable)
___________________________________ ___________________________________