client advisory agreement

I want to Draft new or UPDATE my client advisory agreement that PROTECTS ME 100% for Advanced planning strategies I offer my clients as an Independent RIA registered at the state level.

In the attached INTRO letter I list a LOT of services that I offer my clients as a HOLISTIC plan these need to incorporated INTO this agreement to checked off as a la cart or as a FULL Boat option.

Provisions I want incorporated to PROTECT me from unscrupulous clients:
1. ANY vendors of any kind I introduce to the client while implementing the plan is MY Intellectual property so IF the client leaves me they CANNOT continue to do business with that entity.

2. Full Non disclosure of my planning techniques directly or indirectly to ANYONE.

3. A payment schedule for fees to picked and signed off

4. Any lawsuit or any complaint with ANYONE from the client will REQUIRE advance payment to my firm ARPP LLC dba Sabur Private Wealth Mgt to defend against such claim and IF I lose then my firm can reimburse client.

5. ONLY Arbitration is available to settle disputes AFTER the client has attempted to resolve it with me directly. All complaints MUST be kept confidential and client is FORBIDDEN from posting ANY online review or will be responsible for damages to reputation at a minimum cost of $100,000 plus legal fees.

6. Any other ideas you can think of to protect me.

Fundamentally I as an RIA firm want to have MAXIMUM protection from any frivolous law suit by my existing or future clients AND I want to OFFER a “Money Back guarantee” to the extent that my firm was not able to actually provide the services or solve the problems IDENTIFIED in the original proposal to avoid “scope creep”.
You will have to use your legal and business acumen to bridge these ideas.
Continuing on: I also want to incorporate either as an addendum or within the agreement that EACH referral from an existing client will receive a $5000 deduction from the referrers current advisory fees UPON the referred becoming a client of the firm. The referred client MUST have min $500k+ income AND $5 Mil networth to qualify.

I need the following information from you

1.What is the term of the Contract
2. Dispute resolution mechanism (mediation/Arbitration/litigation etc)
3. Which state is your company/business located at?
4. What can make you terminate the contract?
5. Any payment terms?

6. Do you have any intellectual property that needs to be protected

RESPONSES:
1. Fiscal year contract. After the initial deposit the remaining payments must be made monthly via EFT.

Fee formula is:

$30,000 al a cart on a project basis on any services listed in the INTRO letter
or 2% of GROSS networth (Assets + Liabilities) for the 1st year of plan then 1% of GNW thereafter on an at will basis for planning strategy. There will ALWAYS be a 1% continuing AUM fee on any portfolio we advise on either custodied under our guidance or with any 3rd party. All fees paid are considered earned and not refundable.

This contract will automatically renew unless cancelled with a 45 days notice prior to end of the fiscal year. Upon renewal it will continue the next full year with the client fully liable for payments

2. Dispute resolution MUST first be directed to Sabur PWM for a direct resolution BEFORE any 3rd party can be involved. The second option is MEDIATION only by ??? — (keep this out of arbitration and court) Client shall PAY ALL fees on behalf of both parties and only IF Sabur pwm is found to be at fault a reimbursement of no more than $250/hr upto 10 hrs shall be repaid to client regardless of the actual costs incurred by the client.

3. To avoid having to domesticate claims in case of litigation I was thinking to have the dispute / mediation occur in the client’s state. — your thoughts?

My firm is state registered with NJ and TX.

4. Sabur PWM of course does not want to terminate the contract BUT if the client is “unruly” or demonstrates a threatening behavior as deemed by SABUR PWM then services may be terminated at our discretion BUT the client shall owe all fees due for the fiscal year.

A STRONG COLLECTION clause must be placed with a default interest rate on funds due. for example NJ offers a 16% default rate.

5. Payment terms — At least 25% down payment [2% GNW fees only] + 11 equal monthly payments paid via EFT beginning the 1st of the following month of this fiscal year.

For ala cart services full payment is due at time of inception.

6. Yes. Any and ALL vendors, CPA’, Tax attorneys, custodians, insurance companies, trust companies, asset managers and the WAY we “cook the dish” is all IP and must be protected by the client and not disclosed. If the client contract is terminated by Sabur or non renewed by client THEN ALL client assets will be liquidated immediately and check will be mailed to the client — Client is NOT ALLOWED to utilize the services of any vendor introduced by SABUR and will expressly confirm to avoid the continued use of same. An ongoing damages fees of $10,000/YR (or another amount you suggest) shall be paid to SABUR as long as client uses these services. [Same collection process and default rates apply as to original fee agreement]