Notice 2 of 2 – Proposed procedural and non-substantive changes to your Agreement with us

HFMC Asset Management Limited (“We/us/HFMCAM”)

 Your Quadrant TM Portfolio Management Agreement with us (“your Agreement with us”)

We are writing to give you 30 days’ notice of proposed changes to your Agreement with us, as required by clause 10 ii of the Agreement.

If you wish to object to the proposed changes you must do so by 1st January 2021.

This notice (Notice 2 of 2) describes explains what we consider to be procedural and non-substantive proposed changes to the Agreement.

Notice 1 of 2 https://www.hfmcwealth.com/substantive-contract-changes-to-hfmcam-terms-and-conditions/ describes and explains what we consider to be substantive proposed changes to the Agreement.

 The proposed procedural and non-substantive changes

General
We have prepared a new pack of provisions which we have called the Application and Terms of Business Pack. The pack includes:

  • a Terms of Business Section (a section currently titled the “Management Agreement”)
  • a Definitions Section (a new section bringing together the definitions used throughout the pack)
  • a Responsibilities and Fees and Charges Section (a new section setting out the respective responsibilities of your HFMC Wealth advisory firm, HFCAM and the Custodian, and new fees and charges structure explained in Notice 1 of 2)
  • a Custodian’s Terms of Business Section (a section currently called “PSL Enclosures for Terms of Business with Investors”)
  • an Application Form

We have made greater use of shorter and numbered clauses and sub-clauses to make the text less dense, easier to read and easier to find and refer to.

We have highlighted defined terms in bold.

Old provision New provision
Clause 1 Clause 1 (Introduction) We have expanded the Introduction to include references to other parts of the Application and Terms of Business Pack and to clarify the documents that make up the contract between you and us.  We state expressly that the defined terms in the Definitions Section of the pack will apply to the Terms of Business Section (as they apply throughout the pack).
Clause 2 (HFMCAM). We have added a separate clause to describe HFMCAM.
Clause 3 (Your categorisation as a retail client). We have added a separate clause to confirm our treatment of you as retail client.
Clause 4 (Our services). We have added a separate clause to describe the services we will provide.
Clause 5 (Responsibilities and Fees and Charges). We have added a new clause to refer to the Responsibilities and Fees and Charges Section of the new Application and Terms of Business Pack. We state that that section sets out the respective responsibilities of your HFMC Wealth advisory firm, HFMCAM and the Custodian, and the fees and charges payable by you for the services provided. We also use the new clause to clarify that you must remain a client of an HFM Wealth advisory firm and the Custodian.
Clause 2 Clause 6 (Reporting). We have moved the detail on reporting to the Responsibilities and Fees and Charges Section of the new pack and we use the clause simply to confirm that we will arrange for the Custodian to report to you as set out in that section.
Clause 3 Clause 7 (Delegation, Use of Agents, Dealing and Counterparties). We had added a sub-clause to clarify that the clause applies to situations other than our arrangement of custody and dealing services with the Custodian (and to refer to clause 23 for that situation).
Clause 4 Clause 8 (Material Interests and Disclosure). We have added the word “Conflicts” to the title of the clause and included new sub-clauses dealing with conflicts of interest.
Clause 5 Clause 9 (Liability).  No material change.
Clause 6 Clause 10 (ISAs). No material change.
Clause 7 Clause 11 (Force Majeure).  No material change.
Clause 8 Clause 12 (Warranties and Undertakings).  No material change.
Clause 9 Clause 13 (Instructions and Communications).  We have added a sub-clause to make it clear that HFMCAM will communicate with you, and send you documents and information, in English.
Old provision New provision
Clause 10 Clause 14 (Amendments). We have added a sub-clause that changes to fees and charges may be made in the circumstances described in new sub-clause 31.8 (Fees and Charges), by three months prior written notice to you.
Clause 11 Clause 15 (Warnings).  No material change.
Clause 12 Clause 16 (Complaints). No material change.
Clause 13 Clause 17 (Compensation). We have updated the maximum limit for compensation that applies to most types of investment business.
Clause 14 Clause 18 (Termination of Agreement). We have added a sub-clause 18.3 iii to clarify that HFMCAM reserves the right to terminate the Agreement immediately in writing if you case to be a client of an HFMC Wealth advisory firm and/or the Custodian.
Clause 15 Clause 19 (Consequences of Termination).  No material change.
Clause 16 Clauses 20 & 21 Confidentiality and Disclosure/Data Protection).  We have renumbered sub-clause 16.1 as new clause 20 and sub-clause 16.2 as new clause 21.
Sub-clause 16.1 Clause 20 (Data Protection). We have updated the references to the Data Protection Act 1998 to the Data Protection Act 2018.
Sub-clause 16.2 Clause  21 (Confidentiality).  No material change.
Clause 17 Clause 22 (Assignment).  No material change.
Clause 18 Clause 23 (Custody and Custodian/Custody, dealing and the Custodian).  We have changed the heading so that it expressly includes the dealing services provided by the Custodian.  We have added a new sub-clause 23.1 to expressly state that our role is to arrange custody and dealing services with the Custodian.  We have made reference to the details of the Custodian’s responsibilities in the Responsibilities and Fees and Charges Section of the new pack.  We have also added text to new sub-clause 23.14 to make it clear that HFMCAM will act as for your agent in appointing any new Custodian.
Clause 19 Clause 24 (Joint Account). No material change.
Clause  20 Clause 25 (Additional Provisions). No material change.
Clause 21 Clause 26 Addresses for Notices). No material change.
Clause 22 (Definitions).  We have moved the definitions in this clause to the Definitions Section of the new pack, amending them as appropriate.
Clause 23 Clause 27 (Asset Classes).  We have added a new sub-clause 27.1 to clarify that the clause applies to the accounts with your Quadrant TM Portfolio which we manage on a discretionary basis.
Clause 24 Clause 28 (Restrictions). We have added a new sub-clause 28.1 to clarify that the clause applies to the accounts with your Quadrant TM Portfolio which we manage on a discretionary basis.
Clause 25 Clause 29 (Voting Rights). No material change.
Clause 26 Clause 30 (Base Currency).  No material change.
Clause 27 Clause 31 (Fees and Charges).  We have made substantive changes to this clause. Please see Notice 1 for an explanation of the changes and the reasons for making them, and please also see the Responsibilities and Fees and Charges Section of the new pack for the detailed fees and charges structure.  As mentioned in relation to new clause 14 (Amendments), we have added a new sub-clause 31.8 to describe circumstances in which we and/or HFMCAM may choose to increase our fees and charges and reiterate the notice which we are required to give you.
Clause 28 Clause 32 (Your consent). We have added a sub-clause to reiterate that our Agreement (which we refer to as Terms of Business) with you are contained in a number of documents in the new Application and Terms of Business Pack.
Definitions Section
As mentioned above, this is a new section bringing together the definitions used throughout the pack, including those in the Custodian’s Terms of Business Section.
Responsibilities and Fees and Charges Section
Again, as already mentioned, this is a new section setting out the respective responsibilities of your HFMC Wealth advisory firm, HFCAM and the Custodian, and new fees and charges structure explained in Notice 1 of 2.  The Fees and Charges Section replaces our “Quadrant Portfolio Fees” document and the fees and charging information in the Custodian’s “Guide to Pershing Services (GPS)”.
Custodian’s Terms of Business Section (currently titled “PSL Enclosures for Terms of Business with Investors”)
In agreement with the Custodian, we have made minor changes to make the section conform to the changes in other documents, primarily our (HFMCAM’s) Terms of Business Section, and the following substantive changes:

  • to clause 1.12, to replace references to information relating to fees and charges in the GPS with references to the Responsibilities and Fees and Charges Section (to reflect the proposed changes to the fees and charges structure explained in Notice 1 of 2);
  • by adding new clauses 3.5 and 19.5, to clarify that we may terminate your Terms of Business with us if you cease to be a client of the Custodian appointed by us;
  • to clause 12.1, also to replace a reference to information relating to fees and charges in the GPS with references to the Responsibilities and Fees and Charges Section (to reflect the proposed changes to the fees and charges structure explained in Notice 1 of 2);
  • by removing clause 12.2 and 12.3, also to reflect the proposed changes to the fees and charges structure explained in Notice 1 of 2
  • by removing Annex 1 (Glossary), to reflect the fact that the definitions in the annex have been moved to the Definitions Section in the new pack.
Application Form
The application form contains descriptions of our service options and model portfolios which are relevant to the services we provide under our Terms of Business.