Client Contracts
Chapters in this video
- 0:00 Mandatory contract ingredients and the brochure trap
- 2:53 The assignment trap: control and greater than 25%
- 4:25 Partnership shakeups: minority notice versus majority consent
- 5:16 Performance fee prohibitions and qualified client thresholds
- 7:02 Fulcrum fees: symmetrical adjustments and the 20% BDC exception
- 8:14 Rapid-fire exam recap
What this video covers
- The seven specific terms that must appear in writing inside an advisory contract, and why brochure delivery and renewal terms are deliberately excluded
- What counts as an assignment of an advisory contract, including the greater than 25% voting securities presumption from Form ADV
- Why a minority partnership change requires only client notice, while a majority partnership change requires actual consent
- The general prohibition on performance fees based on capital gains or capital appreciation
- The qualified client thresholds of $1.4 million assets under management (AUM) or $2.7 million net worth (excluding primary residence)
- The symmetrical fulcrum fee structure: required for registered investment companies and clients with over $1 million under contract
- The 20% realized net capital gains ceiling for business development company performance fees
Read the full lesson, free
This video's complete written lesson is free to read in the CertFuel app, no signup wall. The complete Series 66 course also includes adaptive practice questions and spaced-repetition flashcards.