These terms (the “Investment Terms”) apply to the provision of certain advisory and discretionary investment services to you by Wealthsimple UK Ltd (‘Wealthsimple’, ‘us’, ‘our’, ‘we’) in relation to your Accounts. Wealthsimple UK Ltd is a company incorporated and registered in England with company number 10154561, whose registered office is Nova South, 9th Floor, 160 Victoria Street, London, SW1E 5LB and is authorised and regulated by the Financial Conduct Authority (“FCA”) (firm reference number 747883).
In these Investment Terms:
“Account/s” means each account opened by you with Wealthsimple for investment in the plan set out in your Investor Policy Statement.
“Child” means the child who is the beneficial owner of the JISA account and in whose name the JISA account is opened.
“Custodian” means the custodian of your cash and assets whose details are set out in the Custody Terms.
“Discretionary basis” means we make all the decisions about what you should invest in unless we have agreed to follow any restrictions you have set.
“Execution-only basis” means we will carry out your instructions to buy and sell securities, but will not give you advice about the securities.
“Investor Policy Statement” means the investment policy, objectives and restrictions set out in a document provided to you following the suitability assessment as amended from time to time.
1.1 These Investment Terms set out the terms on which Wealthsimple may recommend a Plan to you and provide you with certain investment services in relation to your Accounts. These Investment Terms apply to an Account from the point that you click “I agree” in relation to that Account. You acknowledge that these Investment Terms give Wealthsimple certain discretionary powers over the assets held in your Account.
1.2 Wealthsimple provides you with a simple advisory service with a view to you investing your chosen lump sum and/or regular payment into one of our standard investment portfolios. While we will ask you certain questions about your financial circumstances, such as your level of debt and type of income, this is to help us identify which portfolio is suitable for you to invest these sums of money. We will not advise you on the entirety of your financial circumstances. For example, our simplified service will not advise you on any existing investments you may hold, the efficiency of your approach to paying off any debts, tax efficiency or whether any particular income needs will be met. Should you need advice on your wider personal financial circumstances, you can contact an independent financial adviser.
1.3 In addition to these Investment Terms, which include the Schedules, the following additional terms apply:
(a) the Custody Terms. Wealthsimple does not itself hold the funds or assets in your Accounts.Instead, Wealthsimple arranges for these funds and assets to be held in custody by the Custodian. The Custody Terms are set out in Schedule 5 and contain the terms on which the Custodian provides its custody services to you;
(b) where your Account is an ISA Account, the ISA Terms set out in Schedule 7;
(c) where your Account is an JISA Account, the JISA Terms set out in Schedule 8:
(d) where your Account is a Pension Account, the Pension Terms set out in Schedule 9;
1.4 You warrant that you are:
(a) duly authorised to enter into these Investment Terms;
(b) resident in the UK;
(c) over the age of 18 (or 16 if you are opening a JISA account); and
(d) the sole owner of the funds invested into Account and are the only person entitled to the funds and assets held in your Account.
You will promptly notify us if any of these warranties ceases to be true.
1.5 It is important that you read and ensure you understand the Risk Warnings notified to you and available on our Website. A copy is also made available in Schedule 2 of these Investment Terms.
1.6 You acknowledge that an investment in a Plan carries with it the risk of loss to your capital invested. Furthermore, Wealthsimple gives no assurance or guarantee that the value of investments in your Account will not go down or that the investment held in your Account will generate either profits or income, or that any investment or savings goals you may have (even where you have notified us of them) will be achieved.
1.7 Wealthsimple does not provide you with any taxation advice or administration, legal or accounting services.
Our standard of care
Wealthsimple shall provide the services under these Investment Terms in accordance the degree of care, diligence and skill that a reasonably prudent portfolio manager would exercise in the circumstances.
3.1 Wealthsimple will classify you and treat you as a Retail Client for the purposes of the FCA Rules. This means that you are entitled to the protections available to Retail Clients under the FCA Rules.
Scope of the Service
4.1 Wealthsimple will set up an Account for you, and you agree that we shall and authorise us to:
(a) provide you with a personal recommendation as set out in your Investor Policy Statement. This recommends that savings made through your Account are allocated into a portfolio of investments balanced according to our assessment of what is suitable for you, based on our consideration of your responses to our questions and any other specific circumstances that you communicate to us;
(b) have discretion to manage the investments in your Account in accordance with the target asset allocation (the “Target Asset Allocation”) recommended in your Investor Policy Statement and make other investment decisions and investments as part of efficient portfolio management.
Scope of our advice
4.2 Wealthsimple provide a restricted advice service in that we will only advise you on regulated pooled collective investment schemes and not other types of investments that might be relevant to a retail investor, such as life policies, structured products or investment trusts. We also do not provide advice on direct investment in stocks and shares.
Scope of our discretion
4.3 Following our assessment of your objectives and investor profile, we will recommend in your Investment Portfolio Statement the Target Asset Allocation we consider suitable for you.
4.4 We will keep the Target Asset Allocation under review to ensure it remains suitable for you, given the investor profile set out in your Investment Portfolio Statement. Our recommended Target Asset Allocations are made with a view to long term investment and take account of your time horizon and risk tolerance for falls in the value of your investment, as recorded in your Investment Portfolio Statement. Accordingly, unless we have agreed a change to your Investment Portfolio Statement with you, we will only change your Target Asset Allocation in exceptional circumstances taking into account our reasonable assessment of likely economic and investment performance trends over the long term. Wealthsimple will not change your Target Asset Allocation to take account of short or medium term performance.
4.5 Our discretion to manage your Account includes acting as your agent to buy and sell investments to be held in your Account. We will use this authority to buy the initial investments recommended to be held in your Account and enter into any necessary associated transaction or arrangement but may also buy or sell investments in your Account:
(a) in order to re-balance your portfolio from time to time in accordance the Target Asset Allocation recommended in your Investor Policy Statement;
(b) to change and replace our selection of particular investments within your Account (such as the Exchange Traded Funds we select) as we think appropriate taking into account matters that appear to us to be relevant to the ongoing suitability of that investment for your Account; or
(c) to reflect an adjustment to your Target Asset Allocation for your Account.
4.6 You authorise Wealthsimple to enter into foreign exchange transactions and other options or futures in relation to foreign exchange as necessary to transact investments for your Account and for efficient portfolio management.
4.7 Our discretion to manage your Account also includes exercising on your behalf any entitlements, rights or benefits arising in connection with the investments. Under this authority we may exercise or refrain from exercising any right conferred by a particular investment such as voting rights or a right to buy, sell, subscribe for, exchange or redeem an investment and we may exercise on your behalf any governance or ownership right conferred by a particular investment.
Your personal circumstances
4.8 We strongly recommend that you contact us if there is a change in your personal circumstances that means your investor profile has changed or that you think should be taken into account in terms of your Investor Policy Statement.
4.9 We will contact you every twelve to eighteen months with a view to obtaining from you an update on your personal circumstances and investor profile, but if you do not respond or provide us with the information we ask for, we will not be able to (and accordingly have no duty to) update your Account and/or Investor Policy Statement.
4.10 You may however contact us at any time if you wish to discuss with us your Investor Policy Statement or the allocation to or performance of investments in your Account.
4.11 Where you contact us or respond to our request for an annual review, we may agree to provide you with a revised personal recommendation. In this event, we will issue you with a revised Investor Policy Statement.
Maintaining the balance of your Target Asset Allocation
4.12 The Target Asset Allocation percentages recommended in your Investor Policy Statement shall not be breached by the occurrence of any events or circumstances outside the control of Wealthsimple including, but not limited to, changes in the price or the value of the investments as a result of market movements, currency movements, lack of availability of investments or arising during a process of transitioning to an alternative investment or as a result of an agreed change in the Investor Policy Statement.
4.13 Nonetheless where for any reason a Target Asset Allocation varies by 5% or more, Wealthsimple shall use its discretion to buy or sell investments with a view to rebalancing the Target Asset Allocation in accordance with the Investor Policy Statement. At a minimum, Wealthsimple will rebalance your portfolio annually.
4.14 An investment’s compliance with any specifications made in the Investor Policy Statement or otherwise communicated to you shall be determined as at the date of purchase of that investment. Any such specification shall not be deemed breached as a result of changes in the value or status (including the credit rating) of an investment following purchase. Wealthsimple shall however assess changing and replacing its selection of an investment as appropriate taking into account any matters that appear to us to be relevant to the ongoing suitability of that investment for your Account.
4.15 If the Target Asset Allocation cannot be achieved for any reason (including, but not limited to, in cases where cost of the shares required to achieve the Target Asset Allocation is greater than your investment amount, we reserve the right to deviate from the recommended Target Asset Allocation until such time as we are able to construe a portfolio in accordance with the Investor Policy Statement.
Powers of Wealthsimple
5.1 Wealthsimple has full authority to:
(a) execute on your behalf such actions as may reasonably be required for Wealthsimple to execute a transaction on your behalf;
(b) communicate orders directly to any or its selected brokers and to the Custodian on your behalf.
(c) select and use such counterparties or trading venues (including, where permitted under applicable law, affiliates of Wealthsimple) to effect transactions on your behalf;
(d) instruct the Custodian to hold the Account for you and to take any necessary custodial, settlement or administrative steps in relation to that Account;
(e) give instructions to the Custodian to transfer cash or investments held by the Custodian on behalf of you in connection with the settlement of transactions;
(f) negotiate, amend, execute or otherwise bring into effect all such relevant agreements in the name of, binding against, and on behalf of you;
(g) to take any other action (including, without limitation, day-to-day decisions) which Wealthsimple reasonably considers to be necessary or desirable to carry out its services under this Investment Terms.
5.2 You will execute and deliver any authorisations and documents as may be reasonably necessary for Wealthsimple to carry out its services under this Investment Terms.
6.1 It is your responsibility to ensure that information or documentation provided by you to Wealthsimple is accurate, complete, up-to-date and not misleading in any respect and that you have notified Wealthsimple of any information which could be relevant to the performance of Wealthsimple’s duties under these Investment Terms.
6.2 You acknowledge that Wealthsimple will be relying on the information or documents provided by you to Wealthsimple. You will promptly advise Wealthsimple of any material change in your financial circumstances that would affect the suitability of the Investor Policy Statement to your personal circumstances. Until such time that Wealthsimple is advised of these changes, you acknowledge that Wealthsimple shall rely on the existing Investor Policy Statement.
6.3 You will be responsible for all tax returns, filings and reports on any transactions undertaken pursuant to this Investment Terms and for the payment of all unpaid capital calls, taxes or other liability arising out of, or in connection with, the investments held in your Account.
6.4 You will provide to Wealthsimple any documents and information that Wealthsimple may require to comply with the requirements of relevant anti-money laundering rules.
6.5 You acknowledge that borrowing money to finance a contribution into your Account involves the risk that the value of your capital investment will go down such that you will have insufficient funds to repay the capital of the loan. Any returns on your capital may be insufficient to meet interest due on the loan. If you borrow money to make a contribution, it is your sole responsibility to repay the loan and pay any interest as required by the loan’s terms, which obligations will likely remain even if the value of the Account declines. We strongly recommend against you borrowing to fund an investment with Wealthsimple.
6.6 When we place certain deals on your behalf, we are required to report information relating to you and your deal to the FCA. We will ask you for the information we require to report on you. You may not be able to place deals with us until we are satisfied you have provided the information required.
6.7 It is your responsibility to ensure you are aware of the current charges that apply to a particular investment before you instruct us to act on your behalf. Details of charges can be found on the investment’s factsheet on Wealthsimple website.
7.1 If you receive execution-only services from us, we may, when we receive specific instructions from you, provide dealing services for (i) shares in UK or foreign companies, (ii) debenture stock, loan stock, bonds, notes, certificates of deposit, commercial paper or other debt instruments, including government, public agency, municipal and corporate shares traded on a stock exchange or organised trading facility (iii) depository receipts or other types of instrument relating to investments falling within (i) or (ii) above; or (iv) unit trusts, open-ended investment companies, mutual funds and similar schemes in the UK or elsewhere. If this is the case, the below terms will apply.
(a) We will not advise you about the merits of any transactions. You will be dealing on an execution- only basis. We do not have to make sure that the transaction, on its own or in terms of your portfolio, is suitable for you.
(b) We are not a trading member of any derivatives exchange, and will use an intermediate broker, who will be governed by the rules and regulations of the relevant exchanges and markets of which we are a member. All deals will either be on an agency basis, or where we act as the principal (in which case, we will match the deals we carry out with equal and opposite deals with our chosen derivatives broker).
(c) You may have to open a separate account with us so you can receive execution-only services from us.
7.2 We cannot advise you about the merits of a particular transaction if we reasonably believe that, when you give us the order for that transaction, you are not expecting our advice and are dealing on an execution-only basis. If the transaction relates to non-complex financial instruments such as shares, bonds and Undertakings for Collective Investment in Transferable Securities (UCITS), we will tell you at the time that we will carry out your order on that basis and we will not have to make sure that the transaction is suitable or appropriate for you. Because of this, you will not benefit from the protections of the relevant FCA Rules which dictate when we need to assess the suitability or appropriateness of the transaction for you.
Instructions and communication
8.1 Instructions may be given through electronic communication, including but not limited to email or via your Wealthsimple online account, or by telephone by calling Wealthsimple Customer Care on 020 3865 2050. All written communications should be directed to Wealthsimple’s registered office at the address set out at the head of these Investment Terms and on our website. Complaints should be notified to Wealthsimple in accordance with Clause 18.
8.2 Wealthsimple shall be entitled to act on any instructions reasonably believed to be from you or an authorised representative of you. It is your responsibility to keep the security details applicable to your Account safe and not share them with any other person. Where you have any reason to suspect that your security details have or might be been compromised, you must contact us immediately.
8.3 You acknowledge that: (a) Wealthsimple may not accept instructions until is able to take satisfy itself that the instructions originated from you or an authorised representative of you; (b) Wealthsimple will not be responsible for any losses or loss of opportunity due to any delays arising from Wealthsimple confirming the validity of instructions or the accuracy of instruction where they are in Wealthsimple’s reasonable opinion unclear.
8.4 Wealthsimple shall not be responsible for the advisability or suitability of transactions made at your instruction where Wealthsimple has indicated that such a transaction is not advisable and/or not suitable for you. Where Wealthsimple provides you with a recommendation to take a step or action in connection with your Account or Investor Policy Statement and you do not do so, Wealthsimple shall not be responsible for the consequences of your failure to do so.
8.5 Wealthsimple, in its sole discretion, may refuse to act on an instruction given by you or an authorised representative of you, where:
(a) it has reason to doubt the validity of the instructions;
(b) the instruction is not capable of being carried out on the Wealthsimple platform;
(c) the instruction is inconsistent with the Investor Policy Statement resulting in the need to reassess and potentially reissue the Investor Policy Statement.
8.6 Wealthsimple will not be obliged to deal with any person to whom you may have disposed or otherwise assigned or transferred to or encumbered any funds, assets or other entitlements held in or under your Account.
8.7 Transaction statements, valuation reports and other summary reports on the Accounts; and reports or investment commentary as Wealthsimple may choose to provide, will be provided electronically to you by email to the address provided by you.
8.8 You may request that Wealthsimple sends you a paper copy of any documents delivered electronically by writing to Wealthsimple at its registered office address (as set out in Clause 8.1). Wealthsimple may charge a reasonable fee for this service.
8.9 All communications between you and Wealthsimple must be in English.
Delegation and use of third parties
9.1 Wealthsimple may appoint any affiliate a or person, delegate or agent of a third party to perform part or all of any of Wealthsimple’s obligations under these Investment Terms, provided that in so doing Wealthsimple’s responsibility to you for these obligations shall not be reduced.
9.2 In performing its obligations to you, Wealthsimple may appoint or use the services of certain third party service providers, including (a) price, market or valuation information or assessment services; and (b) broking, dealing or registrar services. Wealthsimple shall not be responsible or liable to you for the performance by these parties or their services.
Client money and custodian services
10.1 Wealthsimple will arrange for the Custodian to provide a custody service to you and to hold your funds prior to and after investment as client money. Wealthsimple shall in arranging the registration of an Investment through the Custodian exercise all due skill, care and diligence in the selection and appointment of the third party in accordance with FCA Rules but shall not otherwise be responsible for the acts or omissions of the Custodian or for the selection or monitoring of the Custodian.
10.2 Accordingly, the Custodian (and not Wealthsimple) holds cash and investments in your Account on your behalf (including holding contracts or registering documents of title in its name). Wealthsimple shall be entitled to rely on the statements of Custodians when performing its obligations under this Investment Terms.
10.3 The terms on which the Custodian shall provide the custody services to you are set out in Schedule 6.
10.4 Wealthsimple shall have no responsibility for any matters properly relating to your relationship with the Custodian including, without limitation, the safekeeping of your investments, the settlement or clearing of your transactions, delivery of confirmations of transactions to you (save that Wealthsimple shall takes such steps as it reasonably can to ensure that such actions take place).
10.5 You agree that Wealthsimple shall instruct the Custodian on your behalf to: (a) act in accordance with instructions from Wealthsimple pursuant to these Investment Terms; (b) provide Wealthsimple with copies of periodic statements and access to electronic systems; (c) give Wealthsimple timely notice of any voting or other rights with respect to assets forming part of the Account as soon as possible upon becoming aware of any such rights; (d) inform Wealthsimple as soon as practicable of any additions or other credits and withdrawals or other debits to any account containing assets forming part of your Account; (e) pay the amount of any fees, costs and expenses payable under this Investment Terms from the Account in accordance with the payment instructions notified by Wealthsimple to the Custodian; and (f) comply with the directions of Wealthsimple.
Lending, borrowing and underwriting
11.1 Wealthsimple will not (a) commit you to supplementing the assets in your Account by borrowing cash or investments on your behalf and by committing you to a contract which may require you to supplement such assets; or (b) enter into stock lending, stock borrowing, repurchase or reverse repurchase arrangements in relation to assets in your Account.
11.2 Wealthsimple will not, unless specifically agreed in writing with you, enter into transactions in investments whereby you will incur any obligations as an underwriter or sub-underwriter.
Valuations and Reporting
12.1 Statements showing the composition and value of your Account and ongoing transactions will be provided in your secure Account area on our website.
12.2 Wealthsimple shall provide periodic statements and reports to you setting out transactions and the value and composition of the Account on a periodic basis as set out in your Investor Policy Statement.
12.3 Valuation levels used in statements for the assets held in your Account shall reflect Wealthsimple’s good faith effort to ascertain fair market levels for the assets based on pricing and valuation information that Wealthsimple believes to be reliable and which may comprise and be based on valuation information provided by the Custodian. Variations in market conditions will mean that the prices shown in periodic statements and any other reports do not necessarily reflect realisable values.
Dealing and counterparties
13.1 In effecting transactions in your Account, Wealthsimple will deal for you as agent. Wealthsimple may effect transactions with such counterparties and on such trading venues as it considers appropriate in accordance with its Best Execution Policy set out in Schedule 3. You acknowledge that you have read and understood the Best Execution Policy.
13.2 All transactions will be effected in accordance with the rules and regulations of the relevant market or exchange, and that Wealthsimple may take all such steps as may be required or permitted by such rules and regulations and/or by good market practice including, where appropriate, parting with possession of documents of title representing investments in the Account. Wealthsimple shall not act as principal in any transaction with you.
13.3 Wealthsimple may aggregate orders for you with those of other clients on a fair and reasonable basis in accordance with the requirements of the FCA Rules and our order allocation policy. Order aggregation may operate to your disadvantage in relation to a particular order.
14.1 Wealthsimple is authorised to issue proxy voting instructions or to vote on a show of hands at a meeting in relation to any relevant investments held or that were held in your Account, and to execute and bind you in actions, waivers, consents, covenants and indemnifications related to such voting proxies.
14.2 Where Wealthsimple elects to exercise or procure the exercise of such voting rights or other rights, it does so exclusively on the basis of the records and positions held by the Custodian and you acknowledges that Wealthsimple shall be entitled to rely on the information supplied by any other person acting for the or appointed by you and shall not be required to investigate or reconcile any discrepancies between the information held by it and the information held by the Custodian.
14.3 Wealthsimple: (a) may establish guidelines for the exercise of voting of proxies or other rights and may employ the services of a proxy voting service to exercise proxies in accordance with Wealthsimple’s guidelines; (b) may, in its discretion, elect not to exercise or procure the exercise of any voting or other rights and, except as may be explicitly provided by applicable law, Wealthsimple shall not incur any liability to you by reason of any exercise of, or failure to exercise, any such discretion and shall not incur any liability for any failure arising from an act or omission of a person other than Wealthsimple; and (c) may not be able to verify if the Custodian or any proxy voting agent has received and acted upon its voting instructions and may not be able to audit the onward transmission of those instructions to any party.
Potential conflicts of interest and disclosures
15.1 Wealthsimple and its affiliates (together, the “Group”) provide a number of services to a range of clients and there may be times when there is a conflict between the Group’s interests and the duty owed to a client, or a conflict between the differing interests of two or more clients to whom in each case the Group owes a duty. Wealthsimple and any Affiliate may effect transactions in which Wealthsimple, any Affiliate, another client of Wealthsimple or of an Affiliate has, directly or indirectly, a material interest or a relationship of any description with another party, which involves or may involve a potential conflict with Wealthsimple’s duty to you.
15.2 Wealthsimple is required to have in place arrangements with a view to taking all reasonable steps to prevent such conflicts of interest constituting or giving rise to a material risk of damage to the interests of its clients. Wealthsimple will ensure that such transactions are effected on terms which are not materially less favourable to you than if the conflict or potential conflict had not existed. Wealthsimple has a Conflicts of Interest Policy that sets out the types of actual or potential conflicts of interest which affect our business and includes details of how these are managed. Wealthsimple’s Conflicts of Interest Policy, which includes any conflicts Wealthsimple is unable to manage effectively, is available on our webpage: www.wealthsimple.com and an introduction to Wealthsimple’s regulatory obligations in respect of conflicts of interest is set out in Schedule 3.
Fees and Charges
16.1 Fees payable for the services provided to you by Wealthsimple are set out in Schedule 4.
16.2 Any sums due to Wealthsimple or to any other person in respect of fees or otherwise pursuant to these investment Terms (including any applicable VAT) may be withdrawn from the Account and you authorise the Custodian to make payment of fees to Wealthsimple.
16.3 Wealthsimple may amend Schedule 4, in its sole discretion, with 60 days prior written notice to you.
17.1 You remain responsible for the management of your affairs for tax and accounting purposes. Wealthsimple shall not provide you with tax advice or accounting advice or services. Wealthsimple shall have no responsibility to take into account your tax status in providing the services under these Investment Terms.
17.2 You will promptly provide to Wealthsimple all information or documents that are requested by any tax authority of Wealthsimple in respect of you.
18.1 Wealthsimple gives no assurance or guarantee that the value of investments in your Account will not go down or that the investment held in your Account will generate either profits or income, or that any investment or savings goals you may have (even where you have notified us of them) will be achieved.
18.2 Your objectives, as stated in your Investor Policy Statement, are to be considered only as goals, and while Wealthsimple will invest only in investments which, in its judgment, are suitable for in accordance with the Investor Policy Statement considering (among other things) your objectives, Wealthsimple does not guarantee the results of any investment and will not be responsible in the event that some or all of such objectives are not realised.
18.3 Wealthsimple shall not be liable for any error of judgement or any loss suffered by you in connection with the services it provides to you under these Investment Terms (and in particular, but without limitation, Wealthsimple shall not be liable for any loss which may be sustained in the purchase, holding or sale of any investments in accordance with those services) unless such loss arises from negligence, wilful default, dishonesty or fraud by it or any of its employees. Wealthsimple shall not be liable for any other losses suffered by you (which shall include loss of profits, income or capital, costs, expenses, claims or damages) including losses arising from:
(a) negligence, wilful default, fraud or insolvency of any other person;
(b) Wealthsimple carrying out or relying on instructions or on any information provided or made available to Wealthsimple by you, the Custodian, any appointed representative or agent of yours or any person appointed by Wealthsimple under Clause 8.1;
(c) market conditions or changes in market conditions; or,
(d) any delayed receipt, non-receipt, loss or corruption of any information contained in email or for any breach of confidentiality resulting from email communication or any consequential loss arising from either of the foregoing.
18.4 Wealthsimple shall not be liable for any consequential, special, indirect or speculative loss or damage, or loss of profits, loss of opportunity, goodwill or reputation suffered by you or any other person.
18.5 In particular, but without limitation, Wealthsimple shall not be liable for any default of any counterparty, bank, sub-custodian, or other entity which holds money, investments or other documents of title on behalf of you or with or through whom transactions are conducted for you. Wealthsimple shall not be liable to you for any losses incurred by you as a result of the acts or omissions of the Custodian, save to the extent any such losses are caused by Wealthsimple’s negligence, wilful default or dishonesty in complying with clause 9.1.
Complaints and Compensation Scheme
19.1 Wealthsimple has an established complaints procedure which conforms to the FCA rules for the proper handling of complaints. A copy of Wealthsimple’s current complaints handling procedure is available on request or from Wealthsimple’s website www.wealthsimple.com and will otherwise be provided in accordance with FCA rules. All complaints should in the first instance be communicated to Wealthsimple in accordance with the instructions set out on the Wealthsimple website.
19.2 If you are not satisfied with our decision, or we do not provide a response within 8 weeks from the date of your complaint, you may refer it directly to the Financial Ombudsman Service, which offers a free and independent review service. You should refer any complaint within 6 months of the date of our response. You can contact the Financial Ombudsman Service at Exchange Tower, London E14 9SR (telephone: 0845 080 1800). The FOS is an independent adjudicator set up under FSMA to resolve disputes between customers and businesses that provide financial services. This service is free to consumers. Further information about the FOS may be found at www.financial-ombudsman.org.uk.
19.3 Wealthsimple confirms that it is a participant in the Financial Services Compensation Scheme (“FSCS”). Subject to your “client categorisation”, the circumstances of the claim and the nature of the investment service, you may be entitled to compensation from the FSCS if Wealthsimple is unable to meet its liabilities to you. Most types of investment business are covered in full for the first £50,000 of any eligible claim. Further information about the compensation arrangements is available from the FSCS at www.fscs.org.uk.
19.4 Please note that the FSCS only covers circumstances where Wealthsimple has a specific liability to you that it is unable to meet. It does not otherwise cover a loss in your Account or a failure of an underlying investment held in your Account.
Termination & Account Suspension
20.1 You may close your Account (and so terminate these Investment Terms) and redeem your invested funds at any time by instructing us to do so through the functions on the Wealthsimple website.
20.2 Wealthsimple may terminate these Investment Terms and close your Account on 30 days’ written notice to you, by providing you with written notice which may be communicated by electronic mail.
20.3 These Investment Terms may be terminated immediately on written notice by either of us, which may be communicated by electronic mail, if the other commits a material breach of the Investment Terms and if capable of remedy shall not have remedied the same within 30 days after service of notice requiring it to be remedied.
20.4 Wealthsimple may suspend access to your Account without notice to you where:
(a) we have reason to suspect fraud or that the security of the Account has otherwise been breached;
(b) we have reason to suspect that the Account is being used in a way that is contrary to financial services and markets regulations, for market abuse, or for the furtherance of a financial crime including money laundering;
(c) you fail to provide us with information that in our reasonable opinion we need to satisfy our obligations under rules and regulations, whether relating to the prevention of financial crime or otherwise;
(d) we have reason to suspect that the Account is being used in a way that is contrary to sanctions related rules or regulations.
20.5 To the extent that we are permitted to do so by law and regulation, we will contact you on the suspension of your Account promptly and seek to satisfactorily resolve the issue and will remove the suspension when we do so. We may be prohibited by law from contacting you or discussing details of any concerns with you.
Consequences of Termination
21.1 All outstanding transactions at the time of Account closure will be settled and the investments in your Account sold, with the funds and proceeds in your Account remitted to your designated current account.
21.2 Any termination shall be without prejudice to the rights and liabilities of either party in respect of transactions already initiated or to services already provided.
Enurement and Estate
In the event of your death, disability or physical or mental incompetence, there will be no automatic termination or change to these Investment Terms. Your respective successors, executor, administrators, or guardians or controllers acting on your behalf, should contact us to determine the appropriate procedure for the ongoing administration or as appropriate closure of your Account.
23.1 Both Wealthsimple and you will at all times keep confidential information acquired in consequence of these Investment Terms, except for information which they are bound to disclose under compulsion of law, or by request of regulatory agencies or to their professional advisers.
23.2 Wealthsimple is not obliged either to disclose to you, or, in taking any action in connection with the arrangement of the Account, to take into consideration information: (a) where the disclosure of it to you would be a breach of duty or confidence to any other relevant person; or (b) which comes to the notice of an employee, officer or agent of Wealthsimple but does not come to the actual notice of the individual managing the Account or taking the relevant action.
24.1 Wealthsimple may collect, use and store the personal information which you provide from time to time, in accordance with the Data Protection Act 1998 (“Personal Information”). Personal information may include information provided for the purpose of compliance with anti-money laundering regulations and information deriving from transactions that Wealthsimple carries out on your behalf.
24.3 In particular Wealthsimple may use the Personal Information that it collects: (a) to process and implement the Investor Policy Statement and open your Account and enable related trading arrangements; (b) to supply the services; (c) to meet Wealthsimple’s obligations under FCA rules and other applicable law; (d) for client service, analysis and market research purposes; (e) to undertake credit and reference checks and/or to recover a debt or for the purposes of legal proceedings; and/or (f) for general account administration purposes.
24.4 The Client agrees that Wealthsimple may share your Personal Information in the following circumstances: (a) where Wealthsimple uses your Personal Information to assess your eligibility for the services and to verify your identity; (b) Wealthsimple may share Personal Information with its Affiliates and with third parties who may administer and operate the Account from time to time. Wealthsimple will always take appropriate measures and meet its legal obligations to ensure that any Personal Information transferred to such third parties is kept securely; (c) on an assignment of the obligation and rights under these Investment Terms, or if Wealthsimple restructures its business or the whole or any part of its business is sold then Wealthsimple may transfer your information to the relevant third party; and (d) Wealthsimple may share your Personal Information with United Kingdom and overseas law enforcement agencies or regulatory authorities and other relevant bodies for crime prevention purposes.
24.5 Wealthsimple will retain copy records for a period stipulated by us in accordance with FCA rules and other applicable law from the date of termination of your Investment Terms. Wealthsimple may scan and retain all hard copy documentation including Personal Information within our data storage system indefinitely. Retained data may be archived off-site and can usually be retrieved within three working days. Wealthsimple may seek to recover reasonable expenses for retrieval of any data after the termination date.
In the event of any failure or delay in performance of Wealthsimple’s obligations under these Investment Terms resulting from acts or circumstances not reasonably within Wealthsimple’s control, including, but not limited to acts or regulations of any governmental bodies or authorities or securities exchanges, a custodian refusing to act on Wealthsimple’s instructions or the breakdown, failure or malfunction of any telecommunications or computer service, except for Wealthsimple’s own systems. Wealthsimple shall have no liability for any loss or change in the value of the assets in the Account or any opportunity lost incurred as a result of above failure or delay.
26.1 Where two or more persons enter into these Investment Terms as joint holders (otherwise than joint trustees), the liability and obligations of each joint holder pursuant to these Investment Terms shall be joint and several: any one joint holder alone is thereby liable in full for any sums owing in the joint account.
26.2 Where joint holders enter into these Investment Terms they agree that it is their express intention to create an account as joint tenants with the effect that on the death of either or any joint holder, the entire interest in the Account shall be vested in the surviving joint holder(s) on the same terms as set out in these Investment Terms.
Amendments and Assignment
27.1 Wealthsimple may amend this Investment Terms on 60 days’ written notice of the changes to you, which may be given my electronic mail. If you do not close your Account prior to the date on which you are notified that the changes will come into effect, you will be deemed to have agreed to the changes and they shall apply to your Account from the point.
27.2 The Investment Terms shall not be assignable by you without the express written consent of Wealthsimple.
27.3 Wealthsimple may on 30 day’s prior written notice (which may be via email to the email address provided to Wealthsimple by you), assign its rights and/or obligations under these Investment Terms to a third party selected by Wealthsimple, including by way of merger, consolidation or the acquisition of all or substantially all of Wealthsimple’s business and assets relating to the Investment Terms, provided that; (i) doing so shall not adversely affect your rights or obligations under this Investment Terms; and (ii) the assignee is to Wealthsimple’s reasonable satisfaction able to provide an equivalent level of service and regulatory and commercial assurance.
No failure on the part of any party to exercise, and no delay in exercising, any right or remedy under this Investment Terms will operate as a waiver thereof nor will any single or partial exercise of any right or remedy preclude any other or further exercise thereof or the exercise of any other right or remedy. The rights and remedies provided in this Investment Terms are cumulative and not exclusive of any rights or remedies provided by law.
28.1 In the event any provision of this Investment Terms is adjudicated to be void, illegal, invalid, or unenforceable, the remaining terms and provisions of this Investment Terms shall not be affected, and each of such remaining terms and provisions shall be valid and enforceable to the fullest extent permitted by law.
28.2 A person who is not a party to this Investment Terms has no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term.
28.3 This Investment Terms, the Schedules and any other documents annexed to or incorporated by reference are to be construed as one document constituting the agreement of the parties as to the subject matter of this Investment Terms.
28.4 Subject to Clause 28.3, this Investment Terms constitutes the entire agreement between the parties and supersedes and extinguishes all previous agreements, promises, assurances, warranties, representations and understandings between them, whether written or oral, relating to its subject matter.
28.5 The Client and Wealthsimple agree that neither party will have any remedy in respect of any statement, representation, assurance or warranty (whether made innocently or negligently) that is not set out in the Investment Terms. Each party agrees that it shall have no claim for innocent or negligent misrepresentation or negligent misstatement based on any statement in this Investment Terms.
29.1 This Investment Terms will be governed by and construed in accordance with English law. The Client hereby irrevocably submits for the benefit of Wealthsimple to the non-exclusive jurisdiction of the English Courts to settle any disputes or claims which may arise out of or in connection with this Investment Terms.
SCHEDULE 1 Risk Warnings
The following is a summary of some of the risks of investing. Please note that this list is not exhaustive, and has been provided as an indication of the factors that can affect the value of your investments.
General: The value of your investments can go down as well as up and positive returns of both capital and income are not guaranteed. Past performance is not a reliable guide to future performance.
Equity Risk: Investors in equity securities may be exposed to a high level of risk because the prices of equity securities can rise and fall significantly in a short period of time. This could arise due to the fortunes of the companies that issue them or with general stock market or economic conditions.
Fund Risk: Exchange-traded funds and mutual funds (“Funds”) are securities that closely resemble index funds, but can be bought and sold like common stocks:
most Funds are not based in the UK and so you may not benefit from the UK’s regulatory protection, including compensation from the Financial Services Compensation Scheme. However, in the unlikely event that the Fund provider goes bust, you would still have access to the Fund assets, which are ring-fenced and held by a third party custodian;
a Fund may fail to accurately track the market segment or index that underlies its investment objective, for example because the portfolio is not rebalanced often enough to keep up with changes in the index (possibly due to costs associated with trading), or because the Fund may use sampling methodology rather than replicating the entire portfolio of the index;
the value of the Fund is exposed to the volatility of the market which the Fund tracks. In unfavourable market conditions (eg market correction or economic crisis) where the general level of stock, bond, or commodity prices decline, the value of ETFs will decline accordingly.
a Fund may not be “actively” managed. Such Funds would not necessarily sell a security because the security’s issuer was in financial trouble, unless the security is removed from the applicable index being replicated. Nor will the Fund increase exposure to positions that it anticipates increasing in value. As a result, the performance of a Fund may be lower than the performance of an actively managed fund;
some Funds employ leverage, which can magnify the risk of the underlying market segment or index;
if the Fund does not physically hold the assets but replicates the performance of the index using swaps, futures or options, there is a risk that the counterparty could default which could result in a loss to the value of the Fund;
the market price of a Fund units may trade at a discount to its net asset value;
an active trading market for an Fund’s units may not develop or be maintained; and
there is no assurance that the requirements of the exchange necessary to maintain the listing of a Fund will continue to be met or remain unchanged.
Short Selling Risk: Short selling strategies can provide an investor with an opportunity to manage volatility and enhance performance in declining or volatile markets. Short selling securities involves risk because there is no assurance that securities will sufficiently decline in value during the period of the short sale to offset the interest paid by the investor and make a profit for the investor. Securities sold short may instead increase in value. The investor may also experience difficulties repurchasing and returning the borrowed securities. The borrowing agent from whom the investor has borrowed securities may go bankrupt and the investor may lose the collateral it has deposited with the borrowing agent.
Credit Risk: A fixed income security, like a bond, is essentially a promise to pay interest and repay a specified amount at a later time. The probability that the issuer of the fixed income security will fail to honour that promise is called credit risk. Credit rating agencies give investors an idea of how much of a credit risk an issuer represents. If a company or government has a high credit rating, the credit risk tends to be low. A lower credit rating means more credit risk.
Interest Rate Risk: A change in general interest rates is one of the biggest factors affecting fixed- income securities. A bond for example, pays interest based on the level of interest rates prevailing when the bond is issued. Generally, if interest rates fall, the values of the bond rises. This is because the interest rate on the existing bond will be higher than the rate on newer bonds. On the other hand, when general interest rates rise, the price of existing bonds is expected to drop because they pay less than newer bonds.
Inflation Risk: This is the risk of decline in the purchasing power of your savings due to a general rise in prices.
Foreign Currency Risk: Investing in securities that are priced in foreign currencies involves foreign currency risk. Securities that are priced in foreign currencies can lose value when the Pound rises against the foreign currency. As well, foreign governments may impose currency exchange restrictions, which could limit the ability to buy and sell certain foreign investments and could reduce the value of the foreign securities that are held by investors.
Foreign Market Risk: Foreign investments involve additional risks because financial markets outside of the United Kingdom and the European Economic Area may be less liquid and companies may be less regulated and have lower standards of accounting and financial reporting. In some countries, an established stock market and legal system that adequately protects the rights of investors may be lacking. Foreign investments can also be affected by social, political, or economic instability. Foreign governments may impose investment restrictions.
Liquidity Risk: Liquidity refers to the speed and ease with which an asset can be sold and converted into cash. Most securities can be sold easily and at a fair price. In highly volatile markets, certain securities may become less liquid, which means they cannot be sold as quickly or easily. Some securities may be illiquid because of legal restrictions, the nature of the investment, or certain other features such as guarantees or a lack of buyers interested in the particular security or market. Difficulty in selling securities may result in a loss or reduced return for a Client.
Borrowing Risk: The use of leverage may not be suitable for all investors. Using borrowed money to finance the purchase of securities involves greater risk than using cash resources only. If an investor borrows money to purchase securities, the investor’s responsibility to repay the loan and pay interest as required by the terms of the loan remains the same even if the value of the securities purchased declines.
Derivatives Risk: A derivative is a type of investment whose value is derived from the performance of other investments or from the movement of interest rates, exchange rates or market indices. The Portfolio Manager will only recommend derivatives as permitted by securities regulations. The Portfolio Manager may recommend derivatives or investment funds that hold derivatives in their portfolio to help offset losses that other investments held by a portfolio might suffer because of changes in stock prices, commodity prices or interest or exchange rates. This is referred to as hedging. Some common risks of hedging with or investing in derivatives are:
there is no guarantee that the derivative will be bought or sold at the right time to make a profit or limit a loss, nor that the other party to the contract will meet its obligations. Additionally, if the other party goes bankrupt, the investor could lose any deposits made or assets pledged in favour of the other party under the contract;
there is no guarantee that a hedging strategy will always work, as the elements that determine the value of a derivative may change in a manner that is contrary to the intent of the hedge;
hedging will not always offset a drop in the value of a security and hedging can prevent the portfolio from making a gain it otherwise may have made; and
the portfolio may not be able to create an effective hedge against an expected change in a market if most other people expect the same change.
SCHEDULE 2 Best Execution Policy
1.1 The FCA’s Conduct of Business Sourcebook (“COBS”) states that firms must obtain for their clients the best price available when executing client orders or passing orders to other persons for execution. Best execution is of paramount importance when Wealthsimple buys or sells securities on its clients’ behalf. This does not just refer to the price paid but a number of other execution factors.
1.2 Wealthsimple will ensure that the selection of brokers and the execution of trades are done with the best interests of clients being the paramount consideration. This will be determined by taking account of the following execution factors: size and nature of the order; likelihood of execution and settlement; speed; price; cost and other considerations relevant to the execution of an order (the “Execution Factors”).
1.3 This Best Execution Policy (the “Policy”) summarises the steps that Wealthsimple takes in relation to the execution of our clients’ orders, and applies to all transactions carried out by Wealthsimple on our clients’ behalf.
Consent to this Best Execution Policy
2.1 You should review the contents of this Policy and ensure that you are happy to be bound by it. When you have given us instructions to deal on your behalf you will be deemed to have given your consent to this Policy.
2.2 Wealthsimple’s commitment to provide you with “best execution” does not mean that Wealthsimple owes you any fiduciary duties over and above the specific regulatory obligations placed on it.
2.3 Wealthsimple will use its experience and judgement in determining the relative importance of the Execution Factors. However, Wealthsimple will generally regard price and cost of execution (together referred to in FCA Rules as the total consideration) as the most important to you. There may be times when other of the Execution Factors will be more appropriate and Wealthsimple will use its judgement to ensure that you receive the best possible result in the circumstances.
2.4 If you give us specific instructions limiting our discretion (e.g. limit price, or a specific market participant that you wish us to deal through), our ability to achieve the best possible result may be limited and by following your instructions it may prevent us from applying this Policy.
3.1 Wealthsimple uses different execution venues to execute client orders (“Execution Venues”). Wealthsimple will use its discretion to determine the most appropriate execution venue for a trade, to ensure that it gives clients access to those execution venues where their order has the greatest opportunity to achieve the best possible result.
3.2 Wealthsimple will only execute trades on an EU regulated markets or multilateral trading facility (“MTF”). To the extent Wealthsimple executes certain of your orders on an exchange that is not an EU regulated market or an MTF, Wealthsimple will first inform you and obtain your specific consent to this.
Order allocation and aggregation
4.1 Wealthsimple has a duty to allocate trades fairly among client accounts managed by Wealthsimple. The overarching principle for Wealthsimple with respect to order allocation is to treat each client as fairly as possible, so that one client is not favoured over another.
4.2 Wealthsimple effects allocations through its proprietary trading platforms. The allocation rules for these systems are as follows:
any deposit or dividend that is received goes towards buying more shares of the most underweight asset class first, then the second and so on and so forth;
whenever a re-balance is triggered, when an asset class drifts by more than 20%, a set of trades will populate to bring the allocations back in line;
at no point is there human intervention that would allow preferential treatment of an individual client; and
anytime there are different fill prices, they are aggregated together and each client receives the average price of all fills.
4.3 Any errors in allocation and aggregation will be promptly corrected by a process of re-allocation so as to not benefit one client over another.
5.1 The FCA Rules require Wealthsimple to maintain records for all of the orders it executes on behalf of its clients.
5.2 Where orders Wealthsimple seeks to execute on behalf of its clients are not fully filled, then the actual allocation will be recorded, including the reason for any deviation from a pro-rata allocation.
5.3 Wealthsimple is required to retain all records relating to every client order, decision to deal, and order it executes on behalf of its clients for a period of at least five years.
Monitoring and review of the Policy and order execution arrangements
6.1 FCA Rules require Wealthsimple to monitor the effectiveness of this Policy and our order execution arrangement generally. Wealthsimple will assess on a regular basis whether the Execution Venues, and the brokers and dealers to whom Wealthsimple transmit orders, allow Wealthsimple to consistently achieve “best execution”.
6.2 Where any deficiencies are identified in the Policy Wealthsimple will make appropriate changes to its order execution arrangements.
6.3 Should any amendments be made to this Policy, Wealthsimple shall notify you in accordance with the terms of this agreement.
If you would like further information on any aspect of this Policy please contact the Compliance Officer.
SCHEDULE 3 Conflicts of Interest
Introduction and Wealthsimple’s regulatory obligations
1.1 A conflict of interest arises when the interests of Wealthsimple (including its managers, employees or and appointed representatives) or another client conflict with the interests of its clients to whom Wealthsimple provides its portfolio management or advisory services.
1.2 Principle 8 of the FCA’s Handbook requires Wealthsimple to manage conflicts of interest fairly, both between itself and its customers and between a customer and another client. Wealthsimple is also subject to more specific requirements in SYSC 10 of the FCA’s Handbook. These requirements include:
(a) Identification of conflicts: Wealthsimple is required to take all reasonable steps to identify conflicts of interest between itself and its clients, and between a client and another customer, whose existence may entail a material risk of damage to the interest of that customer;
(b) Managing conflicts: Wealthsimple is required to maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent a conflict of interest from constituting or giving rise to a material risk of damage to the interest of its clients;
(c) Record of conflicts: Wealthsimple is required to keep and maintain a record of the kinds of service or activity carried out by the firm in which a conflict of interest that entails a material risk of damage to the interest of its clients has arisen or may arise;
(d) Disclosure of conflicts: Before providing services to a client, Wealthsimple is required to disclose to clients on a durable medium the nature and source of any conflict of interest that risks damage to the interest of the client and which are not avoided by Wealthsimple’s organisational and administrative arrangements;
(e) Conflicts Policy: Wealthsimple is required to establish, implement and maintain a conflict of interest policy.
SCHEDULE 4 Fees
The investment management fee (the “Fee”) shall be applied to each Account separately according to the following schedule*:
A. Assets managed on a Discretionary basis
Up to GBP 100,000: 0.7%
Above GBP 100,000: 0.5%
B. Assets held on an Execution-only basis
Up to GBP 100,000: 0.5%
Above GBP 100,000: 0.35%
(a) The Fee will be calculated and payable in the currency of the Account and includes VAT (currently at 20%).
(b) The Fee includes custody and administration charges as well as trading charges due to the Custodian, i.e. are overall fees to be paid for the services of Wealthsimple and the Custodian.
(c) The Fee is expressed as an annual rate.
(d) The Fee shall be the amount equal to the aggregate of 1/365th of the applicable percentage (as set out in the chart above) (except in any leap year, during which the amount shall equal 1/366th of the applicable percentage) multiplied by the market value of the Account as of the close of trading on the London Stock Exchange (“LSE”) (herein, “close of markets”) each day, or as of the close of markets on the immediately preceding trading day for any day when the LSE is closed.
(e) The Fee shall accrue and shall become due and payable on the last day of every calendar month and shall be deducted from the Account.
(f) If you close the Account, withdraw the entire balance of the Account, or if you or Wealthsimple terminate your Investment Terms, the accrued Fee shall be due and payable immediately.
(g) Wealthsimple reserves the right, in its sole discretion, to reduce or waive the Fee for any period of time.
(h) Wealthsimple may charge additional fees for provision of statements, administrative functions and other sundry matters with the prior agreement of you and such fees shall be deducted from your Account.
The Client acknowledges that the Portfolio Manager may waive the Fee for other clients without notice to you and without waiving the Fee for you.
SCHEDULE 5 Terms of Custody (“Custody Terms”)
1.1 Wealthsimple UK Ltd. (the “Investment Services Provider”) provides investment services to you, its customers (each a “Customer”); and has appointed SEI Investments (Europe) Ltd (“SEI”, the “Custodian”) to provide dealing and custody services for this purpose, on the basis that SEI will be directly responsible to each Customer for the custody services.
1.2 These Terms set out the basis on which SEI agrees to provide custody services to the Customers, and constitute a separate legal agreement between SEI and each Customer.
1.3 The table at the end of these Terms sets out various expressions used with special meanings in these Terms and the meaning attributable to each of them. These expressions are used with capital letters in these Terms.
2.1 These Terms take effect between the Custodian and a particular Customer from the point when the Custodian first receives Client Assets and/or Client Money to hold on behalf of that Customer.
2.2 These Terms will continue to apply in relation to a particular Customer until terminated in accordance with paragraph 17.
2.3 The Custodian will act on instructions from the Investment Services Provider, as agent for the Customer, in providing its services under these Terms.
2.4 Where the consent of the Customer is required in order to provide certain services under these Terms, the Investment Services Provider will explain the position to the Customer and obtain the necessary consent. The Customer will have provided the Investment Services Provider with such consent when signing terms of business with the Investment Services Provider.
Responsibilities of the Custodian
3.1 The Custodian will provide the following services (the “Services”):
(a) holding all Client Assets or arranging for them to be held in safe custody;
(b) collecting all distributions and other entitlements arising from Cient Assets and accounting for them to the Customer;
(c) settling transactions to acquire or dispose of Client Assets on the instructions of the Investment Services Provider and using funds provided for the purpose by the Customer;
(d) informing the Customer or the Investment Services Provider of corporate actions and other events affecting Client Assets;
(e) holding money on behalf of the Customer where required for the purpose of providing the above Services; and
(f) transferring all Client Assets and Client Money held on behalf of the Customer to the Customer or as the Customer or the Investment Service Provider may direct on termination of the appointment pursuant to these Terms.
3.2 The Services will not include advising on or managing investments or executing transactions, which will be the responsibility of the Investment Service Provider.
3.3 The Custodian will use reasonable care and due diligence in providing the Services.
3.4 The Custodian will comply with the FCA Rules that apply to it as holder of Client Assets and Client Money. Nothing in these Terms will override its obligations under the FCA Rules.
3.5 The Custodian will settle all transactions undertaken by it subject to the Custodian holding or receiving all necessary documents or funds and will do so on such basis as is good market practice for the type of Securities and market concerned and normally on the basis of “delivery-versus-payment” (“DVP”). In respect of transactions that the Custodian settles for the Customer on a DVP basis through a commercial settlement system the Custodian will use the DVP exemption in the FCA Rules excluding cash and securities from Client Money and Client Asset respectively. In the event that the Custodian is not able to rely on the DVP exemption (for example because settlement has not occurred by the close of business on the third business day following payment or delivery by the Customer), the Custodian will treat cash and Securities held for the Customer in accordance with the FCA Rules. The Custodian’s obligation to account to the Customer for any Securities or the proceeds of sale of any Securities will be conditional upon receipt by the Custodian of the relevant documents or sale proceeds.
Responsibilities of the Customer
4.1 The Customer is responsible for ensuring that all of the Client Assets, at all times when they are held in the custody or under the control of the Custodian, free from any rights in favour of any third party (including but not limited to rights of security granted to a creditor or beneficial interests under a trust), except for:
(a) rights in favour of the Custodian, any third party engaged by the Custodian under these Terms;
(b) rights of beneficiaries under an express trust that are notified to and acknowledged by the Custodian; and
(c) rights in favour of a third party arising in the normal course of a transaction settled by the Custodian pursuant to these Terms.
4.2 The Customer will pay or will reimburse the Custodian for any liability to a third party which the Custodian may suffer or incur as a result of a breach of these Terms by the Customer, except if and to the extent that the relevant expenses or liabilities arise from any negligence or breach of duty or these Terms by the Custodian.
4.3 The Customer shall deliver to the Custodian or the Investment Service Provider any necessary documentation to ensure the timely processing of Securities transactions as the Custodian may reasonably require.
4.4 The payment of cash or release or delivery of Securities shall be made upon receipt of instructions where relevant, and (i) in accordance with the customary or established practices and procedures in the relevant jurisdiction or market or (ii) in the case of a sale or purchase made through a Securities System, in accordance with the rule, regulation and conditions governing the operation of the Securities System.
4.5 The Custodian and its sub-custodians shall not be obliged to accept Securities under these Terms which in the opinion of the Custodian are not in good deliverable form. The Custodian is not responsible for checking or otherwise responsible for the title or entitlement to, validity or genuineness, including good deliverable form, of any property or evidence of title to property received by the Custodian under these Terms.
Holding and Registration of Investments
5.1 The Customer authorised the Custodian to arrange for title to Client Assets to be registered or recorded in the name of: (i) the Customer (ii) a nominee company controlled by the Custodian or an affiliated company of the Custodian or a third party with whom financial instruments are deposited; as bare trustee for each Customer or (iii) the Custodian or one or more sub-custodians chosen by it, provided the Custodian or sub-custodian is prevented from registering or recording legal title as set out in (i) and (ii).
5.2 Client Assets may be held in omnibus accounts and be registered collectively in the same name for all customers and therefore the individual entitlements of each Customer may not be identifiable by separate certificates or other physical documents of title. If the Custodian or sub-custodian were to become insolvent, any shortfall in Securities so registered would be shared pro rata among the Custodian’s customers concerned.
5.3 Where instructed to do so, or where the Custodian considers it is in the best interest of the Customer to do so, the Custodian may arrange for a third party to provide custody and/or settlement services in relation to certain Customer Assets. Where the third party is an Affiliate of the Custodian, the Custodian will be responsible for the service provided by the third party to the same extent as if the service had been provided by the Custodian itself.
5.4 Where services are provided by a third party which is not an Affiliate of the Custodian, the Custodian will exercise reasonable care and due diligence in selecting them and monitoring their performance, but does not guarantee proper performance by the third party and will not itself be responsible if the third party fails to meet its obligations. This means that if the third party defaults or becomes insolvent, the Customer may lose some or all of their assets and will not necessarily be entitled to compensation from the Custodian. Including, in circumstances where it is not possible under the relevant national law and the registration under clause 5.1 to identify the Client Assets from the proprietary assets of the third party firm.
5.5 Where the Custodian provides services in respect of Securities which are held by a third party in, or which are subject to the law or market practice of, a country outside the United Kingdom, the settlement, legal and regulatory requirements in the relevant overseas jurisdiction may be different from those in the United Kingdom and there may be different practices for the separate identification of securities.
5.6 The Custodian is covered by the Financial Services Compensation Scheme (FSCS). The Customer may be entitled to compensation from the scheme up to a maximum of £50,000 (or such other value covered from time to time by the FSCSA) for investment claims if the Custodian cannot meet its obligations.
Further information about the compensation arrangements is available from the FSCS directly. Website: www.fscs.co.uk Telephone: 0800 678 1100 / 020 7741 4100 Address: Financial Services Compensation Scheme, PO Box 300, Mitcheldean, GL17 1DY
Right of Lien Sale, Set Off and Unclaimed Assets
6.1 The Customer hereby grants the Custodian a security interest in and a lien on any CustomerClient Asset and Client Money to facilitate the clearing and settlement of transaction and for this purposedebts related to the provision of Services under these Terms. The Customer further agrees to grant a security interest to third parties over Client Assets in order to recover debts where the debts relate to (i) the Customer and (ii) the provision of service by that third party to the Customer.
6.2 The Custodian may divest itself of unclaimed Client Assets in accordance with the requirements as set out in FCA Rules. Under the FCA Rules the Custodian may either (i) liquidate an unclaimed Client Asset it holds, at market value, and pay away the proceeds or (ii) pay away an unclaimed Client Asset it holds, in either case, to a registered charity of its choice provided it has held that Client Asset for at least 12 years; in the 12 years preceding the divestment of that Client Asset it has not received instructions relating to any Client Asset from or on behalf of the Customer concerned; and it has taken reasonable steps to trace the Customer concerned.
7.1 Subject to the following paragraphs, the Custodian will hold Client Money in one or more client bank accounts with one or more deposit takers in accordance with the FCA Rules. The Custodian will pay credit interest to the Customer on sterling balances at the greater of: (i) the Bank of England base rate less 0.40% or (ii) zero. The Customer will not pay any credit interest on balances in any other currency. Customer acknowledges and agrees that where the rate of interest received by the Custodian is more than what is credited to Customer, the Custodian may retain such balance. For the avoidance of doubt, such interest will only be credited on sterling balances.
7.2 The Custodian does not allow Customer cash accounts to be overdrawn, where overdrawn accounts occur the Custodian may at its discretion charge an overdraft rate at the appropriate Central Bank official interest rate.
7.3 In the event of a failure of charge being incurred by the Custodian for holding a cash balance (a negative interest rate) in its client bank accounts, the Custodian reserves the right to pass such charges to the Customer.
7.4 The Custodian may hold Client Money with a third party deposit taker, Customer in an unbreakable time deposit account up to the maximum allowed by the FCA Rules. Each Customer’s cash may be placed on a mix of terms – between instant access and unbreakable term deposit up to 90 days (or the maximum). The mix of terms will be balanced by the Custodian to deliver an appropriate combination of interest, diversification of risk and timely access to cash at the individual Customer level. In the event that the Custodian places too much money on a time deposit it may take longer to return some cash to Customers.
7.5 In the event of an insolvency of a third party deposit taker, any shortfall in Client Money will be pooled with other client money of the deposit taker and then distributed proportionately. Any subsequent shortfall will be covered by the Financial Services Compensation Scheme for bank deposits up to a value of £85,000 (or other such value covered from time to time by the FSCS), depending on the individual circumstances for each Customer (see FSCS contact information in clause 5.6 above).
7.6 The Custodian will hold qualifying money market funds the Customer or the Investment Service Provider elects to purchase as safe custody assets and not as Client Money. As a result, the qualifying money market funds will not be held in accordance with the client money rules but instead in accordance with the custody rules as set out by the FCA.
7.7 The Custodian may allow another person such as an exchange, a clearing house or an intermediate broker, to hold or control Client Money, but only where this is required for the purpose of a transaction for the Customer through or with that person or to meet an obligation of the Customer to provide collateral for a transaction. In the event of a shortfall following any default of such person, the Customer may not receive your full entitlement and may share in that shortfall pro rata. The Client will inform the Customer and provide further details if this is to occur.
7.8 The Custodian may arrange for a Client Money to be held in a bank outside the United Kingdom. Where it does so, the rights of the Customer in relation to that money will differ from those applicable under the United Kingdom regulatory regime.
7.9 Where the Customer has instructed the Custodian to pay charges to the Investment Service Provider on the Customer’s behalf, the Custodian may use Client Money for this purpose.
7.10 To the extent that an amount is due from the Customer to the Custodian or a third party provider under clause 6 in connection with these Terms, the Custodian may use Client Money or Client Assets to pay that amount.
7.11 In the event that the Custodian determines that there is a legal and/or regulatory requirement for it to rebate to a Customer any commission received, then the rebate will become due and payable to the Customer at such time as is determined by the Custodian in accordance with its internal procedures.
7.12 Where the Custodian transfers any part of the custody services it provides to a Customer to another appropriately authorised institution chosen by the Custodian, the Customer authorises the Custodian to transfer any Client Money held for that Customer to that appropriately authorised institution provided the transferee agrees to hold the Client Money in accordance with the FCA Rules.
7.13 The Custodian may cease to treat any unclaimed balance allocated to an individual Customer as Client Money in accordance with the requirements as set out in FCA Rules. The Custodian may pay away to a registered charity of its choice a Client Money balance which is allocated to a Customer and if it does so the released balance will cease to be Client Money, provided the Custodian has held the balance concerned for at least six years following the last movement on the Customer’s account (disregarding any payment or receipt of interest charged or similar items) and the Custodian has taken reasonable steps to trace the Customer concerned to return the balance.
8.1 The Custodian may make available a provisional credit of settlement, maturity or redemption cash proceeds, or income and dividends on a contractual settlement basis or predetermined income basis, as the case may be (“Contractual Settlement”), in markets and for Securities deemed appropriate for that practice by the Custodian and agreed with the Customer.
8.2 Where Contractual Settlement is extended on a sale, redemption or maturity event, the corresponding Securities shall be debited from the securities account and held by the Custodian or sub-custodian pending settlement. Securities purchased will not be available for use until actual settlement.
8.3 The Custodian reserves the right to reverse any such credit at any time before actual receipt of the item associated with the credit when the Custodian determines in its reasonable judgement that actual receipt may not be received for that item. Where it is possible the Custodian will give advance notice of the reversal (but it shall not be obliged to do so where the Custodian determines it need to act sooner or where the Custodians ability to recover may be compromised). Where there is any requirement of reversal of previously advanced cash the Custodian may charge the appropriate Client Money account for the expense of providing funds associated with the advance pursuant to clause 7.2 and 7.3 of these Terms.
8.4 Any provisional credits provided under these Terms shall be considered as cash advance for the purposes of clause 6 of these Terms to the extent they cannot be reversed in accordance the preceding clauses.
Conflicts of Interest
9.1 The Custodian has adopted a formal policy with a view to ensuring that in any situation in which its interests conflict with those of Customers and /or the Investment Service Provider, all parties receive fair treatment. A summary of that policy is set out in Appendix 1.
10.1 The Customer will not have to pay any fees to the Custodian for the provision of the Services provided the Customer continues to use the Services via the Investment Services Provider. The Custodian will receive fees and be reimbursed for expenses as agreed between the Custodian and the Investment Service Provider.
11.1 The Custodian will provide each Client with periodic statements of their Client Assets and Client Money held by SEI at least once per quarter in accordance with the FCA Rules.
11.2 To the extent that the Custodian provides values of, and pricing information in relation to Securities, the Custodian may use generally recognised pricing services including brokers, dealer, market makers and the Investment Service Provider. The Custodian shall not be liable for, and makes no assurance or warranties in relation to, the accuracy or completeness of such value or information.
Limits on Liability
12.1 Neither the Custodian nor the Customer will be liable to the other under or in connection with these Terms for any
(a) loss of profit;
(b) loss of revenue, loss of production or loss of business (in each case whether direct, indirect or losses that are not directly associated);
(c) loss of goodwill, loss of reputation or loss of opportunity; or
(d) loss of anticipated savings or loss of margin.
12.2 The Custodian and the Customer will only be liable for costs which are incurred as a direct consequence of the event which led to the other making a claim under these Terms.
12.3 The Custodian will not be liable to the Customer for any inaccurate, misleading or unfair information issued or produced by fund managers under these Terms.
12.4 Nothing in these Terms will exclude or limit a party’s liability that:
(a) the Custodian or the Customer may incur to the other in respect of death, personal injury, fraud, under the FCA rules or any other kind of liability that by law cannot be excluded;
(b) or in the case of any failure by the Custodian or an Affiliate to account for assets or cash to the person entitled to them under these Terms or otherwise to comply with its obligations under the FCA Rules, unless any such failure by the Custodian or an Affiliate is the result of the acts or omissions of Customer or the Investment Service Provider.
12.5 Each of the Custodian and the Customer will take reasonable steps to mitigate any loss for which the other may be liable under these Terms.
12.6 Neither the Custodian nor the Customer will be liable under or in connection with these Terms for any breach of these Terms resulting from any reason or circumstances beyond the reasonable control of the Custodian or, as the case may be, the Customer.
13.1 If the Customer has any questions or comments in relation to the Services, these should be raised in the first instance with the Investment Service Provider. If the Customer wishes to make a formal complaint about the Services this should be sent to the Client marked for the attention of the Investment Service Provider or directly sent to SEI at the following address: The Compliance Officer SEI Investments (Europe) Ltd P.O. Box 73147 London EC2P 2PZ
13.2 If SEI do not deal with the Customer’s complaint about the Services to his/her satisfaction, the Customer may be able to refer the matter to the Financial Ombudsman Service at: The Financial Ombudsman Service Exchange Tower London E14 9SR Telephone: 0800 023 4567 Email: email@example.com Website: www.financial-ombudsman.org.uk
13.3 Subject to the above, any dispute or difference arising out of or in connection with these Terms or the provision of the Services will be subject to the jurisdiction of the English courts.
14.1 SEI is authorised and regulated by the Financial Conduct Authority (“FCA”) and entered on the FCA’s register with number 191713. The FCA’s address is: 25 The North Colonnade Canary Wharf London E14 5HS
14.2 SEI will treat each Customer as a retail client under the FCA Rules, giving them the greatest level of protection under the FCA Rules.
14.3 SEI’s contact details are: SEI Investments (Europe) Ltd P.O. Box 73147 London EC2P 2PZ
Law and Language
15.1 These Terms are governed by and shall be construed in accordance with the laws of England.
15.2 All communications from SEI to Customer under these Terms will be in English.
16.1 The Custodian may change these Terms by giving the Customer at least 60 days’ written notice, unless shorter notice is required in order to comply with the FCA Rules. This would be for reasons such as:
(a) to take account of changes in legal, tax or regulatory requirements;
(b) to fix any errors, inaccuracies or ambiguities we may discover in the future;
(c) to make these Terms clearer; and/or
(d) to provide for the introduction of new or improved systems, methods of operation, services or facilities.
16.2 If the Customer does not agree with any change that the Custodian proposes to make, the Customer should inform the Custodian by communicating its concerns with the Investment Service Provider.
17.1 The Custodian may terminate these Terms at any time by giving the Customer 60 days’ written notice (subject to applicable law and regulatory requirements). There is no minimum duration of these Terms.
17.2 The Custodian may also terminate these Terms with immediate effect by written notice if required to do so for legal or regulatory reasons or on instructions from the Investment Service Provider.
17.3 On termination, the Investment Service Provider will instruct the Custodian where to transfer the Client Assets and Client Money. If the Investment Service Provider does not do so promptly, or if the Investment Service Provider no longer represents the Customer, then the Customer will on request give the relevant instruction. The Custodian will transfer Client Assets and Client Money in accordance with the relevant instruction or, if it is unable to obtain instructions, it will transfer them to the Customer. These Terms will continue to apply until such transfer of the Client Assets and the Client Money is complete.
17.4 The Customer can withdraw the Client Assets and Client Money from SEI at any time.
Interpretation and Table of Defined Expressions
18.1 In these Terms, each of the expressions defined below has the meaning set opposite it.
“Affiliate” - means any body corporate in the same group (as defined in the Financial Services and Markets Act 2000) as SEI
“Central Bank” - a central bank, reserve bank, or monetary authority managing the relevant currency, money supply, and interest rates.
“Contractual Settlement” - as defined in clause 8.1.
“Customer” - means each individual or legal entity that enters into a Customer Account Application with the Investment Service Provider and whose accounts are serviced by the Investment Service Provider appointing SEI to provide dealing and custody services.
“Customer Account Application” - means the forms used by the Investment Service Provider to provide SEI information in relation to each Customer for the purposes of enabling SEI to open each account
“Client Assets” - means Securities held by SEI on behalf of the Customer from time to time in any form in accordance with these Terms
“Client Money” - means cash in any currency held by SEI on behalf of the Customer from time to time in accordance with these Terms
“FCA” - means the Financial Conduct Authority of the United Kingdom and any its successor to all or part of its functions
“FCA Rules” - means the Handbook of Rules and Guidance of the FCA as amended from time to time “Securities” - means securities, financial instruments and such other similar assets as the Custodian may from time to time accept into custody under these Terms and shall, where appropriate to the context, include certificates evidencing title to Securities.
“Securities System” - means a generally recognised book-entry or other settlement system or clearing house or agency, acting as a securities depository, or transfer agent, the use of which is customary for securities settlement activities in the jurisdiction(s) in which the Custodian carries out its duties under these Terms and through which the Custodian may transfer, settle, clear, deposit, or maintain Securities whether in certificated or uncertificated form and shall include any services provided by any network service provider or carriers or settlement banks used by a Securities System.
Further information about SEI and frequently asked questions about its custody services are available on the SEI website. Website: www.seic.com/enUK/about.htm
18.2 APPENDIX 1 SEI Investments Europe Limited (SIEL) - Summary Conflicts of Interest Policy
SEI Investments Europe Limited (“SIEL”), as a global multi-service firm, is likely to find itself in situations where the interests of one client of SIEL may compete with:
those of another client of SIEL; or
the interests of SIEL (or members of the Group to which SIEL belongs (i.e. the “SEI Group”)); or
the interests of SIEL’s managers, employees, appointed representatives (or where applicable, tied agents) or any person directly or indirectly linked to them by control (“Relevant Persons”).
In accordance with Article 47(1)(h) of Commission Delegated Regulation (EU) 2017/565 (the “MiFID Org Regulation”) and the Financial Conduct Authority (“FCA”)’s Conduct of Business sourcebook (“COBS”) 6.1ZA.2.1 EU 47(1)(h), this document represents a summarised version of SIEL’s Conflicts of Interest policy, which SIEL maintains in accordance with Article 34 of the MiFID Org Regulation, the FCA’s Principles for Businesses – Principle 8 and relevant applicable rules contained in Chapter 10 of the FCA’s Senior Management Arrangements, Systems and Controls sourcebook (“SYSC”).
This summary document sets out SIEL’s approach to identifying and preventing or managing conflicts of interest which may arise during the course of its business activities. Further details of SIEL’s Conflicts of Interest policy can be provided upon request.
What are conflicts of interest?
During the course of investment services and activities and ancillary services carried out by or on behalf of SIEL, there are a number of circumstances which constitute, or may give rise to, or may be perceived to be, a conflict of interest entailing a risk of damage to the interests of one or more clients. The three main categories of potential conflicts of interest include:
Between SIEL (including SEI Group entities) and a client of SIEL: Situations may arise where the interests of SIEL (or the SEI Group) conflict with those of a SIEL client. This includes, for example, any instances where SIEL (or SEI) is likely to make a financial gain, or avoid a financial loss, at the expense of the SIEL client or where it has an interest in an outcome which differs from SIEL’s client’s interest.
Between two or more clients of SIEL: Situations may arise where the interests of a client conflict with those of other clients. This includes, for example, where there is a financial or other incentive to favour the interest of another client or group of clients over the interests of the client, or a situation where confidential information about one client could be provided to another.
Between Relevant Persons and a client of SIEL: Situations may arise where the interests of Relevant Persons conflict with the interests of a client of SIEL. For example, a conflict of interest may arise where Relevant Persons receive from a person, other than the client, an inducement (in the form of monies, goods, or services) in relation to a service provided to the client other than the standard commission or fee for that service.
Identification of conflicts of interest
SIEL has appropriate internal controls (including a periodic review of business activities and specific transactions) to identify and record circumstances which constitute, or may give rise to, or may be perceived to be, a conflict of interest and whose existence may damage the interests of a client. These arise or may arise in the course of SIEL providing certain investment and ancillary services or a combination thereof and include those caused by the receipt of inducements from third parties or by SIEL’s own remuneration and other incentive structures. SIEL has an ongoing management reporting process for potential and existing conflicts of interest.
Records of conflicts of interest
As required, SIEL keeps and regularly updates its record of the types of services or activities carried out by or on behalf of SIEL in which circumstances, which constitute, or may give rise to, or may be perceived to be, a conflict of interest and whose existence may damage the interests of one or more clients, have arisen or, in the case of an ongoing service or activity, may arise.
Circumstances in which conflicts of interest may occur
SIEL or a Relevant Person is likely to make a financial gain or avoid a financial loss, at the expense of the client;
SIEL or a Relevant Person has an interest in the outcome of a service provided to the client or of a transaction carried out on behalf of the client, which is distinct from the client’s interest in that outcome;
SIEL or a Relevant Person has a financial or other incentive to favour the interest of another client or group of clients over the interests of the client;
SIEL or a Relevant Person carries on the same business as the client; and
SIEL or a Relevant Person receives or will receive from a person other than the client an inducement in relation to a service provided by SIEL, in the form of monetary or non-monetary benefits or services.
Arrangements to prevent or manage of conflicts of interest
As part of SIEL’s organisational and administrative arrangements, SIEL has specified procedures, which are followed, and measures that have been adopted, to prevent or manage conflicts of interest.
In addition to the existence of relevant governance arrangements, escalation procedures to senior management (including SIEL’s Board, where appropriate), relevant guidance and specific training provided to SIEL employees and appropriate segregation of SIEL employees’ duties and responsibilities, the following are examples of SIEL policies which, among other things, specify measures and controls adopted by SIEL in order to prevent or manage conflicts of interest:
Conflicts of Interest policy (internal guidelines for employees, related to identification, prevention and management of conflicts of interest)
Remuneration policy o Suitability policy o Order Handling & Execution policy
Client Communications policy
Incidents, Breaches and Complaints policies and procedures (including SIEL’s Route Cause Analysis policy)
Personal Account Dealing policy o Inducements (including Gifts & Benefits) policy
Disclosure of conflicts of interest
To the extent that the organisational and administrative arrangements established by SIEL to prevent or manage its conflicts of interest are not sufficient to ensure, with reasonable confidence, that risks of damage to the interests of the client will be prevented, SIEL will disclose this fact to the relevant client(s) together with a specific description of the conflicts of interest that arise in the provision of the relevant investment and/or ancillary services. Such description will explain the general nature and sources of conflicts of interest, as well as the risks to the relevant client(s) that arise as a result of the conflicts of interest and the steps undertaken to mitigate these risks, in sufficient detail to enable that client(s) to take an informed decision with respect to the investment or ancillary service in the context of which the conflicts of interest arise.
Acting as your agent, Wealthsimple UK Ltd. (the “Manager”, “we”, “us”) will appoint SEI Investments (Europe) Ltd. (“SEI”) as custodian of the assets in respect of which we provide you with investment services. We have negotiated an ‘umbrella’ contract setting out the full terms on which SEI will provide a custody service to you and our other clients (the “Custody Agreement”).
Who will instruct SEI what to do with your assets and cash?
Unless otherwise agreed in writing, SEI will only act upon instructions received directly from us - acting in its capacity as your agent – in respect of holdings held by SEI on your behalf. All instructions should be routed via Wealthsimple and SEI will assume that we have your authority to give any such instructions. However, SEI will treat you as its client for regulatory purposes, and has classified you as a retail client in accordance with the rules and regulations of the FCA (“FCA Rules”). SEI is entitled to communicate regulatory disclosures and risk warnings to you, and obtain regulatory consents from you, through Wealthsimple. In doing so SEI understands that you have authorised us to act in this way for you.
How will your investments be held, and with whom?
As your custodian, SEI is under an obligation to hold your investments under safe custody. SEI discharges this duty to you by maintaining a separate record of your investments on their books and records, easily identifiable in your name. Where local practice or regulation dictates or for operational efficiency, SEI may open accounts at sub-custodian banks or other agents in order to facilitate the settlement and safe custody of your investments. In such circumstances, assets will generally be held by a sub-custodian in a pooled account, or (where local practice dictates) in a pooled account with a clearing system or securities depository (as applicable). Your investments will be held in safe custody by SEI in one or more accounts with the relevant subcustodian(s) appointed by SEI, along with the assets of other clients of SEI. The accounts will be opened with a title that clearly indicates that the investments held in the accounts are client assets and do not belong to SEI. Your interest in each pooled account will be determined from the client safe custody account records which SEI maintains on its books and records. Each sub-custodian will have a single net obligation to SEI in respect of investments held collectively for clients in each account.
How will your cash be held, and with whom?
SEI is not a deposit taking organisation, but it will control cash placed with it for the purposes of investment (or deriving from your investments) on trust as client money in accordance with the FCA Rules. SEI will maintain a separate record of your cash on its books and records, easily identifiable in your name.
SEI discharges its duty to safeguard your cash by opening bank accounts in the name of SEI with banks or other financial institutions which are permitted by the FCA Rules, and designating such accounts as client money bank accounts. SEI will pool the client money it holds for you and other clients in these client bank accounts. All client money held in a client bank account will be held by the bank or other permitted entity as banker. Such entities will not be required to treat the cash as client money in accordance with the FCA Rules – it is SEI itself as your authorised and regulated custodian which has the ultimate client money and assets obligations to you under the FCA Rules.
In respect of currencies for which SEI does not generally offer a safe custody service, SEI may open a client bank account at a financial institution of a type permitted by the FCA Rules operating within the country of such currency. These accounts are likely to be held on the above basis in that SEI will take steps to ensure the money is held in an account identified separately to any account used to hold money belonging to SEI. Where your money is held in an account that is subject to the law of a jurisdiction other than that of the United Kingdom, your rights relating to that money may differ and your money may not be as well protected.
Will your cash be held in a qualifying money market fund?
It is possible for you to agree with us that your client money should be deposited in a qualifying money market fund. If SEI is so instructed, the money will not be held in accordance with the FCA client money rules but rather in accordance with the FCA custody rules. You are entitled to oppose a proposal that your cash should be held in a qualifying money market fund.
Can my cash be transferred to a third party?
Other than (i) on your instructions relayed via Wealthsimple or (ii) in order to place funds in a client bank account with a bank or other financial institution permitted by the FCA Rules, SEI will not pass your money to a third party other than in accordance with the FCA Rules. SEI may allow another person (such as an exchange, clearing house or intermediate broker) to hold or control your money, but only if SEI transfers such money:
(a) for the purpose of a transaction for you through or with that person; or (b) to meet an obligation of yours to provide collateral for a transaction (for example, an initial margin requirement for a contingent liability investment).
Will I earn interest on my cash?
SEI currently does not pay interest on investment portfolio related cash. Details of any interest earned on your cash will be set out in your Custody Agreement. If SEI incurs negative interest for holding your cash in a particular currency then this charge will be passed on to you. SEI may not pay interest below £1 per month.
Will my investments ever be registered in another name?
SEI will always maintain a record of your investments in your own name on the SEI books and records as evidence that you own such investments. Where SEI uses a sub-custodian, the pooled accounts will be separately identified as client custody accounts to indicate that the investments held in the account are client assets and do not belong to SEI.
Are there any risks if my investments are registered in another name?
Where your investments are registered or recorded in the name of a sub-custodian/ agent/ depositary, they may not be segregated from the investments of that third party. In the event of either entity’s insolvency, you should be aware that your assets may not be as well protected from claims made on behalf of the general creditors of the custodian or third party.
What are the risks of the “pooled accounts” described above in the event of the insolvency of SEI or a third party?
As described above, while SEI will maintain a record of your individual entitlements, your investments can be held in one or more pooled accounts with sub-custodians, their agents, clearing houses or securities depositories. or equivalent electronic records. In the event of an irreconcilable shortfall following the insolvency of the relevant institution, clients will share in that shortfall in proportion to their original share of the assets in the pool. The manner in which such shortfall will be dealt with may vary in accordance with the provisions of applicable law and rules. In the event of such an irreconcilable shortfall, assets returned to Customers may be in the form of cash rather than securities.
Pooled Client Money
The FCA Rules require, with some limited exceptions, that in the event of the insolvency of SEI, all client money held by SEI be pooled and distributed to clients pro rata to their entitlements. This means that if there is a shortfall of client money compared to clients’ entitlements, you will bear a pro rata share of that shortfall. In the event of the insolvency of a bank or other financial institution with whom SEI has placed client money in a pooled account described in this document, all client money held in all such pooled accounts will be treated as pooled and any shortfall that arises will be allocated across the entitlements of
all relevant clients in accordance with the FCA Rules. Broadly, this means that if there is a shortfall of client money held in pooled accounts, you will bear a pro rata share of that shortfall.
Are there any additional risks if my investments are held by a third party in an overseas jurisdiction?
Where your investments are held in a country outside the UK, the legal, regulatory and settlement requirements in that jurisdiction may be different from those applicable in the UK. In the event of the insolvency of the third party, your investments may be treated in a different and less advantageous manner from that which would apply if they were held in the UK.
Will I be able to exercise voting rights attached to my investments?
Where your investment assets are registered in the name of a sub-custodian’s or depositary’s nominee, it may not be possible for you to directly attend annual meetings and similar corporate events. In the event of (i) a takeover, (ii) other offers or capital reorganisations and (iii) exercising voting, conversion and subscription rights, clients may be allowed to instruct SEI through Wealthsimple, where practicable. In some cases it may not be possible to split voting rights with regard to our collective customer position relating to a particular item. In these instances, we would normally elect in accordance with the majority of instructions.
How are payments and credits made?
SEI only makes payments in connection with the securities asset services provided to you under the Custody Agreement. SEI does not provide more general payment services. SEI will make payments from (or deposits to) the relevant client bank accounts in the course of carrying out its administrative duties, including (but not limited to) (i) the settlement of investment and foreign exchange (FX) transactions, (ii) income collection with respect to investments and (iii) otherwise in accordance with instructions conveyed on your behalf by us. SEI and its appointed sub-custodians will only credit amounts to the client bank accounts when monies are actually received in cleared funds in accordance with the prevailing banking practice in the country and currency of deposit. SEI reserves the right to reverse a debit from or credit to the relevant client bank account (and accordingly in its own records) if funds have been improperly credited or debited.
What terms apply if SEI makes advances, or your account is in arrears?
SEI does not provide credit or advance margin in the performance of its services. SEI does not make overdrafts available. However, from time to time, in administering your assets SEI (or a sub-custodian or other agent) may advance funds against expected receipt of transfers, proceeds of investment transactions or payments of income. If funds are advanced in this way, all such advances are immediately due and payable. Any credit that may be made to a client bank account or your records in advance of actual receipt of cleared funds is provisional and may be reversed in the event the funds are not actually collected.
Rights of lien over advanced funds
When SEI makes such an advance, it will have a lien and right of set-off over the amount advanced and any other of your assets held under custody (including over any investments purchased with such advance) as security for repayment of such advance. This security right will subsist until such time as: (a) the advance is settled by the receipt of transfers, proceeds of investment transactions or payments of income against which it was made, or, in default of this resolution (a) occurring, the advance is settled by; (b) a debit from cash held by SEI on your behalf within the client bank account; or (c) if such debit would produce a negative balance in the cash account, other reimbursement of the associated advance.
This lien will be exercised by selling or disposing of the relevant investment on such terms and conditions (including as to price and date) as SEI deems expedient without being responsible for any loss. The net proceeds of such sale will be applied to the discharge of the advance, together with any interest or expenses of the advance. Any excess will be credited to a client bank account for your benefit. Any sub-custodian (or other delegate) may have a similar lien in the event they make such an advance.
Other rights of lien or set off
Under the terms of the Custody Agreement, SEI will have (i) a right of lien over your assets, and (ii) a right of set-off against your cash, it holds for you, to the extent of its properly incurred charges and liabilities arising from the provision of a custody service to you. This lien will be exercised as set out above in this document. Sub- custodians and other depositaries used in the provision of SEI’s services to you may also have a security interest or lien over, or right of set-off in relation to, your assets or money that they hold, including in a pooled account.
What interest will be charged on advances of funds?
If any funds are advanced, interest will be applied as notified to Wealthsimple.
Foreign Exchange dealings
From time to time, in connection with the custody services SEI provides you under the Custody Agreement, it may be necessary for SEI to convert your cash into another currency (e.g., to settle atrade made in a foreign currency or convert distributions received in a foreign currency). In such circumstances SEI will provide the FX service itself and will set the buy and/or sell exchange rate in accordance with its foreign exchange fair execution policy (as updated from time to time). This service will be performed in accordance with the terms of the Custody Agreement or on such other terms as may have been agreed with Wealthsimple on your behalf. In providing this service, SEI shall be entitled to retain (i) any positive difference it receives from using the buy and sell rates it sets for you and its other clients and (ii) any difference between the buy and sell rates SEI can obtain for the currency in the market and the rate SEI sets for you and its other clients.
You may be required to provide margin for FX transactions services. Ownership of this margin will be transferred to SEI for the duration of the transaction. As such, the margin shall not be protected as client money during this period.
Any indebtedness arising from FX dealings shall be subject to the lien on assets described above. This FX service shall only extend to transactions that are considered to be effected for commercial purposes, such as ‘spot’ FX. Any FX transactions for investment or speculative purposes will need to be agreed and documented separately – including forward FX services which SEI is able to offer under separate terms and conditions.
How will income and other similar entitlements be collected?
SEI and its appointed sub-custodians will claim and receive all dividends, interest payments and other entitlements accruing to the investments held under safe custody. Items of income will be allocated to individual clients by SEI in accordance with the proportion in which clients hold the relevant asset, as reflected in SEI’s individual client account record. The same process will apply to entitlements to shares and any other benefits arising from corporate events where clients’ balances have been pooled.
What is your liability?
Under the terms of the Custody Agreement you agree to indemnify SEI against any loss suffered by it in carrying out its services, subject to any loss arising directly from negligence, fraud or wilful default on the part of SEI or certain persons it directly appoints to assist with the provision of the services. This indemnification does not cover any indirect or consequential loss.
What limits are there on the standard of care and liability that SEI accepts?
SEI will exercise reasonable care as can reasonably be expected of a professional custodian for hire in providing the safe custody service to you. SEI will only be liable for direct losses incurred by you in consequence of SEI’s own negligence, fraud or wilful default. SEI will not be liable for any indirect loss (including loss of profits, goodwill, reputation, business opportunity or anticipated saving), or for special or consequential damages, whether or not it has been advised of the possibility of such loss or damage. Liabilities arising in connection with any investments will be limited to the amount of your actual loss. No
reference will be made to any special conditions or circumstances known to SEI (or any other relevant party) at the time of entering into the Custody Agreement, or at the time of accepting instructions, which increases the amount of the loss.
Neither SEI nor any sub-custodian shall have a duty to assess the risks inherent in your investments or to provide investment advice with respect to such investments. You shall at all times bear any risks inherent in particular investments, for example the failure of a counterparty or issuer or any specific risks associated with a particular investment. In performing their duties, SEI and any sub-custodian shall be entitled to rely on (i) instructions received from us and (ii) information (such as pricing information) derived from reputable published sources or reasonably determined by them in their professional judgement.
Does SEI have any liability for acts or omissions of third parties?
SEI will not be liable for the network of clearing houses and other securities depositories that support it and its agents in the provision of a custody service to you, unless the entity is an affiliate of SEI (for these purposes an affiliate is an entity in which SEI (or one of its subsidiary companies) owns 10% or more of the shares or exercises management control, regardless of its shareholding in such entity). Where a sub-custodian chosen and directly appointed by SEI causes loss to you, SEI will only be liable to the extent that it has failed to exercise reasonable skill and care in the selection, appointment, supervision or continuing use of that entity.
What steps will SEI take to recover losses and damages caused by a third party?
SEI will take commercially reasonable steps to recover any losses or damages arising in connection with your assets where caused by the negligence, fraud or wilful default of a third party, but it cannot guarantee that it will be able to do so. Other than in relation to third parties whom SEI has appointed directly, SEI is entitled to be reimbursed for its reasonable costs and expenses incurred in taking such steps.
Who should complaints and claims be made to?
Any formal complaints against SEI should be referred in writing to Wealthsimple. We will pass the matter on to SEI to investigate and respond to you either directly or through us. If your complaint has not been resolved to your satisfaction, and you are an eligible complainant, you may be able to refer the complaint to the Financial Ombudsman Service (FOS), whose website is www.financialombudsman.org.uk. FOS is an organisation whose purpose is to give consumers a free and independent service for resolving disputes with financial firms. Details of the persons who are “eligible complainants” can be obtained from the FOS.
Will I be protected under the Financial Services Compensation Scheme?
SEI is covered by the Financial Services Compensation Scheme (FSCS). This means that in certain circumstances, and provided you are an eligible claimant, you may be entitled to compensation if SEI is in default and unable to meet its financial obligations to you. The maximum amount of compensation available to you under the FSCS for “protected investment business” is £50,000. It will be for the FSCS to determine whether, a further compensation limit of £85,000 applies to your client money in addition to the £50,000 referred to above. This will depend on the circumstances of the particular claim. In the event of a bank or sub-custodian’s insolvency, if there is a relevant connection between the subcustodian and the UK, it may be covered by the FSCS. UK regulated banks holding client money are all covered by the FSCS: provided a Customer is an eligible claimant then he/she would be entitled to compensation. As noted above, a compensation limit of £50,000 will apply for “protected investment business” and a compensation limit of £85,000 will apply to “protected deposits”.
Customers are further protected as their assets are registered in accordance with the FCA CASS Rules to make it clear that the relevant bank or sub-custodian is not the beneficial owner.
For further information about the scheme (including what services are protected, the amounts covered and eligibility to claim), please contact Wealthsimple or refer to the FSCS website: www.FSCS.org.uk. Circumstances where SEI cannot perform the services
SEI will not be liable for any loss arising through any acts, events or circumstances outside its (or its agents’) reasonable control, or resulting from the general risks of investments or the holding of assets in any jurisdiction. This includes (without limitation) (i) liabilities arising from any changes in applicable laws, orders or regulations of a governmental, supranational or regulatory body; (ii) nationalisation, expropriation or other governmental actions; (iii) regulation of the banking or securities industry including changes in market rules, currency restrictions, devaluations or fluctuations; (iv) market conditions affecting the execution or settlement of transactions or the value of assets; (v) breakdown, failure or malfunction of any third party transport, telecommunications, computer services or systems; (vi) natural disasters or acts of God; (vii) war, terrorism, insurrection or revolution; and (viii) strikes or industrial action.
Use of your data and information
SEI, acting at all times in accordance with the Data Protection Act 1998, will receive and process personal data regarding you and shall provide such personal data to sub-custodians and third parties as reasonably required to facilitate the custody and administration of the your investments. Each of these parties may retain this information in such form and for such duration as may be required to perform these duties. SEI or such other party may be required to transmit personal information to any country in which you hold investments or from where you derive income or profits.
1.1 You are subscribing to an ISA Account for the current tax year and each subsequent tax year by sending funds from your bank or transferring a current tax year ISA Account.
1.2 You can only subscribe to one ISA Account within each tax year.
1.3 To subscribe for an ISA Account you have to be a UK resident aged 18 or over.
1.4 This agreement will commence on the day we have both a valid application and receipt of your first subscription, or where you are transferring to us from another ISA manager, on the day we have both a valid transfer application form and receipt of the proceeds of transfer from your previous ISA manager.
2.1 Your ISA Account will be invested on a discretionary basis in accordance with your Objectives set out by you in your Account subject always to the requirements of HM Revenue & Customs (“HMRC”).
2.2 For each new tax year, all contributions to your Account will be allocated first to your ISA Account until the maximum subscription is reached for that year, or until your own pre-set limit. Once the maximum subscription or your own pre-set limit is reached, future contributions are allocated to the non-ISA remainder of your Account.
Investing in an ISA Account
3.1 Investments into an ISA Account may be by cheque, bank transfer, transfer of cash from an existing Portfolio held with us or by transfer from another ISA manager (subject to HMRC’s ISA transfer rules).
3.2 You will at all times be the beneficial owner of any investments held in your ISA Account. You must not use the investments and/or cash in your ISA as security for a loan except to the extent permitted by the Individual Savings Account Regulations 1998 (“Regulations”).
3.3 The total of contributions to be invested in any tax year will not be more than the maximum permitted to be invested in stocks and shares by the Regulations for that tax year.
4.1 If you so request in writing, we will arrange for you to:
(a) receive the report, accounts and other information issued by a company, attend and vote at such shareholders’ meetings or unit holders’ meetings. Where you do this, we shall use reasonable endeavours, where possible, to make appropriate arrangements on the terms and within the timescales we may impose; and
(b) exercise any voting rights attached to your investments, whether exercisable at an annual general meeting (“AGM”) or otherwise. We are not obliged to but we may notify you of any AGMs applicable to your investments.
Withdrawing your ISA Investment
5.1 You will not incur tax liabilities by withdrawing. We will send an acknowledgment of your instructions to you at the email address you designate in your Account.
5.2 At your request, we will transfer all or part of your ISA investments (with the associated rights and obligations) to another ISA manager, subject to HMRC’s ISA transfer rules.
5.3 We will process your withdrawal or transfer request promptly and normally within the 30 day maximum period stipulated by HMRC, subject to circumstances outside our control. Should you wish the withdrawal or transfer to take place at a particular time, we will endeavour to meet this request. However, in the case of transfers, we are reliant on the receiving manager and cannot guarantee to do so.
6.1 You authorise us to disclose to HMRC all such information as required by law. We will notify you by email if, by reason of any failure to satisfy the provisions of the Regulations, your Stocks and Shares ISA becomes void.
1.1 By opening a JISA account on behalf of the Child, you declare that you have parental responsibility for the Child, and accordingly, are the ‘Registered Contact’.
1.2 You warrant and represent to us and to the Platform Provider (upon opening the JISA account and, except in relation to 1. below, on an ongoing basis) that:
(a) the Child is resident in the UK or is a UK Crown servant, a dependant of a UK Crown servant or is married to or in a civil partnership with a UK Crown servant;
(b) you are the Registered Contact;
(c) the Child is not a U.S Person; and
(d) the Child was born after 3 January 2011 or does not have a Child Trust Fund.
You agree to notify us immediately if any of the above warranties cease to be correct.
Change of the Registered Contact
3.1 Consent of the existing Registered Contact is required in order for another person, with parental responsibility for the Child, to become the Registered Contact. To change the Registered Contact, please contact us for further information and appropriate application forms.
4.1 Where permitted, contributions to the JISA may be made by any person by way of cash payment. All contributions made to the JISA are considered a gift to the Child and cannot be repaid at a later date.
4.2 You must not subscribe the Child to a Wealthsimple JISA if you have already subscribed the Child to any other JISA, unless you are transferring that JISA to the Wealthsimple.
5.1 Investments may not be withdrawn from a JISA, except after the Child’s 18th birthday, where the Child is terminally ill or as otherwise permitted under the ISA Regulations.
6.1 On the Child’s 18th birthday, the JISA will remain in the tax-free wrapper, but will be subject to the terms and conditions specific to an ISA (see Schedule 8, ISA Terms). Once converted to an ISA, further subscriptions cannot be made until the Child:
(a) notifies Wealthsimple of his National Insurance Number; and
(b) provides the necessary application details as required by Wealthsimple.
Changes to ISA Regulations
7.1 If any investment in the JISA ceases to be permitted by the ISA Regulations, then Wealthsimple shall inform you of the options available. If Wealthsimple does not receive an appropriate response within 30 days, then it reserves the right to sell that investment.
Death of the Child
8.1 The tax advantages of the JISA will cease in the event of the Child’s death and Wealthsimple will close the JISA. Wealthsimple will hold the JISA investments, together with any income that accrues after the death of the Child in its client account until it can pay it according to the executors’ or personal representatives’ instructions. Wealthsimple will cease to reclaim tax on any income distributions received after the date of the Child’s death and will repay to HMRC any tax refunds already received in respect of income paid after the date of the Child’s death.
9.1 Wealthsimple will only accept cash transfers in. Partial transfers in will not be accepted. You may only transfer in all of the previous tax years’ subscription for the Child with another JISA manager and must transfer In all of the current tax year subscriptions from another JISA manager. Wealthsimple may accept transfers in of part of a previous tax year’s subscription at its discretion.
You can request for Wealthsimple to transfer all of the Child’s JISA, held with Wealthsimple to another JISA plan manager (“Transfer Out”). Transfers Out in specie are subject to administration fees.
You will need to contact the new JISA plan manager and make arrangements in accordance with their requirements. The new ISA plan manager will need to contact Wealthsimple to arrange for the transfer.
1.1 These terms and conditions set out how Embark Services Limited (“Embark”) operates the Wealthsimple Pension Plan and explain your rights and benefits under it. Embark has a legally binding agreement with us, in addition to the following:
(a) Submitted online application for the Wealthsimple Pension Plan;
(b) these terms and conditions (the “Pension Terms”) and any documentation you receive from Embark confirming the scheme has been set up; and
(c) any subsequent documents Embark sends to you concerning changes to the above documents.
1.2 In addition to the documents that form the legally binding agreement, the following documents provide important information: The Key Features Document; your personalised illustrations; and the annual renewal packs that Embark sends to you. Please read these documents carefully and keep them together in a safe place for future reference. Embark can change the Pension Terms in the circumstances described in Section 19 of this Schedule.
1.3 Embark and the Independent Trustee limit their liability for specific aspects of the Wealthsimple Pension Plan. Embark has an agreement with Wealthsimple in relation to fees. Wealthsimple will be responsible for all fees whilst this agreement is in place between Embark and Wealthsimple. If the agreement between Embark and Wealthsimple ceases, you will be responsible for paying specific fees, costs and losses to Embark otherwise payable by Wealthsimple.
1.4 Neither Embark nor the Independent Trustee provide any investment management or advisory services under these terms and conditions. Wealthsimple is responsible for selecting the investments within the Wealthsimple Pension Plan. Embark or the Independent Trustee are not responsible for selecting investments, monitoring investments or investment performance.
1.5 Your plan is based on the declarations you make to Embark and the information you disclosed to Embark on the online application form (in both cases either directly or via Wealthsimple).
Wealthsimple Pension Plan
2.1 Wealthsimple Pension Plan operates within a scheme that is established under trust and is governed by the Pension Rules. Embark is responsible for operating and administering the Wealthsimple Pension Plan. Embark imposes conditions and restrictions on how the plan operates under the scheme, which are set out in these Pension Terms. If there is any inconsistency between the Pension Terms and the Pension Rules, the Pension Rules prevail.
2.2 These Pension Terms apply to each arrangement under the Wealthsimple Pension Plan and, for the purposes of the Pension Rules, to each Individual Fund.
2.3 You can access a copy of the Pension Rules on our website or ask us for a copy. It might be necessary to change the provisions of the Pension Rules to meet with any changes to law or regulation affecting the Wealthsimple Pension Plan. Embark will provide notice to you of any significant changes. Unless Embark decides otherwise, notice of changes under this section 2 will be published via Wealthsimple.
3.1 The assets in your Wealthsimple Pension Plan are held by the Embark Trustees Limited or any successor appointed by them (the “Independent Trustee”). The Independent Trustee may delegate custody of your cash and assets to an appointed sub custodian. For investment matters, Embark directs the Independent Trustee to act only according to investment instructions received from Wealthsimple. For all other matters, the independent trustee acts according to Embark’s direction only.
4.1 Anyone can apply to become a member providing they are over 18 and under the age of 75 at the time of application. Embark reserves the right to decline any application at their discretion. If Embark accepts an application, the individual becomes a Member.
4.2 Embark will treat you as a retail client for the purposes of the rules of the Financial Conduct Authority.
Contributions & Tax Relief
5.1 As a Member you can contribute to your Wealthsimple Pension Plan. Contributions can be regular or single contributions. Embark will receive contributions from you or from your employer. Contributions can continue after you take retirement benefits in the form of a Lifetime Annuity or Drawdown Pension. Contributions cannot continue after you reach age 75.
5.2 The minimum contribution limit set by Wealthsimple is currently £2000.
5.3 There is a limit on contributions for which you can get tax relief each year – see the section 5.6 below. Embark can change the minimum or maximum limits or both by changing these Pension Terms pursuant to Section 19.
5.4 Regular contributions must be paid by direct debit. Embark at its discretion may allow for single contributions to be paid using debit card or bank transfer.
5.5 Embark will act as the collecting agent whereby all contributions will be paid to the Independent Trustee and those contributions together with any basic rate tax relief received on member contributions, will be passed to SEI acting as the custodian (in accordance with the Custody Terms included in Schedule 5 to this Agreement).
5.6 Legislation limits the amount of tax relief on your contributions or contributions paid by others for you. As of the date of this Agreement, you can claim tax relief on personal contributions up to the higher of:
(a) £3,600 p.a. (including the allowance for basic rate tax relief); and
(b) 100% of your relevant UK earnings in the same period. (“Relevant UK Earnings” means earnings or income subject to UK income tax, as defined in the Finance Act 2004).
The above limits are subject to change.
5.7 Embark will claim the basic rate tax relief from HMRC on the contributions made by you or on your behalf. You must normally be a UK resident for tax purposes in order for the tax relief to be claimed. The basic rate tax relief will be applied at the date of receipt of contribution unless the service of ‘pre funding’ no longer operates. Embark can terminate or suspend the pre-funding service at any time. If Embark chooses to terminate or suspend the pre-funding service, basic rate tax relief will be applied to all eligible contributions at the point the tax relief is received from HMRC, which is normally within 4-8 weeks from the date a contribution is paid. Tax relief is normally received on the 21st of the month.
5.8 You can claim higher rate tax relief through your Self Assessment tax return. Tax relief on personal contributions paid on behalf of an individual is attributable to that individual as opposed to the person who actually pays the contribution. An employer should claim tax relief as a business expense on any employer contributions.
5.9 Any contributions over the tax relief limit can, with Embark’s agreement, still be paid into your plan, but you will not receive any tax relief on them.
5.10 If you are or have been a Scottish resident, the tax relief you receive might be different.
6.1 If your total contributions exceed the annual allowance, there might be a tax charge on you. The annual allowance is the maximum amount of pension saving you can have each year that benefits from tax relief. It will be lower once you have triggered the money purchase annual allowance (see Section 7 of this Schedule), and in any year for which your earnings plus employer contributions exceed the adjusted income (£150,000 for 2018/19 tax year) and a tapered annual allowance is triggered. It applies to all pension savings that you make plus any pension savings made for you by someone else – for example, your employer – in any pension scheme. The tax charge is called the annual allowance charge, which HMRC would levy against you directly via your tax code or, in certain circumstances, against Embark and which Embark would recover from your Individual Fund. You are responsible for notifying the HMRC if the annual allowance is exceeded.
6.2 It is possible to carry forward “unused annual allowance” from the previous three tax years to achieve tax relief on contributions over the annual allowance, provided that you were a member of a registered pension scheme during those years, and you are not subject to the money purchase annual allowance (see section 7 of this Schedule). You should seek advice from a Financial Adviser if you are planning to make contributions over the annual allowance.
6.3 There will be no test against the annual allowance in the year that you die, or if your pension entitlement is paid as a serious ill health lump sum.
Money purchase annual allowance
7.1 Once you have accessed any income from any of your pension savings using Flexi-access drawdown pension (see section 13.4) or by taking an Uncrystallised Funds pension lump sum you are subject to the money purchase annual allowance from that tax year onwards.
7.2 If you are subject to the money purchase annual allowance (£4,000 for the 2018/19 tax year), you will be liable to an annual allowance charge on the amount of your total contributions to money purchase pension schemes that exceed the money purchase annual allowance in any tax year, and on the amount of your benefit accrual in other schemes providing defined benefits for that tax year (if any) that exceeds the annual allowance described in section 6 above less the total contributions, up to a maximum of the money purchase annual allowance, made to money purchase schemes.
Refund of excess contributions
8.1 If you have paid pension contributions over the tax relief limit, you can ask Embark to refund the excess. Provided the refund would not be an unauthorised payment, Embark will refund the lower of the excess contribution and the value of the part of your individual fund attributable to that excess contribution. In addition, HMRC will require Embark to repay the full amount of the basic rate tax relief that it has claimed on the excess contribution.
8.2 If contributions are paid which result in the annual allowance or money purchase annual allowance being exceeded, you cannot avoid the annual allowance charge simply by obtaining a refund of contributions from Embark.
Transfer payments into the scheme
9.1 Unless Embark otherwise decides, a Member can transfer benefits from another Registered Pension Scheme to the Wealthsimple Pension Plan, including benefits already in drawdown pension.
9.2 You cannot transfer benefits from any public sector pension into the Wealthsimple Pension Plan
9.3 Where you wish to transfer benefits from a defined benefit pension valued at more than £30,000 into the Wealthsimple Pension Plan then unless you provide us with evidence you have been advised to do so by a suitably qualified financial adviser, Embark cannot agree to proceed with the transfer.
9.4 Any individual who has become entitled to Drawdown Pension on the death of a member under another registered pension scheme can apply to transfer the entitlement into the scheme for the purpose of continuation of Drawdown Pension. The application must be in writing on a form prescribed by Embark, which includes the individual’s agreement to these Pension Terms. Embark reserves the right to decline such an application at its discretion. If Embark accepts the application, the individual is treated as a Beneficiary.
9.5 Transfers in can be made by cash payment (by cheque or direct credit) or in specie.
9.6 When making a transfer in or a transfer in of benefits that have already been designated for the payment of a drawdown pension you agree to the following declarations, made to the administrator or provider of the transferring scheme (the “Current Provider”), and to Embark and the Independent Trustee, as the context requires:
(a) I authorise and instruct you to transfer funds from the plan(s) as listed in the appropriate section of my application directly to Embark. Where you have asked me to give you any original policy document(s) in return for the transfer of funds and I am unable to do so, I accept that I will be responsible for any losses and/or expenses the Embark or the Current Provider incurs which are the result, and which a reasonable person would consider to be the probable result, of any untrue, misleading or inaccurate information deliberately or carelessly given by me, or on my behalf, either in this form or with respect to benefits from the plan.
(b) I authorise you to release all necessary information to Embark to enable the transfer of funds to Embark.
(c) If an employer is paying contributions to any of the plans as listed in the appropriate section of my application, I authorise you release to that employer any relevant information in connection with the transfer of funds from the relevant plan(s).
(d) Until this application is accepted and complete, Embark’s responsibility is limited to the return of the total payment(s) to the Current Provider(s).
(e) Where the payment(s) is made to Embark of all of the funds under the plan(s) listed in the appropriate section of my application, I acknowledge that I shall no longer be entitled to receive pension or other benefits from the plan(s) listed.
(f) Where the payment(s) made to Embark represent(s) part of the funds under the plan(s) listed in the appropriate section of my application, I acknowledge that I shall no longer be entitled to receive pension or other benefits from that part of the plan(s) represented by the payment(s).Where I have taken benefits from any pension arrangement, with the current or any other pension provider, in a way which means I am subject to the Money Purchase Annual Allowance (“MPAA”), I confirm I have supplied the date the MPAA first applied to me in the appropriate section of my application.
(g) I authorise you to obtain from and release to the financial adviser named in this application any additional information that may be required to enable the transfer of funds.
(h) Where I am transferring a capped drawdown arrangement(s) to a flexi-access drawdown arrangement(s), I will be subject to the Money Purchase Annual Allowance (MPAA) from the date of my first flexi-access payment, or
(i) Where I am already subject to the MPAA, I have supplied the date the MPAA first applied to me in the appropriate section of my application.
Transfer payments out of the scheme
10.1 You can transfer all or part of your individual fund to another Registered Pension Scheme or overseas pension scheme allowed by HMRC rules. You need to check that the proposed scheme is willing to accept the transfer. If you are transferring part only of your Individual Fund, you must tell Embark which assets are to be sold or cashed in before it can arrange the transfer. If your plan is designated in drawdown you are unable to part transfer the plan to another registered pension scheme or overseas scheme.
11.1 Embark will open a bank account for your Wealthsimple Pension Plan (the “Designated Account”). The bank account selected by Embark is opened as a trust account in the name of the Independent Trustee. Once the monies have been received in the Designated Account, they will be transferred for investment purposes to SEI and held in accordance with the Custody Terms in Schedule 5 of this Agreement.
11.2 For audit purposes all contributions, transfers and benefit payments will be recorded in the “general ledger” for Embark’s operating system as having been credited to or debited from your Designated Account.
11.3 Embark gives instructions to the Independent Trustee in relation to the operation of the Designated Account and the Independent Trustee is the only authorised signatory.
11.4 The Designated Account may earn interest on the balance of the account. Any cash held in the Designated Account will be automatically transferred to your Wealthsimple Account and invested in accordance with Wealthsimple’s instructions. Any interest earned will be paid annually to a registered charity selected by us and will not be paid to you. If the interest earned by the Designated Account is less than the interest paid by the bank to us across all the accounts we have with them, we keep the difference.
11.5 Embark does not hold client money. Money which is held in the Designated Account falls outside the scope of protection provided by the Client Money Rules as set out in the Financial Conduct Authority’s Client Assets Sourcebook.
11.6 The Designated Account must not go overdrawn.
11.7 Embark operates central clearing client account(s) through which cash amounts pass before or after being allocated to your designated account, as follows:
(a) any amounts to be invested are transferred from the Designated Account to the central clearing client account up to 5 business days prior to us processing your instruction;
(b) the amount of any expenses and costs being paid from your plan is transferred from the Designated Account to the central clearing client account up to 5 business days prior to paying the recipient;
(c) the gross amount of any pension income payments is debited from the designated account up to 5 business days prior to the payment date and transferred to the central clearing client account;
(d) any tax deducted under PAYE from pension income paid to you from the Designated Account is credited to the central clearing client account pending payment to HMRC.
11.8 The central clearing client account(s) are non-interest bearing accounts.
11.9 If there is not enough cleared money to make any payment due under these terms Embark will instruct the Independent Trustee to make a disinvestment from the Wealthsimple Account.
11.10 Neither the Independent Trustee nor Embark is responsible for determining which assets should be sold under these terms in order to provide sufficient cleared money.
11.11 You will instruct Embark to commence the disinvestment process 11 business days before payment is due.
12.1 When you applied for the Wealthsimple Pension Plan you chose a retirement age, which must be on or after your 55th birthday (subject to change). This is the age you intend to take retirement benefits, although you do not need to actually retire to take benefits. You can change your chosen retirement age by telling us in writing via Wealthsimple.
12.2 If you are in ill health or serious ill health, as defined in the Finance Act, it might be possible to start taking benefits earlier than your 55th birthday. “Ill health” is where evidence has been provided by a registered medical practitioner that you are and will continue to be medically incapable (either physically or mentally) as a result of injury, sickness, disease or disability of continuing your current occupation and, as a result of the ill-health, you cease to carry on the occupation. “Serious ill health” is where evidence has been provided by a registered medical practitioner that your life expectancy is less than a year.
12.3 If you believe you may be entitled to take your benefits early for any reason please contact Wealthsimple for further guidance.
12.4 Within a reasonable period (consistent with good practice) before your chosen retirement date, Embark will provide you with information about your benefit options and the tax implications of taking benefits. Embark will also issue you with a reminder that you can choose to take guidance on your options under the Government’s “Pension Wise” scheme. If required by the rules of the Financial Conduct Authority, Embark will ask questions to determine if you have received advice or guidance. Depending on your reply, at each stage Embark shall proceed to identify risk factors and provide risk warnings. You must then give Embark at least one month’s notice in writing of your selected option(s) before the date you wish to take benefits.
12.5 You are responsible for ensuring that there is enough cleared money in the Designated Account available in good time to pay any benefits you have chosen to take. If there is not enough cleared money in the Designated Account to pay the benefits, Embark will request Wealthsimple to sell assets within your investment account with Wealthsimple.
12.6 Depending on how Wealthsimple has chosen to invest your plan there may be an unavoidable delay in selling the assets, which could delay the benefit payment. If Embark thinks this may occur in respect of your plan it shall let you know within a reasonable period before your chosen retirement date or, where this is not possible or where you nominate to take benefits at a different time, as soon as reasonably practicable after it has received your nomination.
12.7 You can take benefits from your plan in either or both of the ways described in (b) and (c), each with or without (a), or in the way described in (d) on its own:
(a) take a tax-free lump sum (also known as pension commencement lump sum), when you apply your individual fund to provide a lifetime annuity or drawdown pension). Normally, the maximum tax-free lump sum will be 25% of the value of the part of your individual fund being used to provide these benefits. If you have higher tax-free lump sum rights in respect of benefits earned before 6 April 2006, it might be possible to take more than 25% as a tax-free lump sum;
(b) buy a lifetime annuity with the balance of all or part of your individual fund (after any tax free lump sum). Certain documentation must be completed before a lifetime annuity can be purchased. You must agree the relevant amount to be paid to the insurance company for the lifetime annuity and that you will have no further interest in the Individual Fund in respect of the amount used to buy the lifetime annuity. You can purchase a lifetime annuity using all or part of the value of the Individual Fund;
(c) take drawdown pension with the balance of all or part of your Individual Fund.
(d) provided you have enough lifetime allowance remaining, take a lump sum without applying your Individual Fund to provide a lifetime annuity or drawdown pension, called an uncrystallised funds pension lump sum (UFPLS). 25% of the lump sum is tax-free and the rest is subject to income tax.
12.8 The value of your individual fund being used to provide benefits must be tested against an allowance called the lifetime allowance, set by HMRC. If the lifetime allowance is exceeded, there will be a tax charge. We will deduct the tax charge due from the retirement benefits being taken and pass this to HMRC. For further details of the circumstances in which this tax charge will arise, please contact Embark, either directly or via Wealthsimple. Also, your lump sum rights may be restricted if your benefits exceed the lifetime allowance.
12.9 Embark will pay any lump sum and any drawdown pension payments by direct credit (BACS) into your chosen bank or building society account.
13.1 Drawdown Pension means drawing an income from your Individual Fund. You can do this if you are:
(a) a Member aged over 55;
(b) a Member in ill health;
(c) a Member with a protected retirement age; or
(d) a Beneficiary entitled to a pension under the plan
and Embark has accepted your application for drawdown pension.
13.2 You do this by designating all or part of your Individual Fund as being available for providing drawdown pension. The designation must be made in the form that Embark provides for this purpose.
13.3 Acting reasonably, Embark can at its absolute discretion refuse your application for Drawdown Pension. Embark will tell you as soon as practicable if this is the case. The acceptance of your application for drawdown pension is on such terms and subject to such requirements as Embark may decide at our absolute discretion from time to time. Without prejudice to the generality of the foregoing, Embark may require you to take advice from a Financial Adviser before accepting your application.
13.4 With Flexi-access drawdown pension you can take out as much of your Individual Fund as you want after having taken your tax-free lump sum. You can increase, reduce and/or ask Embark for an extra one-off Flexi-access drawdown pension payment. You can choose for Flexi-access Drawdown Pension to be paid on a monthly, quarterly, half-yearly or yearly basis.
13.5 Embark will require you to apply to request to start, stop or vary Flexi-access drawdown pension in a format acceptable to it, and it will treat each such request as an application for Drawdown Pension.
13.6 The contract between you and us includes a right to impose a minimum on the amount that you can designate for providing Flexi- access Drawdown Pension. For the time being we have decided to waive this right, however if we reinstate a minimum we will give you details by notice as described in section 19.
13.7 With capped drawdown pension, there is a maximum limit on the income that can be taken, set by HMRC rules. Any transfer received in respect of a pension currently in capped drawdown will be converted to Flexi access drawdown on receipt of transfer. You should be aware that converting from capped drawdown to flexi-access drawdown triggers the Money Purchase Annual Allowance.
Benefits following Member’s death
14.1 On the death of a Member, the Member’s remaining Individual Fund is used to pay a number of different benefits, which are described below. Upon being notified of the death, we will write to the Member’s personal representatives or potential beneficiaries (as applicable) with details of the ways in which benefits can be provided from the Members’ Individual Fund.
14.2 If Embark is satisfied that at the time of the member’s death the member’s benefits are subject to a “valid trust”, Embark will apply any uncrystallised fund on death as a lump sum to the trustees of that trust. A valid trust is one under which no beneficial interest in a benefit can be payable to the member, the member’s estate or the member’s legal personal representatives.
14.3 In all other cases, on the Member’s death, Embark will use the Member’s remaining Individual Fund in either or both of the following ways as Embark in its absolute discretion determine:
(a) to provide pension income in accordance with section 14.5 for any one or more beneficiaries and, if more than one, in such proportions as we decide; and
(b) to pay a lump sum death benefit in accordance with section 14.8 to one or more recipients as we decide (from the range of possible “lump sum beneficiaries”, as defined in the rules) and in such proportions as we decide.
14.4 The Member can complete an Expression of Wish form to inform Embark of the Member’s wishes for who should receive death benefits and the form of those benefits (lump sum or pension) for when it is exercising its discretion. Embark will take the Member’s wishes into account but it is not bound by them.
14.5 Any beneficiary who becomes entitled to a pension under this Section 14 must take the pension in either or both of the following ways:
(a) buy a lifetime annuity in the Beneficiary’s name, using part or all of his or her Individual Funds; or
(b) apply to take income as Drawdown Pension (see section 13), using part or all of his or her Individual Funds. Any application for Drawdown Pension must be made in writing using the application form prescribed by Embark, which includes the beneficiary’s agreement to these terms and conditions. Embark recommend that the beneficiary appoints and takes advice from a Financial Adviser and Embark may require any beneficiary to do so before we accept the application. Embark can decline an application if the beneficiary is not habitually resident (i.e. does not normally live) in the UK and this would in, Embark’s opinion, likely lead to an unauthorised payment or would limit or restrict in any way our ability to administer the scheme. We will write to the beneficiary confirming if the application is successful.
14.6 If a Beneficiary fails to decide which option should be used for pension income within three months of being asked to do so (or such longer period as Embark, at its discretion, decides), Embark can buy a Lifetime Annuity for that person, from a pension provider of Embark’s choice.
14.7 The tax treatment of a Dependant’s, Nominee’s or Successor’s Drawdown Pension is set out in the Finance Act. Normally, benefits payable in the event of the Member’s death before age 75 are paid without deduction of tax, provided the designation of benefits for the payment of a dependant’s, Nominee’s or Successor’s Drawdown Pension is made within two years of the Member’s death.
14.8 Any lump sum to be paid under this section in the event of a Member’s or Beneficiary’s death before age 75 may be paid without any tax being deducted unless the lump sum is not paid within two years of the date Embark first received notification of the member’s or beneficiary’s death or, if earlier, the date Embark could have first reasonably been expected to have known of the Member’s death. The value of any Uncrystallised Fund must be tested on the Member’s death against an allowance called the lifetime allowance which is set by HMRC (see section 22.4). If the lump sum exceeds the member’s individual lifetime allowance available on the Member’s death the recipient will be subject to a lifetime allowance charge.
14.9 The tax treatment of benefits depends on the individual circumstances of each Member and may be subject to change in future. Embark will make reasonable enquiries with you to establish how much tax it is obliged to pay to HMRC. Embark will deduct any tax which it believes may be payable before making any payment. If you do not provide us with the satisfactory written evidence Embark needs to establish the correct amount of tax liability, Embark shall be entitled to assume that the highest rate of tax under the applicable legislation must be paid.
Benefits following Beneficiary’s death
15.1 If a Beneficiary dies while taking income through Drawdown Pension Embark will use the Beneficiary’s remaining Individual Fund in either or both of the following ways as it in its absolute discretion shall determine:
(a) to provide pension income in accordance with section 14.5 for any one or more successors and, if more than one, in such proportions as Embark decides; and
(b) to pay a lump sum death benefit in accordance with section 14.8 to one or more recipients as we decide (from the range of possible “lump sum beneficiaries”, as defined in the rules) and in such proportions as Embark decides.
15.2 The beneficiary can complete an Expression of Wish form to inform Embark of his or her wishes for who should receive death benefits. Embark will take the beneficiary’s wishes into account but is not bound by them. Any tax charge(s) will be deducted before payment.
Taxation of income payments
16.1 If you are receiving income payments from the scheme, the income you receive will, if applicable, be taxed under the Pay As You Earn System. If Embark has taken reasonable steps to identify your correct tax code, or is otherwise acting in accordance with any guidance for scheme administrators issued by HMRC from time to time (including in certain circumstances where the application of an Emergency Code is recommended) Embark will not be liable for any loss whatsoever that you incur as a result of the use of an incorrect tax code.
16.2 If you are receiving income payments from the scheme, Embark will provide you with a P60 at the end of each tax year showing the gross income paid, tax code used and details of any tax deducted.
Complaints and compensation
17.1 Should you wish to register a complaint in relation to the operation of the Wealthsimple Pension Plan, Embark and Wealthsimple will accept your complaint by phone or in writing (including by email). We have the right to telephone you, or someone else nominated by you, to discuss any administrative aspects without having been expressly invited by you to do so.
17.2 If you are not satisfied with any aspect of the service that you have received from us, Embark and Wealthsimple have a formal complaints procedure, a copy of which is available on request.
17.3 If you are not happy with our response to your complaint, you might have the right to refer it to the Pensions Advisory Service (“TPAS”), The Pensions Ombudsman (“TPO”) or the Financial Ombudsman Service (“FOS”)
17.4 TPAS are an independent non-profit organisation providing information and guidance on pensions to help pension scheme members who have a problem, complaint or dispute with their pension scheme.
17.5 FOS and POS are both independent statutory bodies that investigate and adjudicate on disputes between pension schemes and members, but only after you have complained to us and tried to resolve the dispute using our complaints procedure. Embark and/or Wealthsimple will tell you about any ombudsman referral rights you have.
TPAS contact details: The Pensions Advisory Service 11 Belgrave Road London SW1V 1RB Tel: 0300 123 1047
TPO contact details: The Pensions Ombudsman 11 Belgrave Road London SW1V 1RB Tel: 020 7630 2200
FOS contact details: Financial Ombudsman Service Exchange Tower London E14 9SR Tel: 0300 123 9123
18.1 The Financial Services Compensation Scheme (FSCS) is a scheme that provides limited compensation for customers who might otherwise lose out if a company regulated in the UK by the Financial Conduct Authority is unable to pay claims against it.
18.2 Investments in the Wealthsimple Pension Plan might be covered by the FSCS. If compensation is available in respect of an investment in your Wealthsimple Pension Plan, Embark will make the claim on your behalf.
FSCS contact details: Financial Services Compensation Scheme 10th Floor Beaufort house 15 St Botolph Street London EC3A 7QU Tel: 0800 678 1100 www.fscs.org.uk
Please ask Embark (either directly or via Wealthsimple) if you have any questions about the FSCS or the protection it provides.
Changing these terms and conditions
19.1 Embark can change these terms and conditions for any of the following reasons:
(a) to respond proportionately to changes in general law or decisions of the Financial Ombudsman Service or The Pensions Ombudsman or the Financial Services Compensation Scheme or of a court;
(b) to meet regulatory requirements;
(c) to reflect new industry guidance and codes of practice which raise standards of consumer protection;
(d) to reflect a change in Embark’s corporate structure that does not have a significant unfavourable effect on your rights under the scheme but which does require it to make certain changes to the terms and conditions;
(e) to respond proportionately to changes in the Bank of England base rate, other specified market rates or indices or tax rates;
(f) to proportionately reflect other legitimate cost increases or reductions associated with providing the scheme;
(g) to provide for the introduction of new or improved systems, methods of operation, services or facilities associated with providing the scheme;
(h) to correct any mistake in these Pension Terms, provided the correction does not have a significant unfavourable effect on rights that you have as a result of the mistake; or
(i) to reflect the appointment by Embark of alternative third parties to provide services under the scheme or to respond proportionately to changes in the terms or charges of any third parties appointed under the scheme.
19.2 Embark give you notice of any change under this section 19.1 in advance where practicable, or at the earliest opportunity after the change where advance notice is not practicable. Embark aims to review these Pension Terms regularly.
19.3 Further, Embark can change these Pension Terms. if they have any other valid reasons for doing so. Embark will not charge for transferring out your individual funds if:
(a) a change under this Section 19.1 has any unfavourable effect on your rights under the scheme; and
(b) Embark receives your written request to transfer within 30 days’ of notice of the change.
19.4 Although, in these circumstances, Embark will not charge for the transfer, any outstanding charges will still be payable and any fees and charges for cashing in or selling assets, will still be charged. Embark give you at least 30 days’ notice of any change under this section 19.1.
19.5 Unless Embark decides otherwise, notice of any change to these terms and conditions will be published on the Wealthsimple website only.
20.1 These Pension Terms continue until your Individual Fund has been extinguished through the payment of a transfer value to another Registered Pension Scheme, ROPS or the provision of pension or death benefits outside the scheme or until the scheme is wound up in accordance with the rules.
20.2 On wind up, Embark will apply the assets of your individual fund as set out in the rules.
20.3 Wind-up will be without prejudice to the completion of transactions already initiated. The Independent Trustee is authorised to continue to operate the designated account to Embark’s order and direction for the purposes of receiving money, paying benefits and paying any expenses or charges due to Embark, the Independent Trustee or other parties.
21.1 Embark has the right to delay calculation of any amount due under the plan until it has received satisfactory proof of ownership. Similarly, the exercise of rights conferred by the plan and payment of any benefit is subject to satisfactory proof of ownership.
21.2 You need to tell Embark as soon as possible if you move to another address or if there are any other relevant changes to your personal circumstances. If you are in doubt as to whether a change is relevant, please contact Wealthsimple Customer Success.
21.3 Your plan may be subject to a Pension Sharing Order under the Welfare Reform and Pensions Act 1999 but otherwise may not be assigned, mortgaged or charged in any way by you.
21.4 These Pension Terms (and the documents described in section 1 as forming the legally binding agreement with you) constitute the entire agreement between you and Embark and supersede all previous versions.
21.5 These Pension Terms will be governed by and construed in accordance with the laws of England. The English courts are to have exclusive jurisdiction to settle any disputes or claims that may arise out of or in connection with these terms and conditions. Embark, the Independent Trustee and you agree to submit to the exclusive jurisdiction of the English courts.
21.6 Embark, the Independent Trustee and you can enforce the Pension Terms. Nothing in the terms and conditions expressly or impliedly confers any right on any third party to enforce any of its provisions under the Contracts (Rights of third Parties) Act 1999. For the purpose of this section, a third party is any party not already mentioned in this paragraph.
21.7 These Pension Terms will only apply provided they are not held by a relevant court or decided by the Financial Conduct Authority to be unfair contract terms or reasonably considered by Embark to be unfair contract terms. If a term is held, viewed or considered to be unfair it will, as far as possible, still apply but without any part of it which could cause it to be held, viewed or considered unfair.
Data protection and confidentiality
22.1 Embark the data controller of any information it holds about you. It will comply with all relevant data protection legislation.
22.2 Your information includes any details which Embark holds about you and includes information received from third parties. Embark will use your information for the purpose of establishing, processing and administering the scheme. You accept that even if the application to join the scheme does not proceed, your information can be stored for regulatory, statutory or audit purposes.
22.3 Embark will not disclose your information to anyone outside the Embark Group unless:
(a) it is to any person Embark reasonably believes to have been appointed by you as your financial adviser, investment manager or professional adviser; or
(b) Embark has your permission; or
(c) Embark has required or permitted to do so by law; or (d) Embark is transferring your information to its third party providers, credit reference agencies and fraud prevention agencies; or
(e) Embark has transferred its rights and obligations under the Pension Terms.
22.4 Embark can transfer your information to other countries but this will only be done if the receiving country has an appropriate level of data protection. Your information may be accessed by law enforcement agencies and other authorities in that country to prevent and detect crime.
22.5 You can request a copy of the information Embark hold about you by writing to the Data Protection Officer, Embark Services Limited, at the address Tyman House, 42 Regent Road, Leicester LE1 6YJ. Embark reserves the right to charge a small fee in accordance with the guidelines of the Information Commissioner’s Office.
Responsibility and Liability
23.1 Your rights in relation to your plan are limited to those detailed in these Pension Terms. You waive any other rights that you otherwise have had to make any and all legal claims at any time against any previous, current or future officers, employees, agents and sub-contractors of Embark, or of any company within the Embark Group.
23.2 You are responsible for
(a) communicating with Embark in a way that complies with the rules and these Pension Terms.
(b) any benefit options, benefit nominations and all other matters which are within your control or in respect of which you provide, or are entitled to provide.
23.3 You are also responsible to Embark for all reasonable costs, claims, expenses, tax charges, demands and losses whatsoever that Embark suffers or incurs in performing its duties under these Pension Terms or carrying out our lawful duties and responsibilities in relation to you, except as a direct result of our negligence, wilful default or fraud.
23.4 Embark is responsible for operating and administering the Wealthsimple Pension Plan in accordance with these Pension Terms and your instructions given under the Pension Terms. Embark and the Independent Trustee are not responsible for selecting investments, monitoring investments or investment performance.
23.5 Other than as a direct result of our negligence, wilful default or fraud, neither Embark nor the Independent Trustee accept any liability or obligation for any or all losses, costs, actions, proceedings, claims and demands arising directly or indirectly that are incurred by, or brought or made against Embark or the Independent Trustee:
(a) if Embark or the Independent Trustee acted in good faith in accordance with any instruction (relating to benefit options, benefit nominations and investment directions) that reasonably appears to have been given by you.
(b) as a result of having acted in good faith on the instruction of a legally authorised party acting on your behalf, including if Embark has received medical advice (commissioned by and addressed to us) that you are unable to act due to serious ill-health, physical or mental incapacity;
(c) as a result of any error by you, or your representatives or agents;
(d) as a result of any instruction or investment direction sent by you, or your representatives or agents, or any third parties who may hold or manage or advice on investments, not being received by Embark;
(e) for any failure or delay in implementing any instruction or investment direction which is caused by circumstances beyond our reasonable control, including but not limited to acts of God, fires, strikes, terrorism, power failures, intervention by exchanges or regulators, court orders, failure or error of any equipment, telecommunications, intermediary, exchange, counterparty product provider or bank; and
(f) default or any losses whatsoever caused by any third parties, nominees, other custodians, banks or authorised institutions which hold any assets including, but not limited to, insurance company unit linked funds, stocks and shares, unit trusts, Open-Ended Investment Companies (OEICs) and investment trust companies and cash for the purpose of your plan.
Definitions - Schedule 9
“Arrangement” has the meaning given by the Finance Act and refers to each arrangement a Member has made with Embark for the provision of Benefits under the scheme and for the purposes of which Embark hold sums and assets relating to the member.
“Beneficiary” means any of an individual’s Dependants, Nominees or Successors in receipt of benefits from the scheme.
“Beneficiary Pension” means taking an income directly from your Individual Fund. The part of your Individual Fund designated as available for paying drawdown pension remains invested so its value can go up and down.
“Dependant” means, in relation to a member, a person falling within one of the following categories at the date of their death:
the Member’s wife, husband or civil partner;
In the context of dependant’s drawdown only, any child of the Member who reached their 23rd birthday after 15th September 2016;
in all other contexts, any child of the Member who has not reached the age of 23 and any child of the Member who has reached the age of 23 and in our opinion is dependent on the member because of physical or mental impairment; or
any other individual who in Embark’s opinion is financially dependent on the Member, or who is in a mutually dependent financial relationship with the Member or is dependent on the Member because of physical or mental impairment.
“Designated Account” means the record of any cash held within the Wealthsimple Pension Plan bank account(s) attributable to contributions and transfer in payments made to your Individual Fund that is described in Section 11.1.
“Drawdown Pension” means taking an income directly from your individual fund. The part of your individual fund designated as available for paying drawdown pension remains invested so its value can go up and down. Please see section 17 for further details
“Embark Group” means Embark Services Limited, any of its direct or indirect subsidiaries, any direct or indirect holding company of Embark Services Limited, and any subsidiary of any such direct or indirect holding company. “Subsidiary” and “holding company” have the meanings given to them in Section 1159 of the Companies Act 2006.
“Finance Act” means the Finance Act 2004 as amended from time to time.
“HMRC” means Her Majesty’s Revenue & Customs.
“Independent Trustee” means Embark Trustees Limited or any successor appointed by Embark.
“Individual Fund” means the investments (including cash) of the scheme attributable to you under each arrangement having regard to
(for a Member only) contributions or (for a Beneficiary only) any amounts allocated to provide you with Drawdown Pension following the death of a Member and
transfer in payments paid by or in respect of you less any benefits and transfer-out payments paid to or in respect of you and any charges and fees that Embark deducts and any borrowing, adjusted to account for any growth or loss in the investments.
“Lifetime Annuity” means an annuity contract purchased from an insurance company, which provides an income for life.
“Member” means an individual whom Embark has accepted for membership of the Wealthsimple Pension Plan under section 5 and who has not subsequently left the scheme.
“Nominee” has the meaning given in Schedule 28 of the Finance Act, being an individual nominated by the Member or Embark to receive death benefits from an arrangement following the death of a Member, but who is not a Dependant of the member.
“Wealthsimple Pension Plan” means
(for a Member) the Arrangement or collection of Arrangements the Member has made with Embark under the scheme
(for a Beneficiary) the Arrangement or collection of Arrangements a Beneficiary makes with Embark for the provision of drawdown pension benefits and that is identified by the unique reference number shown in the scheme member schedule.
“Registered Pension Scheme” means a pension scheme registered under Part 4 of the Finance Act.
“Pension Rules” means the trust deed and rules that establish the scheme, as amended from time to time.
“Pension Plan Member Schedule” means the schedule Embark provides or make available to you from time to time, which sets out the specific details of how these Pension Terms apply to your plan, as amended from time to time.
“Successor” has the meaning given in Schedule 28 of the Finance Act, being an individual nominated by a Dependant, Nominee or Successor of a Member, or by Embark, to receive death benefits from an Arrangement following the death of a Dependant, Nominee or Successor.
“Unauthorised Payment” means an unauthorised payment (as de ned in Section 160(5) of the Finance Act), which attracts tax charges.
“Uncrystallised Fund” means, in relation to a member only, any part of your individual fund that has not been designated as available for paying drawdown pension or used to provide any other benefit.