gftc ira custodial agreement - Genworth Financial Wealth ...

Investor Information Booklet 

Version 2.4 - May 2010 

R278_DISCLBKLT-GFTC (2010/05) 

Genworth Financial Wealth Management, Inc.

Table of contents 

Table of Contents: 

GFWM Investment Management Services Agreement 

GFTC Custody Agreement 

GFTC IRA custodial Agreement / ira Disclosure statement 

GFWM/Gftc Privacy Policy 

GFWM Disclosure Brochure (Form adv - Schedule H)

GFWM Investment management 

services Agreement 

GFWM investment management services Agreement



Page 1 of 18 

This must remain with the Client 

By executing the Account Application, you, the Account Owner, (the “Client”) agree to the terms of this Investment Management Services 

Agreement (“Agreement” or “IMSA”). You agree to retain Genworth Financial Wealth Management, Inc. (“GFWM”) to provide investment 

advisory services to the “Account” you are establishing. You have been referred to GFWM by your Financial Advisor (“Financial Advisor,” who is 

associated with their “Financial Advisory Firm”). The responsibilities of GFWM, the Financial Advisor and the Client are discussed below. 

This Agreement may be used to open more than one Account, but the singular form will be used throughout this Agreement. 

Below, this Agreement describes: 

• the available Investment Solutions and the options available in each; 

• the Fees applicable to the Account; 

• GFWM’s Responsibilities as the investment adviser to the Account; 

• the Financial Advisor’s Responsibilities; and 

• the Client’s Agreements, Authorizations and Acknowledgements. 

Investment Solutions 

For each Account established pursuant to this Agreement, the Client, with the assistance of their Financial Advisor, shall select the advisory 

service and investment objective to be provided to the Account by specifying a “Strategy” for the Account. 

In specifying the Strategy for the Account, the Client will generally choose from among available “Risk/Return Profiles,” described later in this 

Agreement. 

The Client may also generally choose from four “Asset Allocation Approaches,” described later in this Agreement. 

Depending on the Asset Allocation Approach selected, one or more of the following “Investment Solutions,” described later in this Agreement, are 

available: 

• Mutual Fund accounts; 

• Exchange Traded Fund (“ETF”) accounts; 

• Variable Annuity accounts; 

• Privately Managed Accounts (“PMA”); and 

• Unified Managed Accounts (“UMA”) 

Within these Investment Solutions, the Client may also choose among available “Portfolio Strategists” and “Mandates” to customize the Strategy 

for their Account. 

Additionally, the Client may establish an “Administrative/Non-Managed Account” to hold “non-managed” assets that will not be managed or 

advised by GFWM. 

Not all Investment Solutions may be offered at your selected Custodian. 

Risk/Return Profiles 

The Client, with the assistance of their Financial Advisor, may select a Risk/Return Profile for the Account. The following six Risk/Return Profiles 

are available. Some Risk/Return Profiles may not be available in some Asset Allocation Approaches. Some Investment Solutions, i.e., Individually 

Managed Accounts and Manager Select Accounts, are not categorized into any one of these Risk/Return Profiles. 

• Profile 1 – Conservative 

The profile is designed for an investor who wants to focus on preservation of capital as a primary goal and wishes to avoid downside risk. 

• Profile 2 – Moderate Conservative 

The profile is designed for an investor who seeks to preserve capital but wishes to earn a return sufficient to preserve purchasing power. 

• Profile 3 –Moderate 

The profile is designed for an investor who seeks to balance downside risks to capital and capital appreciation. 

• Profile 4 – Moderate Growth 

The profile is designed for an investor who seeks enhanced capital appreciation but is willing to accept greater risk of downside loss and 

volatility of returns. 

• Profile 5 – Growth 

The profile is designed for an investor who seeks significant capital appreciation and is tolerant of the risk of downside loss and volatility of 

returns. 

• Profile 6 – Maximum Growth 

The profile is designed for an investor who seeks the highest level of capital appreciation and is willing to accept the risk of downside loss and 

volatility of returns. 

Asset Allocation Approaches 

The Client, with the assistance of their Financial Advisor, may select an Asset Allocation Approach for the Account. The following four Asset 

Allocation Approaches are available. Some Investment Solutions, i.e., Individually Managed Accounts and Manager Select Accounts, are not 

categorized into any one of these approaches. 

Strategic Asset Allocation Approach 

• Seeks to optimize risk adjusted return while adhering to a base policy mix. 

• Relative market exposure will be primary determinant of return results. 

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Tactical Constrained Asset Allocation Approach 

• Seeks to optimize risk adjusted returns while adhering to a base policy mix and utilizing tactical deviations from the mix in efforts to add 

additional value. 

• Relative market exposure will be a significant determinant of return results with further impact being driven by tactical decision making. 

Tactical Unconstrained Asset Allocation Approach 

• Seeks to optimize risk adjusted returns without regard to a base policy mix. 

• Relative return exposure will vary over time and, as a result, the primary driver of returns will be the decisions made regarding the magnitude 

and types of asset class exposure taken over time. 

Absolute Return Allocation Approach 

• Seeks to capture modest positive returns over time regardless of general market direction while managing broad market risk and correlation. 

This objective may or may not be achieved in any specific time frame. 

• Return results will be driven by active investment decisions made with regard to specific asset class exposures and security selections. 

Mutual Fund, ETF and Variable Annuity Investment Solutions 

In the Mutual Fund Investment Solution, the Client may choose an Investment Solution that invests in shares of 1. the AssetMark Funds, advised 

by GFWM; or 2. third-party mutual funds, not advised by GFWM. 

In the ETF Investment Solution, GFWM invests the Account in Exchange Traded Funds (or “ETFs”). 

In the Variable Annuity Investment Solution, GFWM allocates Account assets among available variable annuity sub-accounts. 

Unless otherwise restricted by the Client and accepted by GFWM, if a Mutual Fund or ETF Investment Solution is chosen, the Account may also 

include non-mutual fund or non-ETF investments, as applicable. For example, in an ETF Investment Solution, non-ETF investments could be cash 

equivalents held by the Account. 

For a Mutual Fund or ETF Investment Solution, the Client, with the assistance of their Financial Advisor, shall select for their Account: 1. an Asset 

Allocation Approach 2. a Risk/Return Profile; 3. a Portfolio Strategist; and 4. a Mandate, from those available for the Investment Solution. 

For the Variable Annuity Investment Solution, the Client, with the assistance of their Financial Advisor, shall select for their Account: 1. a Risk/ 

Return Profile; and 2. a Portfolio Strategist, from those available for the Investment Solution. 

Portfolio Strategists 

GFWM’s investment of the Account shall be consistent with the Asset Allocation Approach and Risk/Return Profile, described earlier in this 

Agreement, selected by the Client. For the Mutual Fund and ETF Investment Solutions, GFWM has contracted with investment management firms 

(“Portfolio Strategists”), which GFWM may replace in its discretion, to provide asset allocations, consistent with the Asset Allocation Approach 

and Risk/Return Profile, by which GFWM intends to invest the Account, unless circumstances indicate that modified allocations or investments are 

appropriate. The Client may specify the initial Portfolio Strategist for the Account and will be given notice of any change to that Portfolio Strategist. 

Mandates 

For some, but not all, Mutual Fund and ETF Investment Solutions, the Client may select a Mandate for the Account. 

For some Mutual Fund Investment Solutions, the Client can select between the Tax-Sensitive and Standard Mandate, described in Section A, and / 

or one select one of the investment styles, described in Section B below. 

For some ETF Investment Solutions, the Client can choose between a Tax-Sensitive or Standard Mandate for the Account, as described in Section 

A below. 

There is no Mandate selection available for a Variable Annuity Investment Solutions. 

Section A: 

Tax-Sensitive –Tax-exempt fixed income investments, tax-managed equity investments, holding periods and turnover levels will be considered. 

There is no guarantee that this objective will be achieved. 

Standard – Consideration will generally not be given to tax-exempt investments or holding periods. 

Section B: 

Domestic - Strategy allocations are focused on U.S. asset classes. 

Global - Strategy allocations include a mix of U.S. and international asset classes. 

Hedged - Strategy allocations include a mix of U.S. and international asset classes. Implementation will include the use of specialty funds 

designed to have a low correlation to traditional asset classes such as stocks and bonds. 

R275_IMSA (2010/04)

Privately Managed Account Investment Solutions 


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Privately Managed Account (“PMA”) Investment Solutions include: 

• Individually Managed Accounts (“IMA”), 

• Manager Select Accounts (“MSA”), 

• GFAM Principal Return Exposure Strategy (“PRX”), 

• GFAM Preservation Strategy, 

• GFAM Fixed Income Accounts, and 

• Consolidated Managed Accounts (“CMA”). 

Individually Managed Account (“IMA”) 

For the IMA Investment Solution, GFWM has contracted with “third-party” “Investment Management Firms,” that are unaffiliated with GFWM, to 

act as “Investment Managers” for Client Accounts. The Investment Manager shall provide discretionary investment management services to the 

Account, and the Client grants the Investment Manager the authority to buy and sell securities and investments for the Account, to vote proxies 

for securities held by the Account and such other discretionary authorities described later in this Agreement. GFWM may replace the Investment 

Manager at its discretion. The Investment Manager of an IMA Investment Solution is also referred to as a “Discretionary Manager.” 

For an IMA Investment Solution, the Client, with the assistance of their Financial Advisor, shall select: 1. a Strategy, represented by an Investment 

Manager; and 2. in the case of a Fixed-Income Strategy, a Tax-Sensitive Mandate, described earlier in this Agreement. There are no Asset 

Allocation Approaches or separate Risk/Return Profiles available for an IMA Account. 

Manager Select Accounts (“MSA”) 

For the MSA Investment Solution, GFWM has contracted with an “Overlay Manager” to act as the Investment Manager (or Discretionary 

Manager) for Client Accounts. The Overlay Manager shall provide discretionary investment management services to the Account, and the Client 

grants the Overlay Manager the authority to buy and sell securities and investments for the Account, to vote proxies for securities held by the 

Account and such other discretionary authorities described later in this Agreement. GFWM has also contracted with an Investment Management 

Firm to provide recommendations for a specific asset class. The Overlay Manger shall generally invest the Account consistent with these 

recommendations unless circumstances indicate that modified allocations or investment are appropriate. GFWM may replace the Overlay Manager 

and Investment Manager Firm at its discretion. 

For an MSA Investment Solution, the Client, with the assistance of their Financial Advisor, shall select a Strategy, which shall be an asset class, 

represented by a single Investment Management Firm. There are no Asset Allocation Approaches or separate Risk/Return Profiles available for an 

MSA Account. 

GFAM Principal Return Exposure Strategy (“PRX”) 

For the PRX Investment Solution, the Genworth Financial Asset Management (“GFAM”) division of GFWM acts as the Investment Manager (or 

Discretionary Manager) for Client Accounts. GFAM shall provide discretionary investment management services to the Account, and the Client 

grants GFAM the authority to buy and sell securities and investments for the Account, to vote proxies for securities held by the Account (if 

applicable) and such other discretionary authorities described later in this Agreement. 

In the PRX Investment Solution, the Client need make no further selections, with the assistance of their Financial Advisor, to specify the Strategy 

for the Account. The PRX Strategy follows an Absolute Return Allocation Approach and is considered to be Risk/Return Profile 2. 

The PRX Strategy. The PRX Strategy invests in equity-linked certificates of deposit (“CDs”) issued by banking institutions, on a buy and hold 

basis, with the dual investment objectives of return of principal at the end of a stated time-horizon, which is generally expected to be five years 

for each CD, and receipt of income at the maturity of each CD purchased for a Client Account, such income to be in the form of some limited 

participation in the price return of an Equity Benchmark, not including dividends. The Equity Benchmark associated with each CD is expected to 

be a weighted combination of one or more price indices on major equity markets, domestic and/or international. While fixed for the term of each 

CD, the Equity Benchmark may differ amongst CDs purchased by GFAM for PRX Strategy Accounts. 

Important Investment Considerations 

• Money Market Fund Risk – During the time between when a PRX Account is initially funded by the Client and the Account invests in one or 

more CDs, the Account will be invested in a money market mutual fund or other cash equivalent. Money market mutual funds carry the risk 

that they will experience a decline in value. 

• Suitability Risk – The PRX Strategy will invest in CDs with a maturity which is anticipated to be five years for each CD at the time of initial 

acquisition. Withdrawals from a PRX Account before the maturity of the CD(s) held in the Account, if possible, may result in loss of principal 

and the Client may not recover the total initial investment. The PRX Strategy is not suitable for Clients with an investment time horizon of 

less than five years. The client further acknowledges that their time horizon for the assets being invested in this advisory service is 5 years or 

greater regardless of what may be indicated as a time-horizon for their overall investment plan. 

• Liquidity Risk – No income will be paid by the Account CDs during their term. If the Client asks for a withdrawal from the Account prior to 

the next available maturity of a CD, and presuming insufficient cash is available in the Account, GFAM will attempt to sell all or part of one or 

more CD(s) held by the Account at the prevailing price. Sale of an Account CD prior to maturity and payment of the withdrawal request to the 

Client may not be possible due to possible lack of a buyer for any of the CDs held in the Account or may be at a price significantly different 

than the price reflected on your Account Statement. The price received for a CD sold prior to maturity may be influenced by many factors, 

such as the term structure of interest rates, currency exchange rates, the volatility of the Equity Benchmark, the price level of the Equity 

Benchmark, the prevailing dividend rate related to the Equity Benchmark, the creditworthiness of the counterparty and, most importantly, 

the availability of a buyer at the time the Client wishes to redeem all or part of the Account. Depending on the impact of these factors, if 

withdrawals from the Account are made prior to the maturity of Account CD(s), the Client may receive significantly less than expected. 

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• Participation Rate – The Participation Rate is the rate in which a CD will participate in the price return of its Equity Benchmark. The 

Participation Rate will be determined at the time of issuance of the CD and is generally based on the term structure of interest rates, dividend 

rates and market volatility prevailing at the date of issue. GFAM does not currently plan to purchase CD(s) for PRX Strategy Accounts 

unless the Participation Rate is above 50% of the price return of the CD’s Equity Benchmark. The Account may invest in a CD with a lower 

Participation Rate than CD(s) purchased for other Accounts in the PRX Strategy at other points in time or previously purchased for the Client’s 

Account. Since the Participation Rate is a percentage of the price return of the Equity Benchmark, the Account will not fully participate in 

potential increases of the equity markets. 

• Interest Rate Risk – The overall return of the Account may be less than interest earned by non-indexed debt securities or bank deposits that 

pay interest at a prevailing market rates. 

• Market Risk – If, for the term of a CD, the price return of the Equity Benchmark is zero or negative, you will not receive any supplemental 

payment amount at maturity, regardless of the Participation Rate. In addition, the Equity Benchmark for any given CD may be comprised of 

two or more equity indices which may not be equally weighted. Declines in the level or price of one index may offset increases in the level or 

price of the other index(es). 

• Tax Treatment – If in a taxable account, all principal return and Equity Benchmark participation is expected to be treated as “ordinary income” 

for U.S. federal income tax purposes classification. Additionally, as principal accretion occurs during the life of the Account, interest income 

may be imputed to the Client and reported to the Internal Revenue Service by the Account Custodian (Form 1099 OID reported income). As 

such, the PRX Strategy may not be suitable for tax-sensitive clients. This information should not be interpreted as tax advice, as GFAM does 

not give tax advice. The Client should consult their tax advisor. 

• Counterparty Risk – The equity-linked CD is a bank product and may be covered by FDIC insurance, at the terms applicable at the time of 

any insolvency event and only up to a certain dollar amount. FDIC insurance levels may change during the time the Account holds CD(s). 

Other Client deposits at the same banking institution may be aggregated with the CD held by the Account for purposes of applying the FDIC 

insurance maximum coverage, and the Client may be exposed to counterparty risk of the issuing bank. It is the Client’s responsibility to 

monitor their exposure to the FDIC maximum at each banking institution. 

Important Operational Considerations 

• Participation Rate – GFAM does not currently intend to invest the Account in a CD with a Participation Rate of less than 50%. If a CD is not 

purchased for the Account despite the availability of funds to do so, the Account will remain invested in a money market mutual fund or other 

cash equivalent until such time as the market conditions allow for, and GFAM is able to purchase, a CD with greater than a 50% Participation 

Rate. Therefore, the Account may remain invested in a money market mutual fund or cash equivalent for long periods of time. During this 

period, Account Fees will be charged. 

• Timing of Account Funding – The transfer of assets from other financial institutions to the Account Custodian will take time. The Account 

will only be invested in a CD if at least 90% of the Initial Investment Amount (identified above) and a minimum of $50,000 has funded the 

Account. Until then, the Account will remain invested in a money market mutual fund or other cash equivalent. Account Fees will be charged. 

• Value of Account Funding – The Account minimum for the PRX Strategy is $50,000. If the value of the Account falls below $50,000 before 

a CD has been purchased, the Account may not be invested in a CD. If the Account is not invested in a CD, it will remain invested in a money 

market mutual fund or other cash equivalent. Account Fees will be charged. 

GFAM Preservation Strategy 

For the GFAM Preservation Strategy Investment Solution, the GFAM division of GFWM acts as Investment Manager, also referred to as a 

Discretionary Manager, for Client Accounts. GFAM shall provide discretionary investment management services to the Account, and the Client 

grants GFAM the authority to buy and sell securities and investments for the Account, to vote proxies for securities held by the Account and such 

other discretionary authorities described later in this Agreement. 

In the GFAM Preservation Strategy Investment Solution, the Client need make no further selections, with the assistance of their Financial Advisor, 

to specify the Strategy for the Account. The GFAM Preservation Strategy follows an Absolute Return Allocation Approach and is considered to be 

Risk/Return Profile 1. 

The primary investment objective of the Preservation Strategy is to avoid losses, measured over the calendar year. Intra-year volatility is not 

managed. The secondary objective is to maximize total return over the long term with no preference to income. The Account will be invested 

primarily in mutual funds. 

This strategy may invest in, among other things, “opportunistic” or “specialized” asset categories, which may include real estate, commodities, 

precious metals, energy and other less traditional asset classes, with no geographic restrictions, and the Genworth Financial Contra Fund, which 

is advised by GFWM. The Contra Fund seeks to provide protection against declines in the broad based equity markets, and it generally invests in 

options on stock indices. 

GFAM Fixed Income Accounts 

For the GFAM Fixed Income Accounts Investment Solution, the GFAM division of GFWM acts as Investment Manager, also referred to as a 

Discretionary Manager, for Client Accounts. GFAM shall provide discretionary investment management services to the Account, and the Client 


other discretionary authorities described later in this Agreement. 

For a GFAM Fixed Income Account Investment Solution, the Client, with the assistance of their Financial Advisor, shall select a Mandate for the 

management of their account. There are no Asset Allocation Approaches or separate Risk/Return Profiles available for a GFAM Fixed Income 

Account. 

Mandates 

The available mandates for the GFAM Fixed Income Accounts are as follows: 

Laddered Bonds - These Strategies invest the Account in either U.S. Treasury, U.S. Agency, or U.S. Treasury Inflation Protected bonds, with an 

intermediate effective duration, on a buy and hold basis. 

Municipal, Duration-based and the High Yield - These Strategies invest the Account in closed-end funds, exchange traded funds or mutual 

funds to obtain relevant exposure specific to desired asset categories. 

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Consolidated Managed Accounts (“CMA”) 

For the CMA Investment Solution, GFWM has contracted with an “Overlay Manager” to act as the Investment Manager (or Discretionary 

Manager) for Client Accounts. The Overlay Manager shall provide discretionary investment management services to the Account, and the Client 

grants the Overlay Manager the authority to buy and sell securities and investments for the Account, to vote proxies for securities held by the 

Account and such other discretionary authorities described later in this Agreement. GFWM has also contracted with a number of Investment 

Management Firms to provide recommendations for specific asset classes. The Overlay Manger shall generally invest the Account consistent 

with these recommendations unless circumstances indicate that modified allocations or investments are appropriate. Investments may also 

include pooled investment vehicles advised by GFWM, including the AssetMark Funds. GFWM may replace the Overlay Manager and Investment 

Manager Firm at its discretion. 

For the CMA Investment Solution, the Client, with the assistance of their Financial Advisor, shall select for their account: 1. the Asset Allocation 

Approach 2. a Risk/Return Profile; 3. a Portfolio Strategist, and 4. a Mandate, from those available for the Investment Solution. 


GFWM’s investment of the Account shall be consistent with the Asset Allocation Approach and Risk/Return Profile, described earlier in this 

Agreement, selected by the Client. For the CMA Investment Solution, GFWM has contracted with investment management firms (“Portfolio 

Strategists”), which GFWM may replace in its discretion, to provide asset allocations, consistent with the Asset Allocation Approach and 

Risk/Return Profile, by which the Overlay Manager intends to invest the Account, unless circumstances indicate that modified allocations or 

investments are appropriate. The Client may specify the initial Portfolio Strategist for the Account and will be given notice of any change to that 

Portfolio Strategist. 

Mandates 

Additionally, with the assistance of their Financial Advisor, the Client shall select a Mandate for their CMA Account. The Client should choose 

between Tax-Sensitive or Standard, described in Section A below, and then further refine the Account’s Mandate by selecting one of the 

investment styles described in Section B below. 

Section A: 

Tax-Sensitive – Tax-exempt fixed income investments, tax-managed equity investments, holding periods and turnover levels will be considered. 

There is no guarantee that this objective will be achieved. 

Standard – Consideration will generally not be given to tax-exempt investments or holding periods. 

Section B: 

Hedged – Strategy allocations include a mix of U.S. and international asset classes. Implementation will include the use of specialty funds 

designed to have a low correlation to traditional asset classes such as stocks and bonds. 

Core-Satellite – Strategy allocations include a mix of U.S. and international asset classes. The U.S. Large Cap equity allocation will be focused 

on a broad domestic index objective. 

Unified Managed Accounts Investment Solutions - GMS, ARO and PMP 

The Unified Managed Account (“UMA”) Investment Solutions includes: 

• Genworth Multiple Strategies (“GMS”), 

• Active Return Opportunities (“ARO”), and 

• Privately Managed Portfolios (“PMP”) accounts. 

GFWM manages UMA Accounts through its GFAM division. GFAM serves as Overlay Manager and may also be referred to as Discretionary 

Manager. 

In an UMA Investment Solution, the Client authorizes GFAM to provide discretionary investment management services to the Account. The Client 


other discretionary authorities described later in this Agreement. GFAM may select securities for the Account, consistent with recommendations 

provided to GFAM by Investment Management Firms. GFAM may invest the Account in direct securities, pooled investment vehicles, such as 

closed-end funds, mutual funds or ETFs, or in other securities or investments. The mutual fund investment may include the Genworth Financial 

Contra Fund, which is advised by GFWM. The Contra Fund seeks to provide protection against declines in the broad based equity markets, and it 

generally invests in options on stock indices. 

Genworth Multiple Strategy Portfolios Service (“GMS”) 

GFAM will generally not adjust the holdings in a GMS Account on an ongoing basis. Instead, unless a security exceeds a threshold decline 

determined by GFAM in its sole discretion, GFAM will generally only sell or readjust Account holdings after a one-year holding period. However, 

since the one-year holding period is generally applied with regard to all Accounts in the GMS Investment Solution, the Account may not experience 

a one-year holding period on assets in the first and last year of the Account or if withdrawals or contributions are made to the Account. 

The GMS Investment Solution follows the Tactical Constrained Asset Allocation Approach. For a GMS Investment Solution, the Client, with the 

assistance of their Financial Advisor, shall select for their Account: 1. a Risk/Return Profile, 2. the type of risk management strategy; and 3.a 

Mandate, from those available for the Investment Solution. Only Profiles numbered three (3) through six (6), that is Moderate, Moderate Growth, 

Growth, and Maximum Growth, are available for a GMS Account. 

Risk Management Strategies 

When selecting a Risk/Return Profile for a GMS Account, the Client, with the assistance of their Financial Advisor, shall also specify whether the 

risk management strategy should be implemented through: 1. the use of fixed income investments, or 2. the use of GFAM’s Actively Managed 

Protection Service, described in Exhibit B to this Agreement. 

R275_IMSA (2010/04)

Mandates 

The Client may choose between the following Mandates for a GMS Account. 


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High Dividend – The Account will primarily be exposed to large capitalized U.S. companies, with possible significant allocations of exposure to 

real estate and high dividend paying stocks. 

Global – The Account will primarily be exposed to international securities (including emerging markets), with allocations that also include 

exposure to large and small capitalized U.S. companies. 

Opportunistic * – The Account will primarily be exposed to stocks of companies domiciled in the U.S. and other developed countries, with 

allocations that also include exposure to real estate and high dividend paying stocks. The Account may also invest in one or more specialized 

asset categories, including, but not limited to, commodities, market neutral strategies, emerging markets, international small-capitalized 

companies and global bonds. 

*The Opportunistic Mandate may include investment in the Genworth Financial Contra Fund, which is advised by GFWM. The Contra Fund seeks 

to provide protection against declines in the broad based equity markets, and it generally invests in options on stock indices. 

Active Return Opportunities (“ARO”) 

GFAM will generally adjust the holdings in an ARO Account on an ongoing basis. If the Account is identified as a taxable account, the Account 

will be managed with a loss-harvesting objective and, at GFAM’s sole discretion, Account assets may be sold to realize capital losses. With the 

ARO Investment Solution, GFAM will determine, in its sole discretion, whether to use fixed income, the Genworth Financial Contra Fund or other 

strategies, in implementing the selected Risk/Return Profile. 

The ARO Investment Solution follows the Tactical Unconstrained Asset Allocation Approach. For a ARO Investment Solution, the Client, with 

the assistance of their Financial Advisor, shall select for their Account: 1. a Risk/Return Profile, 2. an Account size; and 3.a Mandate, from those 

available for the Investment Solution. 

Account Minimums 

The Client should choose an Account Minimum. The Account Minimum will influence the type of investments that GFAM will select for the 

Account. Accounts with smaller minimums will generally hold a higher percentage of pooled investment vehicles as compared to individual 

securities. The following four Account Minimums are available: 

ARO–50 – minimum account size of $50,000 




Once an Account Minimum is selected, the Account will remain invested in investments selected for that minimum, even if the Account’s value is 

more than the next Account Minimum, unless a written request is received to change the Account’s selected Account Minimum. 

Mandates 

The Client may choose between the following Mandates for an ARO Account. All of these Mandates allow for the Account to invest in 

“opportunistic” or “specialized” asset categories, which may include, among other things, real estate, commodities, precious metals, energy and 

other less traditional asset classes, with no geographic restrictions, and the Genworth Financial Contra Fund. The Contra Fund, which is advised by 

GFWM, seeks to provide protection against declines in the broad based equity markets, and it generally invests in options on stock indices 

Domestic – The Account will be exposed to equities and fixed income instruments of companies domiciled in the United States. Any exposure 

to ultra high quality, large cap growth assets may not be limited to U.S. companies. The Account investments will focus on total return with no 

preference to income generation. 

Global – The Account may be exposed to domestic and international equities and fixed income instruments. The Account investments will 

focus on total return with no preference to income generation. 

High Current Income –The Account may be exposed to domestic and international equities and fixed income instruments. The focus of the 

total return of Account investments will be on current income as opposed to capital appreciation. Current income is defined as dividends, 

interest and option premiums. 

Privately Managed Portfolios ("PMP”) 

GFAM will generally adjust the holdings in a PMP Account on an ongoing basis. 

The PMP Investment Solution follows the Tactical Constrained Asset Allocation Approach. For a PMP Investment Solution, the Client, with the 

assistance of their Financial Advisor, shall select for their Account: 1. a Risk/Return Profile, 2. the type of risk management strategy; and 3.a 

Mandate, from those available for the Investment Solution. 

Risk/Return Management Strategies 

When selecting a Risk/Return Profile for a PMP Account, the Client, with the assistance of their Financial Advisor, shall also specify whether the 

risk management strategy should be implemented through: 1. the use of fixed income strategies, or 2. the use of GFAM’s Actively Managed 

Protection Service, described in Exhibit B to this Agreement. Only Profiles numbered three (3) through six (6), that is Moderate, Moderate Growth, 

Growth, and Maximum Growth, are available for a PMP Account. 

R275_IMSA (2010/04)

Mandates 

The Client may choose between the following Mandates for a PMP Account. 


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Diversified U.S. – The Account will primarily be exposed to large, mid and small capitalized companies domiciled in the United States. 

Diversified Global – The Account will primarily be exposed to large, mid and small capitalized companies domiciled in the United States and 

other developed countries, with possible significant allocations of exposure to real estate and high dividend paying stocks. 

High Dividend Global * – The Account will primarily be exposed to large, mid and small capitalized companies domiciled in the United States 

and other developed countries, with possible significant allocations of exposure to real estate and high dividend paying stocks. The Account 

may also invest, at a conservative level, in one or more specialized asset categories, including, but not limited to, commodities, market neutral 

strategies, emerging markets, international small-capitalized companies and global bonds. 

Blended Opportunistic * – The Account will primarily be exposed to large, mid and small capitalized companies domiciled in the United States 

and other developed countries, with possible allocations of exposure to U.S. companies operating in the real estate industry and stocks that 

currently pay high dividend. The Account may also invest, at a moderate level, in one or more specialized asset categories, including, but not 

limited to, commodities, market neutral strategies, emerging markets, international small-capitalized companies and global bonds. 

High Dividend Opportunistic * – The Account will primarily be exposed to large capitalized companies domiciled in the United States paying 

high current dividends. The Account may also invest, at a moderate level, in one or more specialized asset categories, including, but not limited 

to, commodities, market neutral strategies, emerging markets, international small-capitalized companies and global bonds. 

Diversified Opportunistic * – The Account will primarily be exposed to large, mid and small capitalized companies domiciled in the United 

States and other developed countries, with possible allocations of exposure to U.S. companies operating in the real estate industry and stocks 

that currently pay high dividend. The Account may also invest, at a moderate level, in one or more specialized asset categories, including, but 

not limited to market commodities, market neutral strategies, emerging markets, international small-capitalized companies and global bonds. 

*The Opportunistic and High Dividend Mandates and specialized asset category investments may include investment in the Genworth Financial 

Contra Fund, which is advised by GFWM. The Contra Fund seeks to provide protection against declines in the broad based equity markets, and it 

generally invests in options on stock indices. 

Fees 

The fees applicable to the Account under this Agreement are: 

1. Initial Consulting Fees; 

2. Account Fees – comprised of the Client Fee plus, if applicable, the Investment Manager Fee(s); 

3. Administrative Fees – if applicable; and 

4. Other Fees and Expenses, such as Special Request Services Fees, if applicable. 

Unless other arrangements are made, the Custodian shall debit these fees from the Account. 

Initial Consulting Fees – basis point fees on deposits 

An Initial Consulting Fee (“ICF”) of up to one percent (1.00%) of any cash deposit or in-kind investment transfer of $2,000 or more to the Account 

may be assessed and paid to the Financial Advisory Firm. The Client and Financial Advisor shall agree to the amount of the ICF, if any. The fee is 

assessed at the time of deposit. 

Account Fees – basis point fees on assets 

The Account Fee consists of the Client Fee plus, if the Account is invested in certain IMA or UMA Investment Solutions, the applicable Investment 

Manager Fee. 

The Client Fee consists of the Financial Advisor Fee plus the GFWM Advisory Fee. 

Each of the Financial Advisor Fee, GFWM Advisory Fee and, if applicable, the Investment Manager Fee shall be calculated on a “tiered” basis 

with the assets on the lowest asset value tier receiving the highest percentage rate fee and only assets over the value level for the higher tiers 

receiving the lower percentage rates fees. 

Account Fees shall be payable quarterly, in advance, for the upcoming calendar quarter, at the annual rates provided below. 

For the initial deposit to the Account and for any subsequent, additional deposits to the Account, the Account Fee for that deposit shall be payable 

upon deposit and shall be equal to the amount of the deposit multiplied by one quarter (25%) of the applicable annual rate. 

For assets invested in the Account throughout the full, preceding quarter, including as of the last day of the preceding quarter, the Account Fee 

shall be calculated on the average daily value of all such Account assets, multiplied by one quarter (25%) of the applicable annual rate. 

Upon termination of the Account, prepaid Account Fees shall be refunded pro-rata. 

R275_IMSA (2010/04)

Financial Advisor Fee 


Page 8 of 18 


The Financial Advisor (“FA”) and Client shall select an annual rate for the Financial Advisor Fee, which is paid to the Financial Advisory Firm, by 

choosing: 

1. A Negotiated Rate -- a rate between and including 0 to 1.35% (135 basis points), as negotiated and agreed between the Client and the 

Financial Advisor; or 

2. The Standard Financial Advisor Fee Rate -- the rate specified below for the Account’s Investment Solution. 

For Category I Investment Solutions (for all Investment Solutions, except for those listed as Category II below): 

Assets Under Management 

Standard Financial Advisor Fee Rate 

First $500,000 1.00% 

$500,000 – $1 million 0.80% 

$1 million – $5 million 0.50% 

Over $5 million 0.30% 

For Category II Investment Solutions (for Accounts investing 100% in Fixed Income, i.e. GFAM Principal Return Exposure Strategy and GFAM 

Fixed Income): 

Assets Under Management 

Standard Financial Advisor Fee Rate 

First $500,000 0.50% 

$500,000 – $1 million 0.50% 



In addition to the rates described in the above tables, an additional fee of up to 0.10% annually may be deducted from Client Account assets and 

paid certain Financial Advisory Firms, if the Account is invested in a Mutual Fund, ETF, Variable Annuity, IMA or CMA Investment Solution. 

GFWM Advisory Fee 

The GFWM Advisory Fee subject to a minimum fee, shall be charged at the rates listed below. 

Mutual Fund, ETFs & Variable Accounts 

Account Asset Level 

AssetMark Mutual 

Funds 

Third Party Mutual 

Funds 

ETF Accounts 

Strategic 

& Tactical 

Constrained 

ETF Accounts 

Tactical 

Unconstrained 

Variable Annuity 

Accounts 

First $ 250,000 0.00% 0.45% 0.45% 0.65% 0.65% 

$ 250,000 - $ 500,000 0.00% 0.40% 0.45% 0.60% 0.60% 

$ 500,000 - $ 1,000,000 0 0.00% 0.35% 0.45% 0.55% 0.55% 

$ 1,000,000 - $ 2,000,000 0.00% 0.30% 0.40% 0.50% 0.50% 

$ 2,000,000 - $3,000,000 0.00% 0.20% 0.40% 0.40% 0.40% 

$ 3,000,000 - $ 5,000,000 0.00% 0.20% 0.35% 0.40% 0.40% 

Over $ 5,000,000 0.00% 0.20% 0.25% 0.40% 0.40% 

Privately Managed Accounts 


IMA 

GFAM Preservation 

Strategy 

GFAM Fixed Income 

& PRX 

CMA 1 

Manager Select 

First $ 250,000 0.45% 0.75% 0.45% 0.80% 0.90% 

$ 250,000 - $ 500,000 0.45% 0.50% 0.45% 0.80% 0.90% 

$ 500,000 - $ 1,000,000 0 0.45% 0.50% 0.35% 0.80% 0.90% 

$ 1,000,000 - $ 2,000,000 0.40% 0.45% 0.25% 0.75% 0.85% 

$ 2,000,000 - $3,000,000 0.40% 0.45% 0.25% 0.75% 0.85% 

$ 3,000,000 - $ 5,000,000 0.35% 0.40% 0.25% 0.70% 0.80% 

Over $ 5,000,000 0.25% 0.30% 0.20% 0.65% 0.75% 

R275_IMSA (2010/04)


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UMA Accounts 

Account Asset Level GMS I GMS II ARO 50 ARO 100 

ARO 250 ARO 

500 

PMP II 

PMP I 

First $ 100,000 0.75% 0.40% 0.75% 0.65% 0.85% 0.45% 

$ 100,000 - $ 250,000 0.55% 0.25% 0.75% 0.65% 0.85% 0.45% 

$ 250,000 - $ 500,000 0.45% 0.20% 0.45% 0.45% 0.85% 0.45% 

$ 500,000 - $ 1,000,000 0 0.40% 0.15% 0.40% 0.40% 0.70% 0.35% 

$ 1,000,000 - $ 2,000,000 0.40% 0.10% 0.40% 0.40% 0.47% 0.15% 

$ 2,000,000 - $3,000,000 0.40% 0.10% 0.40% 0.40% 0.47% 0.15% 

$ 3,000,000 - $ 5,000,000 0.40% 0.10% 0.40% 0.40% 0.47% 0.15% 

Over $ 5,000,000 0.25% 0.00% 0.25% 0.25% 0.25% 0.00% 

GFWM Minimum Advisory Fee 

If on any given quarterly billing cycle, the GFWM Advisory Fee is less than the stated GFWM Minimum Advisory Fee shown below, then the 

applicable minimum fee will be charged to the Account. This minimum fee does not apply to accounts custodied at GFTC. 


Investment Solution 

Pershing and 

TD Ameritrade 


Funds 


Funds 

AssetMark Funds 

Distribution Strategies 


Funds and ETF 


ETF Accounts 

Strategic 

& Tactical Constrained 

ETF Accounts 

Tactical Unconstrained 

$25 $45 $112 $225 $90 $130 


Investment Solution Third-Party IMA GFAM Preservation GFAM PRX CMA Manager Select 

Pershing and 

TD Ameritrade 

$90 $45 $45 $800 $180 

Unified Managed Accounts 

Investment Solution ARO 50 ARO 100 ARO 250 ARO 500 

Pershing and 

TD Ameritrade 

$75 $130 $425 $850 

Investment Manager Fee 

For IMA and UMA Investment Solutions, an Investment Manager Fee is payable to the Account’s Discretionary Manager. Each IMA and UMA 

Discretionary Manager has established an independent fee schedule for the applicable IMA or UMA Strategy. These fees are payable on Account 

assets at the following annual rates. 

ING Investment Management – 0.30% (30 basis points). 

Nuveen Asset Management – 0.35% (35 basis points); fees may be negotiated on Accounts over $20 million. 

Parametric Portfolio Associates – 0.35% (35 basis points). 

Rochdale Investment Management – 0.60% (60 basis points); fees may be negotiated. 

GFAM – UMA Accounts, including GMS, ARO and PMP – 0.60% (60 basis points). 

No Investment Manager Fee is payable for the Manager Select Account, GFAM Privately Managed Accounts (GFAM PRX, GFAM Preservation 

Strategy, GFAM Fixed Income) or CMA Investment Solutions. 

Administrative Fee for Administrative/Non-Managed Accounts 

The Client may establish an “Administrative/Non-Managed Account” to hold “non-managed” assets, and such Account may include a Cash 

Alternative Account or General Securities Account. 

An Administrative/Non-Managed Account is provided as an administrative convenience for the Client. Assets in an Administrative/Non-Managed 

Account are not managed or advised by GFWM, and GFWM is not responsible for their investment or management. However, the assets of an 

Administrative/Non-Managed Account will be included in periodic GFWM reports to the Client. The Client will be solely responsible for directing 

the investments in the Administrative/Non-Managed Account. Administrative/Non-Managed Account assets are subject to the terms of the 

Client’s agreement with their selected Custodian. 

Cash Alternative Account 

In the Cash Alternative Account, the Client may select among options available at their selected Custodian, which may include investments in a 

Money Market Fund or the Custodian’s cash sweep vehicle. 

General Securities Account 

In the General Securities Account, the Client may move to the Account those equity or fixed-income securities acceptable to their selected 

Custodian. No securities may be purchased in this Account. The Client will be solely responsible for directing the sale of investments in the 

R275_IMSA (2010/04)


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Account. Administrative Fees will generally not be charged against the assets of a General Securities Account, but any Administrative Fee or other 

fees payable will be charged to another Account established under this Agreement or directly to a bank account via the Automated Clearing House 

(ACH) process. 

Cash Alternative and General Securities Accounts will be charged the following Administrative Fee. 

Administrative Fee for Administrative/ Non-Managed Accounts 


Cash Alternative and 

General Securities Accounts 

First $250,000 0.25% 

$250,000 – $500,000 0.15% 

Over $500,000 0.10% 

The applicable quarterly minimum fee for Administrative and Non-Managed Accounts are shown below. 

Investment Solution General Securities Cash Alternative 

Pershing and 

TD Ameritrade 

Other Fees and Expenses 

$12.50 $25 

Special Request Service Fees. Service fees incurred as a result of special requests, such as wiring funds or overnight delivery, shall be charged 

to the Client's account unless waived by GFWM, as applicable. 

Indirect Investment Expenses and Fees from Pooled Investments. Mutual funds, variable annuity sub-accounts, ETFs, Certificates of 

Deposits and other pooled investment vehicles bear their own operating expenses, including compensation paid to their advisers and other 

services providers as well as other expenses and fees. An Account with assets invested in these funds, accounts or vehicles will indirectly pay its 

share of the compensation and fees paid by the fund, sub-account or investment instrument, in addition to the fees paid to GFWM. Included in the 

mutual funds may be the AssetMark Funds and/or the Genworth Financial Contra Fund; in which case, GFWM may receive management fees for 

both its management of the AssetMark Funds and Contra Fund and of your Account. 

Certain mutual funds in which Client assets are invested, or service providers to these funds, pay fees to GFWM or its affiliates for services 

provided. While GFWM does not invest Client assets in funds that impose front-end or deferred sales charges or “loads” on the purchase or sale 

of fund shares, Client assets may be invested in funds that pay “12b-1 fees," which are fees paid based on fund assets. Additionally, some funds 

may assess redemption fees, in which case, the Account may be assessed these fees. 

The Account may also incur expenses related to the custody of foreign securities, including fees from paying agents of the issuers of foreign 

securities, such as American Depository Receipts (e.g., “ADR Fees”). ADR Fees may appear as a separate fee on Account Statements. The 

Account may also incur fees for equity transactions known as “SEC fees” or “Section 31 fees.” These transactions fees are paid by self-regulatory 

organizations to the U. S. Securities and Exchange Commission to pay the costs incurred by the government in supervising and regulating the 

securities markets and securities professionals, and broker-dealers, in turn, recover these costs from customers. 

IRA and ERISA Account Fee. GFWM or its affiliates, including Custodian GFTC, may receive fees for advisory, administrative or other services 

from mutual funds, or their service providers, whose shares may be held by the Account, from banks which may hold deposits of Account assets 

or from other financial services providers. In the case of IRA and ERISA accounts, such “service fee” income will offset an “IRA & ERISA Account 

Fee” otherwise chargeable to the Account by GFTC for the additional custodial and other services provided by GFTC to IRA and ERISA accounts. 

This fee is discussed further in the ERISA and IRA Supplement contained in Exhibit A to this Agreement. 

Fees under Custody Agreement. Additional fees may be due pursuant to the Client’s separate Custody Agreement with the Account Custodian. 

If the Client selects a Custodian other than GFTC, GFWM will provide the Custodian certain services with respect to the custody arrangement and 

the Custodian will remit a portion of the fee it charges the Client to GFWM. 

Genworth Financial Wealth Management's Responsibilities, as Investment Adviser to the Account 

Advisory services. GFWM shall provide investment advisory services to the Account consistent with the Strategy specified by the Client for the 

selected Investment Solution and compliant with any reasonable restrictions specified by the Client and accepted by GFWM. Descriptions of the 

advisory services to be provided and the Investment Solutions available under this Agreement are provided in this Agreement. Advisory services 

do not include Administrative/Non-Managed Accounts. 

Disclosures. GFWM shall provide the Client, either directly or through the Financial Advisor, with disclosure of material information regarding the 

investment advisory services to be provided under this Agreement, which may include, without limitation, GFWM's Disclosure Brochure. 

Account statements. GFWM shall provide Client access to one or more qualified custodians. The custodian selected by Client shall send Client 

periodic Account Statements, no less often than quarterly, which shall include valuations of Account assets and summaries of transactions. These 

Account Statements may be delivered via hard copy or by electronic delivery, if elected by the Client. 

Consultations. GFWM shall make personnel, knowledgeable about the management of the Client's Account, available to the Client and the 

Financial Advisor during normal business hours for consultation regarding such management. 

Client rights regarding securities. Upon written request from the Client, GFWM shall permit the Client the right to vote the securities in the 

Account, to impose reasonable restrictions on the securities or the types of securities that may be purchased for the Account and to withdraw 

securities from the Account, as may be limited by the issuer of the security. 

R275_IMSA (2010/04)

The Financial Advisor's Responsibilities 


Page 11 of 18 


Suitability. Before referring the Client to GFWM for the selected Investment Solution and Strategy, the Financial Advisor shall obtain information 

from the Client regarding the Client's financial situation, investment objective and any reasonable restrictions the Client wishes to place on the 

investment of the Account, and shall conduct an analysis and make a determination of the suitability of the services to be provided under this 

Agreement for the Client. 

Disclosure documents. Financial Advisor shall provide the Client with disclosure documents provided by GFWM for delivery to Clients, which 

may include, without limitation, GFWM's Disclosure Brochure, GFWM's Privacy Policy, a completed Financial Advisor’s Separate Written 

Disclosure Statement, and any required disclosure documents regarding their own firm. 

Account application, forms and Client instructions. The Financial Advisor shall assist the Client with the Account Application and any other 

applicable forms, exercising best efforts to ensure that they are true and accurate, shall submit such forms to GFWM and shall participate in the 

correction or gathering of any additional information as may be requested. The Financial Advisor shall notify GFWM of any changes in the Client 

information provided to GFWM, and notice to GFTC shall be considered notice to GFWM. The Financial Advisor shall accurately relate appropriate 

Client instructions to GFWM. 

Annual and ongoing consultations. The Financial Advisor agrees to contact the Client at least annually to determine if the Client's financial 

situation, investment objective or Account restrictions, if any, have changed. The Financial Advisor also agrees to be available during normal 

business hours for consultation regarding the Client's financial condition, investment objective and the ongoing suitability of GFWM's services 

under this Agreement. 

Confidential Information. The Financial Advisor acknowledges that he may acquire confidential, non-public or proprietary information of the 

Client, GFWM or others, and the Financial Advisor agrees to keep this information confidential. 

ERISA plans. Financial Advisor agrees to inform GFWM in writing if the Client is subject to ERISA and to ensure that the Client has received the 

“GFWM ERISA and IRA Supplement" (Exhibit A to this Agreement). 

Compliance with Advisers Act. The Financial Advisor represents that, as a condition of referring Clients to GFWM and receiving referral fees, 

they, their firm and any persons referring Clients to GFWM on the firm's behalf, are and shall continue to be qualified to do so under applicable 

laws, including, without limitation, Rule 206(4)-3 of the Investment Advisers Act of 1940 (“Advisers Act”), and that they shall immediately notify 

GFWM if this qualification ceases. 

The Client's Agreements, Authorizations and Acknowledgements 

Establish Custodial Account. The Client shall establish a custodial account with Genworth Financial Trust Company (“GFTC”), an affiliate of 

GFWM, or such other custodian that may be agreed upon with GFWM (“Custodian,” which term shall include GFTC) for the custody of the 

Account assets. 

Client information. The Client shall provide the Financial Advisor with information regarding their financial situation and investment objective and 

shall inform the Financial Advisor of any material change to their financial situation or investment objective. The Client shall provide their Financial 

Advisor and GFWM with all information, and any changes to that information, required or appropriate to open and maintain the Account and 

provide the services contemplated by this Agreement. The Client authorizes the Financial Advisor and GFWM to provide information, including 

without limitation that regarding the Client and the Account, to those providing services related to the Account and this Agreement, including, 

without limitation, the Financial Advisor, the Financial Advisory Firm and any Discretionary Manager. 

Receipt of disclosure documents. Client hereby acknowledges receipt of, and their opportunity to review, this Agreement, GFWM's Disclosure 

Brochure (Schedule H of Form ADV), GFWM's Privacy Notice, the Financial Advisor’s Separate Written Disclosure Statement, and, if the Client is 

subject to ERISA, the ERISA Supplement to this Agreement. 

Authorization of Financial Advisor. The Client authorizes their Financial Advisor to submit the Account Application and other appropriate forms 

and deposits to the Account to GFWM and/or their selected Custodian. The Client shall review for accuracy any confirmations of information on 

deposits or withdrawals that they receive. 

By so specifying in the Account Set Up and Application, or other form acceptable to GFWM, the Client authorizes their Financial Advisor to give 

GFWM instructions: 

• To begin, change or terminate systematic withdrawals from the Account and to make withdrawals from the Account, with proceeds mailed 

to the Account’s address of record and payable to the Client or wired to an account in the Client’s name, as may be limited by Custodian’s 

policies and procedures. 

Additionally, by so specifying in the Account Set Up and Application, or other form acceptable to GFWM, the Client may also authorize their 

Financial Advisor to give GFWM instructions: 

• To make changes with regard to the management of the Account, including changes to the Investment Solution, the Strategy, including the 

employment of a hedging strategy, and any restrictions related to the Account and to harvest investment gains or losses from the Account; 

and 

• To transfer amounts or assets from an Account managed by GFWM to a Non-Managed Account or from an Administrative/Non-Managed 

Account to an Account managed by GFWM, if both Accounts are in the name of the Client; and 

• To open additional Accounts subject to this Agreement and to specify the Investment Solution and Strategy for each such Account, provided 

that the social security number (or TIN) and address of record related to the new Account(s) are the same as those related to the registration 

of this Account. 

Selection of Investment Solution. The Client shall select an Investment Solution and an available Strategy for the Account and also specify 

any desired reasonable restrictions for the management of their Account, understanding that any restrictions place on an Account may adversely 

affect performance. The Client shall ensure that they have reviewed the material describing the Account’s management, including the selected 

Investment Solution and Strategy. The Client shall notify their Financial Advisor or GFWM of any desired changes to their Account. These 

R275_IMSA (2010/04)


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selections and any changes must be in writing in a form acceptable to GFWM. Not all Investment Solutions may be available at each Custodian. 

Acknowledgement of risks. The Client acknowledges the risks inherent in any investment and acknowledges that their Account will fluctuate 

in value and may incur losses. The Client understands that past performance is not predictive of future results. The Client acknowledges that 

there is no guarantee that the objectives of the Strategy selected for the Account will be met. While GFWM offers advisory services for varying 

investment needs and risk tolerances, GFWM's advisory services are suitable only for long-term investors. The Client shall carefully consider 

whether their selected Investment Solution and Strategy are suitable for them. 

Discretionary Authority. The Client hereby grants GFWM full authority, as the Client's agent and attorney-in-fact, to manage the assets in the 

Account on a fully discretionary basis. This grant of discretionary authority includes the authority, without first consulting the Client: 

• to take any and all other actions on the Client's behalf that GFWM determines is customary or appropriate for a discretionary investment 

adviser to perform, including the authority to buy, sell, select, remove and replace securities, including mutual funds shares and including 

those of funds advised by GFWM or an affiliate, and other investments, for the Account, and to determine the portion of assets in the 

Account that shall be allocated to each investment or asset class and to change such allocations; 

• to select the broker-dealers or others with which transactions for the account will be effected; 

• to retain and replace, or not, any person providing investment advice, securities recommendations, model portfolios or other services to 

GFWM, including without limitation, Portfolio Strategists giving advice with regard to the Mutual Fund, ETF, Variable Annuity and CMA 

Investment Solutions, and Investment Management Firms giving advice with regard to PMA and UMA Investment Solutions, as deemed 

appropriate by GFWM; 

• with regard to IMA, MSA, and CMA Investment Solutions, to retain and replace any person providing discretionary investment management 

of the Account, as deemed appropriate by GFWM; and 

• when appropriate to the Investment Solution and/or the Risk Management Strategy and/or the Mandate and/or Strategy selected by the Client 

for the Account, to invest a portion of the Account assets, at such times and in such amounts as GFWM decides in its sole discretion, in one 

or more registered investment companies, for which GFWM, or an affiliate serves as investment adviser. 

If the Client has selected a PMA Investment Solution, the Client grants to the Investment Manager, if an IMA is selected, or to the Overlay 

Manager, if a CMA or MSA is selected, full authority, as the Client's agent and attorney-in-fact, to manage the assets in the Account on a fully 

discretionary basis. The Investment Manager of an IMA Account and the Overlay Manager of a CMA or MSA Account may be referred to as a 

“Discretionary Manager.” GFWM, through its Genworth Financial Asset Management (“GFAM”) Division, shall act as the Discretionary Manager 

for a UMA Account and for a GFAM PMA Account. The Client’s grant of discretionary authority to a Discretionary Manager includes the authority, 

without first consulting the Client: 

• to take any and all other actions on Client's behalf that the Discretionary Manager determines is customary or appropriate for a discretionary 

investment adviser to perform, including the authority to buy, sell, select, remove and replace securities, including mutual fund shares, and 

other investments, for the Account, and to determine the portion of assets in the Account that shall be allocated to each investment or asset 

class and to change such allocations; and 

• to select the broker-dealers or others with which transactions for the account will be effected. 

This grant of authority shall not apply to any Administrative/Non-Managed Account. 

Proxy Voting and Class Actions. 

PMA and UMA Investment Solutions: If the Account is invested in a PMA or UMA Investment Solution, the Client designates the applicable 

Discretionary Manager as their agent to vote proxies on securities in the Account and make all elections in connection with any mergers, 

acquisitions and tender offers, or similar occurrences that may affect the assets in the Account. Client acknowledges that as a result of this voting 

designation they are also designating the Discretionary Manager as their agent to receive proxies, proxy solicitation materials, annual reports 

provided in connection with proxy solicitations and other materials provided in connection with the above actions relating to the assets in the 

Account. However, the Client retains the right to vote proxies and may do so by notifying GFWM in writing of the desire to vote future proxies. 

Additionally, this designation of the Discretionary Manager to vote proxies and the Client’s right to vote proxies may not apply to securities that 

may have been loaned pursuant to a securities lending arrangement despite efforts by GFWM to retrieve loaned securities for purposes of voting 

material matters. 

If shares of the Genworth Financial Contra Fund, the AssetMark Funds or any other mutual fund or ETF that may be advised by GFWM or an 

affiliate, are held in an Account for which GFWM (including through its GFAM Division) acts as Discretionary Manager, GFWM will vote 100% of 

the shares over which it has voting authority according to instructions it receives from its Clients, which are the Fund’s beneficial shareholders. 

GFWM will vote shares with respect to which it does not receive executed proxies in the same proportion as those shares for which it does 

receive executed proxies. This is known as “mirror voting” or “echo voting.” 

For Mutual Fund, ETFs, and other Accounts: The Client retains the right to vote proxies if the Account is invested in a Mutual Fund, ETF or 

Variable Annuity Investment Solution or if the Account is an Administrative/Non-Managed Account, including a General Securities Account or Cash 

Alternative Account. 

Class Actions and similar actions: In all instances the Client shall make any and all elections with regard to participation in class actions, notices 

regarding bankruptcies and similar elections. 

Shareholder materials and prospectuses. With regard to IMA, MSA, CMA and UMA Investment Solutions, the Client waives the right to 

receive all shareholder materials applicable to securities held in the Account, including without limitation prospectuses and shareholder reports. 

This waiver may be rescinded at any time by written notice to GFWM. 

The Client retains the right to receive shareholder materials if the Account is invested in a Mutual Fund, ETF or Variable Annuity Investment 

Solution or in an Administrative/Non-Managed Account. 

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Investment in Genworth securities. The Client acknowledges that GFWM, including through its GFAM Division, will not invest the Account 

directly in securities issued by Genworth Financial, Inc., or any of its affiliates, even when such securities may be appropriate for the Strategy 

selected for the Account. 

The Discretionary Managers of IMA, MSA, and CMA Investment Solutions that are not affiliated with GFWM may invest the Account in securities 

issued by Genworth Financial, Inc., or any of its affiliates. 

The Client acknowledges that mutual funds and other pooled investment vehicles may invest in securities issued by Genworth Financial, Inc., or 

any of its affiliates, so that their Account may be indirectly invested in Genworth securities. The investment advisers for these funds make their 

investment decisions independently from GFWM and any Genworth company, and GFWM will not have any role in the decision to buy or sell 

Genworth securities for these funds. 

Acknowledgement regarding other advisory clients. The Client acknowledges and agrees that GFWM, any Discretionary Manager, any 

Investment Management Firm and any Portfolio Strategist utilized in the selected Strategy, and/or their affiliates, may perform advisory and/or 

brokerage services for other various clients and that, when providing services to other clients, these firms may give advice or take actions that 

differ from that given for this Account or the selected Strategy. For example, the Discretionary Manager, Investment Management Firms and/or 

their affiliates may purchase for this Account, or recommend for the selected Strategy, a security which they may sell for the account of another 

client. 

The Client also acknowledges and agrees that GFWM, any Discretionary Manager, any Investment Management Firm and any Portfolio Strategist 

may have advisory clients for whom they may provide advice similar to their management, advice or recommendations with regard to the Account 

or selected Strategy and that purchases or sales of securities in accounts advised by these firms and/or their affiliates may have adverse effects on 

the price or availability of securities included in the Client’s Account. The Client agrees that these firms shall not be precluded, by reason of such 

possible adverse effects, from recommending, advising or effecting such purchases or sales for other accounts. The Client acknowledges that the 

processes involved in executing trades for their Account may, and in some instances will likely, result in such trades being executed after similar 

trades have been executed for accounts advised by the these firms and/or their affiliates and that such trades for the Account may be at prices 

which vary from those executed for accounts advised by these and/or their affiliates. 

Trade execution. GFWM or the Discretionary Manager, if applicable, will generally direct most, if not all, transactions to the Account Custodian. If 

the selected custodian is GFTC, generally most, if not all transactions will be directed to Fidelity Brokerage Services LLC and/or National Financial 

Services LLC, or other broker-dealers selected by GFWM and contracted by GFTC. If the Account is invested in a GFAM IMA and/or UMA 

Investment Solution, the selected broker-dealers will be paid through amounts collected as part of the GFWM Advisory Fee charged the Account 

and, therefore, generally, transaction-based commissions will not be charged to the Account for execution services. In certain circumstances, 

better execution may be available from broker-dealers other than the broker-dealer(s) generally used by the Client's selected custodian. GFWM, or 

the Discretionary Manager, as applicable, may determine to trade outside the selected broker-dealer(s) and, in such a case, the Account may be 

charged for the trade execution. GFWM, or the Discretionary Manager, if applicable, may combine purchase and sale transactions for a security 

into a single brokerage order. This aggregation process could be considered to result in a cross transaction among affected accounts. 

Waiver of transactional confirmations. Pursuant to the Custodian agreement, the Client acknowledges that they may elect to receive tradeby-trade 

transaction confirmations immediately following the completion of securities transactions. The Client hereby agrees that trade-by-trade 

transaction confirmations will not be provided pursuant to this Agreement and acknowledges and agrees that information regarding securities 

transactions will instead be reported in Account Statements provided. The Client may, at any time upon written request to their Custodian, elect 

to receive trade-by-trade transaction confirmations for all transactions completed since the date of the Client’s most recent Account Statement, as 

well as for all transactions completed subsequent to the date of the request. Electronic trade-by-trade confirmations shall be provided to the Client 

at no additional fee. A fee may be imposed for the delivery, at the Client’s request, of paper hardcopy transaction confirmations. 

Electronic Delivery of Materials. GFWM and the Custodian may offer to provide Account materials, including shareholder materials and any 

requested transaction confirmations, through electronic delivery, including through web access. The Client acknowledges and agrees that some 

materials may be available only electronically or only in paper hardcopy and that, for communications available in both formats, an additional fee 

may be charged for delivery of paper hardcopies; provided, however, that the Client may receive Accounts Statements in paper hardcopy without 

additional charge. 

Instructions and Notices. Instructions and notices to GFWM regarding the Account must be in writing in a form acceptable to GFWM. 

Instructions and notices for GFWM Accounts held in custody at GFTC shall be delivered to GFWM at P.O. Box 80007, Phoenix, Arizona 85060, 

if sent through U.S. mail, or at 3200 North Central Ave, 7th Floor, Phoenix, Arizona 85012, if by delivery services which need a street address, or 

such other address provided. Instructions and notices for GFWM Accounts held in custody at all other custodians shall be delivered to 2300 Contra 

Costa Blvd Suite 600, Box 250, Pleasant Hill, CA 94523. Notices to the Client or the Financial Advisor shall be delivered to the (mail or electronic) 

address last specified on the Account Statement or since provided to and accepted by GFWM. 

GFWM may rely on such instructions, whether transmitted in hardcopy, electronically or otherwise, and shall have no duty to make any 

investigation or inquiry with respect to any instruction received from the Client, their Financial Advisor or Financial Advisory Firm. 

Any instruction, form or change request received by GFWM shall be effective only upon acceptance by GFWM, which may be conditioned on 

compliance with GFWM’s policies, procedures or safeguards. Until its acceptance of a new instruction, form or change, GFWM shall be entitled 

to rely on previously accepted instructions or selections and shall not be liable for inaction on unaccepted or inexecutable instructions. GFWM’s 

records shall be conclusive as to accepted instructions, forms and change requests. 

Limitations on liability, time needed for transactions. Client acknowledges that a reasonable amount of time will be needed for transactions, 

including, without limitation, to process new Account Applications and contributions to an existing Account, to invest the Account consistent with 

the selected Investment Solution and Strategy and any requested restriction(s), to implement changes to these selections, to apply, modify or 

remove the Actively Managed Protection Service and to terminate their Account and to transfer assets, and that the Account assets will continue 

to be impacted by the market exposure of the previous investments until each respective change is complete. Client acknowledges that the time 

periods previously experienced for transactions may not always be available and should not be relied upon. The Account is not a brokerage account 

and requested changes may not be implemented the next business day. 

The Client agrees to indemnify and hold harmless GFWM, the Custodians, the Financial Advisor, the Financial Advisory Firm, any Portfolio 

Strategist, any Discretionary Manager, any Investment Management Firm and any Portfolio Strategist, their affiliates, and their officers, employees, 

employers and associates from all liability for the acts or omissions of GFWM, the Financial Advisor, the Custodians, the Financial Advisory Firm, 

R275_IMSA (2010/04)


Page 14 of 18 


any Discretionary Manager or any third party, for any loss of market value, including, without limitation, losses due to market fluctuations that may 

occur while transactions and changes are being implemented and processed, except for losses resulting from gross negligence, reckless disregard, 

bad faith or from acts or omissions for which federal and state securities laws impose liability notwithstanding that the party having acted in good 

faith. Different standards may apply if the Account is subject to ERISA. 

Nothing in this section or in this Agreement shall eliminate any right the Client may have under state or federal securities laws. 

Review of Account Statements and Confirmations. The Client agrees to review their Account Statements and any confirmations including 

asset allocation, the Account’s Strategy and Account activity or information and promptly notify GFWM, GFTC or other Custodian of any errors. 

GFWM, the Custodians, the Financial Advisor, the Financial Advisory Firm, any Discretionary Manager and any affiliate of these parties shall not be 

liable for any errors or losses that remain unreported for more than 10 days. 

Management of the Account and Account Minimums. The Client acknowledges that there are minimum account values per account for 

GFWM's Investment Solutions. Any Discretionary Manager, if the Account is invested in a PMA or UMA Investment Solution, will generally not 

begin its management of the Account until the Account has reached the required minimum value. GFWM may not begin its management of the 

Account until the Account has reached the required minimum value but will generally invest assets upon receipt to the Account, if practicable. 

If the value of the Account falls below the applicable minimum due to Client withdrawals (but not due to investment losses), GFWM may, at its 

discretion, terminate the Account. 

Dividends And Distributions; Tax Consequences. The Client acknowledges that dividends and distributions will generally be reinvested in the 

Account and that sales of shares (including mutual fund redemptions and exchanges) generally constitute sales for tax purposes. 

Availability Of Other and Similar Services. GFWM also provides other advisory services and other services may be available to the Client. The 

Client acknowledges that it may be possible to obtain the same or similar services from other advisers or services providers at lower rates, and 

that it may be possible to obtain the various services generally provided under GFWM's advisory services separately at a lower total cost. 

Governing Law. This Agreement shall be governed by the laws of the State of California, without giving effect to the choice of law or conflict of 

law provisions thereof, except that those portions of this Agreement related to the custodial services provided by GFTC shall be governed by the 

laws of the state of Arizona, giving effect to the choice of law or conflict of law provisions thereof. 

Entire agreement and headings. This Agreement, with a completed Account Set Up and Application and other forms required by GFWM or the 

Custodians, as accepted by GFWM or Custodians, as applicable, shall constitute the entire understanding between the parties regarding GFWM's 

services and the related services of the Custodians (the “Agreement”). The headings in the Agreement, Application and related forms are for 

convenience of reference only and shall not affect the meaning or operation of this Agreement. 

Severability. In the event that any provision of this Agreement is determined void, voidable, illegal or invalid, all other provisions of this Agreement 

shall continue in full force and effect. 

Amendments. GFWM may amend this Agreement, including the fees payable under it, by giving the Client written notice of any amendment a 

sufficient time in advance of the effective date of such amendment to permit the Client to provide notice of termination of this Agreement. 

Assignment. This Agreement cannot be assigned (within the meaning of the Investment Advisers Act of 1940) by GFWM without the consent of 

the Client. 

Arbitration. This Agreement contains a predispute arbitration clause. By entering into this Agreement, with its arbitration provision, the Parties 

agree as follows: 

(A) All Parties to this Agreement are giving up the right to sue each other in court, including the right to a trial by jury, except as provided by the 

rules of the arbitration forum in which a claim is filed. 

(B) Arbitration awards are generally final and binding; a Party's ability to have a court reverse or modify an arbitration award is very limited. 

(C) The ability of the Parties to obtain documents, witness statements and other discovery is generally more limited in arbitration than in court 

proceedings. 

(D) An arbitrator does not have to explain the reason(s) for their award. 

(E) An arbitrator may or may not be affiliated with the securities industry. 

(F) The rules of some arbitration forums may impose time limits for bringing a claim in arbitration. In some cases, a claim that is ineligible for 

arbitration may be brought in court. 

(G) The rules of the arbitration forum in which the claim is filed, and any amendments thereto, shall be incorporated into this agreement. 

(H) Any controversy, claim or dispute arising out of, or relating to, this Agreement or the Account with GFWM, the Custodians, any 

Discretionary Manager, any service provider with regard to this Account or any of their affiliates or any of the officers, directors, 

agents and/or employees of these persons, including but not limited to the breach, termination, enforcement, interpretation or 

validity of this Agreement and the scope and applicability of this agreement to arbitrate, shall be settled by arbitration before the 

Judicial Arbitration and Mediation Service ("JAMS"), at the JAMS office closest to the Client’s address of record or such other location 

as the Parties may agree, before one arbitrator who shall be a retired judicial officer. The arbitration shall be administered by JAMS 

pursuant to the Comprehensive Arbitration Rules and Procedures. The laws of the State of California shall govern the substantive 

rights of the Parties. Any claim asserted by a Party shall not be joined, for any purpose, with the claim or claims of any other person 

or entity. The arbitration shall be final and binding, and judgment on the award may be entered in any court having jurisdiction. The 

Parties understand that by agreeing to arbitration, they are waiving all rights to seek remedies in court, unless otherwise mandated 

by federal or state securities laws. Except as may be required by law, neither Party nor an arbitrator may disclose the existence, 

content, status or results of any arbitration hereunder without the prior written consent of the other parties in the arbitration. State 

and federal securities laws and ERISA may provide Clients other means of pursuing an action or remedy; therefore, nothing in this 

Agreement eliminates any right a Client may have under those laws. No person shall bring a claim for putative damages or a certified 

class action to arbitration. This section and agreement to arbitrate shall survive termination of this Agreement. 

R275_IMSA (2010/04)


Page 15 of 18 


Rescission. The Client may rescind this Agreement within five business days after having entered the Agreement without penalty. However, any 

investment activity in the Client's account prior to receipt of the rescission notice will be at the sole risk of the Client. The Client will be considered 

to have entered the Agreement when all legally required elements have been met, including, for example, delivery of applicable Advisers Act Rule 

204-3 disclosure brochure(s). 

Termination. This Agreement shall continue until terminated by GFWM or the Client by providing written notice of termination to the other. 

Termination of the participation of the Financial Advisor or any Discretionary Manager in the Agreement shall not terminate the Agreement as 

between the Client and GFWM. 

Fees shall be charged until the notice of termination is processed, which will be as soon as reasonably practicable and usually within two business 

days after receipt of written notice of termination. The Client acknowledges that a reasonable amount of time will be needed to sell and/or transfer 

assets and to handle record keeping and processing matters related to the closure of the Account and that each is subject to the policies and 

procedures of the parties involved. Neither GFWM, nor any Custodian, Discretionary Manager, or the Financial Advisor shall be liable for losses, 

due to market fluctuations of otherwise, during the time taken for these transactions. 

R275_IMSA (2010/04)


Page 16 of 18 


Exhibit A – ERISA and IRA Supplement to GFWM Investment Management Services Agreement 

This Supplement is part of the GFWM Investment Management Services Agreement (“Agreement”) and shall apply to Clients for which GFWM 

acts as an investment manager of any portion of the assets of a plan and related trust governed by the Employee Retirement Income Security Act 

of 1974 ("ERISA"), (collectively, the “Plan") by the Trustees of the Plan (the “Trustees") or of an Individual Retirement Account (“IRA”). 

The term “Client” in this Supplement shall include the Trustee(s). If the “named fiduciary” (as defined in ERISA) of the Plan, who is authorized to 

appoint GFWM as investment manager, is referred to by a term other than “Trustee," then all references to “Trustee” and “Client” herein shall 

include such fiduciary. In the event of any inconsistency or conflict between this Supplement and any other terms or provisions of this Agreement, 

then this Supplement shall control. 

1. The Client and/or their Financial Advisor shall notify GFWM if the Client is subject to ERISA. 

2. The Client hereby represents and warrants to have full power, authority and capacity to execute this Agreement. If the Agreement is entered 

into by a Trustee or other fiduciary, including but not limited to someone meeting the definition of “fiduciary” under ERISA, or an employee 

benefit plan subject to ERISA, such Trustee or other fiduciary represents and warrants that the Client's participation in GFWM's service is 

permitted by the relevant governing instrument of such Plan, and that the Client is duly authorized to enter into this Agreement. The Client 

agrees to furnish such documents or certifications to GFWM as required under ERISA or as GFWM reasonably requests. The Client further 

agrees to advise GFWM of any event or circumstance that might affect this authority or the validity of this Agreement. The Client additionally 

represents and warrants that (i) its governing instrument provides that an “investment manager” as defined in Section 3(38) of ERISA may be 

appointed and (ii) the person executing and delivering this Agreement on behalf of the Client is a “named fiduciary” as defined under ERISA 

who has the power under the Plan to appoint an investment manager. 

3. GFWM acknowledges that, in regard to those Clients for which it serves as an “investment manager," it shall be a “fiduciary” as defined in 

Section 3(21)(A) of ERISA for that portion of the Plan's assets it is managing. 

4. The Client agrees to obtain and maintain, for the period of this Agreement, the bond required for fiduciaries by Section 412 under ERISA and 

to include GFWM among those covered by such bond. 

5. The Client has read, fully understands and agrees to be bound by the terms and conditions of the Agreement currently in effect and as may 

be amended from time to time. 

6. The Trustees acknowledge that they are responsible for the diversification of the Plan's investments and GFWM does not have any such 

responsibility. 

7. The Trustees acknowledge that, except with regard to any securities that have been loaned pursuant to any applicable securities lending and 

fee for holds arrangements or if the Client exercises their right to vote proxies, GFWM or any Discretionary Manager, if applicable, shall have 

sole responsibility to vote proxies for securities held in the Client's Account and that GFWM and any Discretionary Manager, if applicable, 

shall do so in accordance with that Discretionary Manager’s proxy voting policies and that these foregoing provisions regarding proxy voting 

are consistent with and allowed by all applicable terms of the Plan. 

8. If the Custodian of Account assets is GFWM's affiliate GFTC, the Client hereby acknowledges and agrees to a separate custody fee for 

ERISA Plans and IRAs (the “IRA & ERISA Account Fee") payable pursuant to its Custody Agreement with GFTC. The GFTC IRA & ERISA 

Account Fee pays for extensive custodial and related services provided by GFTC to such IRA and ERISA accounts. The annual rate of this 

fee is 0.50% as disclosed in the IRA & ERISA Account Fee section of GFTC Custody Agreement. The IRA & ERISA Account Fee is offset 

by fees and income that GFTC and/or its affiliates, including GFWM, may receive from mutual funds, investment companies or other 

pooled investment vehicles or their service providers, such as advisers or administrators, in which Account assets are invested, including 

funds managed by GFWM or a GFWM affiliate, from banks or other institutions holding deposits of Account assets or from other services 

providers. Pursuant to GFTC Custody Agreement, at this time, the GFTC intends to waive any portion of the IRA & ERISA Account Fee not 

offset by this income. The Account will receive a credit to the extent that this income paid to GFTC and its affiliates exceeds the IRA & ERISA 

Account Fee. 

9. GFWM provides the Custodians certain services with respect to the custody arrangements. If the Client selects a Custodian other than 

GFTC, the selected Custodian will remit a portion of the fee it charges the Client or receives from other parties including mutual funds, to 

GFWM as compensation for these services. The formula under which GFWM’s compensation will be calculated is prospectively agreed upon 

by the Custodian and GFWM, and will be a function of agreed upon basis points on the average daily value of assets under management or 

custody, or other methodology agreed to by the parties annually. The formula is set for a 12-month period, after which a new formula may 

be renegotiated between GFWM and the Custodian to take effect on a prospective basis. Further information about the compensation paid 

GFWM, including current and historical compensation is available on request. The Client hereby acknowledges and agrees that GFWM will 

receive, as reasonable compensation for its services, the sum of (i) the fees applicable to the Account under this Agreement and (ii) the 

amount payable to GFWM by the Custodian. 

R275_IMSA (2010/04)

Exhibit B – Actively Managed Protection Service 

Overview 


Page 17 of 18 


GFAM’s Actively Managed Protection (hereafter “AMP”) Service is a service offered by GFWM within certain Investment Solutions managed by 

the GFAM Division of GFWM. The goal of the AMP Service is to allow participation for Client Accounts in the growth of equity markets while 

also providing risk management protection for Client Accounts during periods of equity market decline. For Clients choosing the GMS or PMP 

Investment Solutions, the AMP Service is one of the two risk management service elections available for clients to choose, the other being fixed 

income investments. 

AMP Investment Objective 

The investment objective of the AMP Service is to help mitigate losses in Client Accounts during a calendar year resulting from a sustained and 

severe decline in the broad-based equity markets. During periods of rising equity markets, the goal of the AMP Service is to allow Client Accounts 

to participate in some portion of that market rise, net of the cost of the risk management protection provided by the AMP Service. 

AMP Investment Strategy 

The AMP Service provides its risk management protection by investing in any of a number of hedging and other protective investment vehicles. 

At the current time, the AMP Service invests primarily in the Genworth Financial Contra Fund and in cash equivalents. The Contra Fund is a 

proprietary registered investment company for which GFWM, through its GFAM Division, serves as investment adviser. The Contra Fund primarily 

invests in derivative instruments, most notably equity index put options. The Contra Fund may hold both put and call equity index options, and may 

also invest in cash and other forms of derivatives such as equity index futures contracts. 

In GMS and PMP Investment Solutions, the AMP Service will be the primary source of risk management protection for Accounts for which Clients 

that have made the election to use AMP. 

Risks of the AMP Service 

No Guarantee Expressed or Implied 

The phrase “risk management protection” or simply “protection” should in no way be regarded as a guarantee against losses or even the 

mitigation of losses. Similarly, the word “participation” should in no way imply positive gains in a Client Account during periods of rising equity 

markets. GFAM may or may not be successful in achieving the investment objective of the AMP Service in any individual calendar year. Some 

degree of mitigation of losses during falling equity markets (and participation in gains during rising markets) is the primarily goal of the AMP 

Service, but this is not a guarantee. 

Correlation Risk 

The value of the AMP Service is intended to rise in value as the broad-based equity market declines. GFAM generally uses the S&P 500 as a 

benchmark for the AMP Service in reviewing whether it is performing as intended. GFAM may, from time to time and as market conditions shift, 

adjust the benchmark for AMP, in order to target the AMP Service more closely to the assets generally held in Client Accounts. GFAM will adjust 

the AMP benchmark generally by incorporating other market indices, such as those of smaller capitalization companies and/or of global equity 

markets. To the extent that the assets in Client Accounts differ from GFAM’s AMP benchmark, however, not all Client Accounts may perform 

similarly to GFAM’s AMP benchmark, and hence not all Client Accounts may receive the same degree of risk management protection from the 

AMP Service when the AMP benchmark declines. 

Performance Measurement of the AMP Service 

The goal of the AMP Service is to mitigate the declines in a Client Account during downturns in the AMP equity benchmark. However, in keeping 

with the purpose of the AMP Service to provide risk management protection only against “severe and sustained” declines in the equity markets, 

GFWM measures the performance and success of the AMP Service on a calendar year basis. The AMP Service should not be expected to 

mitigate losses occurring over short periods of time that ultimately reverse, nor should the AMP Service be expected to mitigate losses occurring 

from market declines that are small or negligible. 

Risk/Return “Drift” in the AMP Service and the Postponement Option 

GFAM intends to review periodically the level of exposure in participating Client Accounts to the AMP Service. At a frequency of not less than 

once a quarter, and in some cases more frequently, GFAM will review and generally subsequently adjust the level of exposure to the AMP Service 

in Client Accounts. These reviews may be conducted as a result of known changes in the underlying concentration of the Contra Fund, or they 

may be performed simply as part of a risk management review of similarly positioned Client Accounts. 

Between the times that the level of exposure to the AMP Service is adjusted, and usually as the result of a significant equity market movement, 

the risk/return characteristics of the AMP Service may drift substantially from the characteristics the Service had at the time it was most recently 

reset. This is particularly true for the GMS and PMP Investment Solutions. 

Clients should be aware that opening a Client Account in a GMS or PMP Investment Solution between the times that the AMP Service is reset 

could result in a risk profile significantly different from the risk profile of that account at the time of reset. For example, if the equity market 

declines substantially from the time the AMP Service was last reset in a GMS or PMP Investment Solution, a client opening a new Client Account 

at that point in time may experience significantly reduced participation in any subsequent market rise between the time the account was opened 

and the time of the next AMP Service is reset. Similarly, if the equity market has risen significantly since the time of the last AMP Service reset 

in a GMS or PMP Investment Solution, a client opening a new Client Account at that point in time may experience significantly reduced protection 

against any further market declines from that point until the next time the AMP Service is reset. 

New Clients opening an Account in a GMS or PMP Investment Solution and have made a service election of the AMP Service as their risk 

management protection strategy may elect to postpone the investment of their assets until the next periodic reset of the AMP Service. Any cash 

R275_IMSA (2010/04)

Exhibit B – Actively Managed Protection Service 


Page 18 of 18 


deposits received will be invested in cash equivalents until the subsequent reset, and securities received in-kind will be held until the subsequent 

reset as well. This “postponement option” is available only for newly opened Client Accounts in the GMS or PMP Investment Solutions who 

have made the AMP Service election, and is not available for subsequent contributions or additions to such accounts that are made between the 

periodic resets of the AMP Service. Account Fees will be charged while the application of AMP Service to your account is pending. 

Limiting Circumstances for Participation in Upside Equity Market Movements 

The second goal of the AMP Service is to allow growth in the equity portion of a Client’s Account to increase the value of the overall Account. 

This is the “participation” portion of GFAM’s “participation and protection” objective. GFAM Clients who elect AMP should know that the “cost” 

of the protection will mute returns when equity markets are increasing in value. This drag is generally due to 1) the fact that the AMP Service acts 

contrary to the AMP equity benchmark used by GFAM to implement the AMP Service, and 2) the cost of the hedging vehicles used in the AMP 

Service may, from time to time, increase, particularly in declining equity market conditions. As a result, Client Accounts will not move in lockstep 

with the overall equity markets. Accounts with AMP may fall while the overall equity market is rising in certain time intervals, and may fall more 

than the overall equity markets in certain intervals. It should also be noted that a consistent pattern has been observed in the market that the cost 

of the AMP Service rises and stays high for extended periods of time following periods of rapid or sustained equity market decline. 

Disclosure of Conflicts of Interest 

GFWM will receive management fees as Investment Adviser to the Contra Fund, currently a key component of the AMP Service. Such 

management fees are in addition to the fees GFWM receives under the Investment Management Service Agreement. 

R275_IMSA (2010/04)

GFTC Custody agreement 

GFTC Custody Agreement


Page 1 of 8 


Terms of Agreement 

By executing the Genworth Financial Trust Company Account Application 

(“Account Application”), you (the “Client”) agree to retain Genworth 

Financial Trust Company (“GFTC”) to provide custodial, brokerage and 

related services on the following terms: 

1. Acceptance of Application, Establishment of Account. This 

Custody Agreement (“Agreement”) shall be effective upon GFTC’s 

acceptance of the Client’s Account Application. Upon GFTC’s receipt of 

the Client’s assets, in a form acceptable to GFTC, GFTC shall establish, 

in the name of the Client, one or more custodial accounts (each an 

“Account”) for the safekeeping of the Client’s assets. A custodial 

account may include a “Funding Account” that can be used to facilitate 

and receive assets transferred in kind. This Agreement may apply 

to more than one Account, but the singular form will be used in this 

Agreement. 

2. Agreement Designed for use with Genworth Financial Wealth 

Management Platform. This Agreement is designed for use with 

persons who have retained an investment adviser to provide investment 

advice with regard to Account assets. This Agreement may only be used 

by persons who: 1. have contracted with a Financial Advisory Firm for 

investment advice pursuant to a Client Services Agreement (“CSA”) in 

connection with a platform sponsored by Genworth Financial Wealth 

Management, Inc. (“GFWM”); or 2. upon a referral from a Financial 

Advisory Firm, have retained Genworth Financial Wealth Management, 

Inc. (“GFWM”) to provide discretionary investment advice pursuant to an 

Investment Management Services Agreement (“IMSA”). 

The individual associated with the Financial Advisory Firm is referred to 

as the Client’s “Financial Advisor.” Pursuant to either a CSA or IMSA, the 

Client may authorize investment managers to manage Account assets, 

and these managers are referred to as “Discretionary Managers.” If the 

Client has an IMSA with GFWM, the term “Discretionary Manager” will 

also refer to GFWM. 

3. GFTC May Rely upon Instructions. The Client authorizes GFTC to 

accept instructions from the Financial Advisor, the Financial Advisory 

Firm, the Discretionary Manager, if applicable, and GFWM. Such 

instructions may include, but are not limited to, instructions: 

• To contribute or transfer assets to the Account; 

• To invest Account assets and execute transactions in the Account; 

• To pay directly from the Account Fees related to this Agreement, a 

CSA or an IMSA; 

• To distribute or transfer assets from the Account; and 

• To take any actions incidental to the foregoing. 

GFTC’s acceptance of these instructions may be subject to its policies and 

procedures. GFTC may rely on these instructions, whether transmitted 

in writing, electronically, orally or otherwise, and shall have no duty to 

make any investigation or inquiry with respect to any instruction received 

from the Financial Advisor, the Financial Advisory Firm, any Discretionary 

Manager or GFWM. 

4. Account Statements. GFTC shall periodically, but not less than 

quarterly, provide the Client with an Account Statement listing the 

Account’s assets and valuations. GFTC may also provide access to 

Account information by electronic or web-based access or by other 

means. 

5. Confirmation of Transactions. The Client acknowledges that 

they may elect to receive trade-by-trade transaction confirmations 

immediately upon completion of securities transactions. The Client 

hereby agrees that trade-by-trade transaction confirmation will not be 

provided pursuant to this Agreement and acknowledges and agrees that 

information regarding securities transactions will instead be reported in 

the Account Statements provided to the Client. 

The Client may, at any time, upon written request to GFTC, elect to 

receive trade-by-trade transaction confirmations for all transactions 

since the date of their most recent Account Statement, as well as for all 

subsequent transactions. Electronic trade-by-trade confirmations shall 

be provided to the Client at no additional fee. A fee may be imposed 

for delivery if the Client requests receipt of hardcopy, paper individual 

transaction confirmations. 

6. Account Information to Authorized Persons. The Client shall 

provide GFTC all information, and any changes to that information, 

required or appropriate to open and maintain the Account and provide the 

services contemplated by this Agreement. The Client authorizes GFTC 

to provide Account information (including, but not limited to, Account 

activity and assets) to the Financial Advisor, the Financial Advisory Firm, 

any Discretionary Manager and GFWM. Client Account information may 

also be provided to vendors that provide services to GFTC regarding the 

Account and others, consistent with GFTC’s Privacy Policy. 

7. Shareholder Materials. Unless GFTC notifies the Client otherwise, 

GFTC shall forward shareholder materials, including prospectuses, 

shareholder reports and proxies (collectively “Shareholder Materials”) 

received to either the Client or the designated Discretionary Manager 

consistent with the Client’s CSA or IMSA, and any elections made 

thereunder, as applicable, and consistent with Exhibit B, Agreement 

Regarding Securities Lending, of this Agreement, including section 5 

of Exhibit B regarding Voting Rights with Respect to Loaned Securities. 

GFTC shall not be responsible or liable for any action or inaction by Client 

with regard to Shareholder materials. 

8. Electronic Delivery of Materials. GFTC may offer to provide 

Materials, including Shareholder Materials and requested trade-bytrade 

transaction confirmations, through electronic delivery, including 

through web access. The Client acknowledges that some materials may 

be available only electronically or only in hardcopy, and that, for those 

communications available in both formats, an additional fee may be 

charged for delivery of paper; provided, however, the Client may always 

receive quarterly Account Statements in paper hardcopy form without 

additional charge. 

9. Brokerage. It is anticipated that the Discretionary Manager or Client, 

consistent with Platform services, as applicable, will direct most, if not all, 

transactions to Fidelity Brokerage Services LLC and/or National Financial 

Services LLC, or other broker-dealers contracted by GFTC, because 

these contracted brokers are compensated pursuant to agreements with 

GFTC and generally do not charge transaction-based commissions for 

their execution services. However, trade execution is in the discretion of 

the applicable Discretionary Manager and, if the Discretionary Manager 

determines that better execution may be available at another broker, 

the Discretionary Manager may direct the trade outside the broker(s) 

contracted with GFTC and, in such an instance, the Account may incur 

a commission or trading costs in addition to the fees specified in this 

Agreement. 

GFTC anticipates that transactions in mutual fund shares will be effected 

through the National Securities Clearing Corporation (“NSCC”), but 

GFTC may use such clearing resources as it deems appropriate. 

Purchase and/or sale transactions may be combined into a single 

brokerage order. This aggregation process could be considered to result 

in a cross transaction among affected Client accounts. 

10. Securities Lending and Fee for Holds Arrangements. Securities 

lending and fee for holds arrangements shall be subject to the provisions 

set forth in Exhibit B to this Agreement. 

R239_GFTCCustAgree (2010/04)


11. Custodial Account Fees. The Client authorizes GFTC to debit the 

following Custodial Account Fees from the Account. These fees are 

for GFTC’s custodial services to the Account and are separate, and in 

addition to, other fees that GFTC may be authorized to deduct from the 

Account. There are no separate fees for a Funding Account. 

The Custodial Account Fee will differ depending upon the Investment 

Solution chosen for the Account pursuant to the CSA or IMSA applicable 

to the Account assets. The names of the Investment Solutions referenced 

below are those used in the CSA or IMSA, as applicable. 

Assets of other Accounts owned by the same Client will not be 

aggregated when calculating Custodial Account Fees. 

Custodial Account Fee for Mutual Fund Accounts – flat quarterly 

fee. If the Account is invested pursuant to a Mutual Funds Investment 

Solution, including those in the Distribution Strategies which invest in 

mutual funds, and contains assets as of the last business day of any 

calendar quarter, a Custodial Account Fee of $37.50 shall be due and 

debited the Account, on the first business day of the following calendar 

quarter, in payment of fees for the upcoming calendar quarter. No fees 

are charged upon receipt of assets to an Account. No fees are prorated 

or refunded. 

Custodial Account Fee for ETF, MSA, IMA and CMA Accounts – 

basis points fee on assets. If the Account is invested pursuant to: 1. an 

ETF Investment Solution, including those in the Distribution Strategies 

which invest in ETFs, or 2. a Manager Select Account (“MSA”) or 3. 

an Individually Managed Account (“IMA”) Investment Solution, but not 

including a GFAM Privately Managed Accounts ("PMA") Investment 

Solution (discussed below), or 4. a Consolidated Managed Account 

(“CMA”) Investment Solution, a Custodial Account Fee shall be payable 

quarterly, in advance, for the upcoming calendar quarter, at the following 

annual rates, based on the average daily value of the Account’s “billable 

assets” for the period during which assets were held in custody during 

the preceding calendar quarter. The Account’s “billable assets” do not 

include any mutual fund shares on which GFTC receives “service fee” 

income pursuant to shareholder services or administrative services 

agreements that GFTC may have with mutual funds and/or their 

services providers. The Custodial Account Fee shall be calculated on a 

“tiered” basis with the assets on the lowest asset value tier receiving 

the highest percentage rate fee and only assets over the value level for 

the higher tiers receiving the lower percentage rates fees. No fees are 

charged upon receipt of assets to an Account or during the Account’s 

first calendar quarter. No fees are prorated or refunded, including upon 

termination of the Account. 

Table I applies if the Account is invested in an ETF Investment Solution, 

other than those in the Distribution Strategies which invest in ETFs, 

MSA or a Third-party IMA Investment Solution which invests in assets 

identified as equity allocations. 

Table II applies if the Account is invested in a Third-party IMA 

Investment Solution that is invested in assets identified as a fixed income 

allocation. 

Table III applies if the Account is invested in a CMA Investment Solution, 

Rochdale's IMA Strategy or a Distribution Strategies ETF Investment 

Solution. 

Custodial Account Fee Tables ETF, MSA, IMA and CMA Accounts: 

Table I - ETF, MSA and Third-party Equity IMA 

Tier: Tier Billable Assets: Tier Annual Rate 

1 On amounts $250,000 and below 0.25 % 

2 Additional amounts over $250,000 up to $1 million 0.10 % 

3 

Additional amounts over $1 million up to $2 

million 

0.08 % 

4 Additional amounts over $2 million 0.05 % 

Table II - Third-party Fixed Income IMA 




3 

Additional amounts over $1 million up to $2 

million 

0.08 % 


Table III - CMA, Rochdale's IMA Strategy and ETF version of 






For Fee Tables I, II, and III, the following minimum custody fees apply: 

ETF, MSA and Third-party Equity IMA 

Third-party Fixed Income IMA 

ETF version of Distribution Strategies 

Rochdale IMA Strategy 

CMA 


Page 2 of 8 


$250 annually per account 





The minimum fee is one quarter of the above fees and is applied 

quarterly. 

GFAM PMA – If the Account is invested in a Privately Managed Account 

("PMA") Investment Solution managed by the Genworth Financial Asset 

Management (“GFAM”) Division of GFWM, no separate custodial 

account fee will be charged. These Investment Solutions currently 

include the GFAM Principal Return Exposure Strategy (“PRX”), the 

GFAM Preservation Strategy and the GFAM Fixed Income Accounts. 

For these GFAM PMA Investment Solutions, payment for custodial and 

brokerage or trading services is included in the GFWM Advisory Fee, if 

the account is pursuant to an IMSA, or in the Program fee, if the Account 

is pursuant to a CSA. 

Custodial Account Fee for UMA Accounts – basis points fee on 

deposits to small accounts. If the Account is invested pursuant to a 

Unified Managed Account (“UMA”) Investment Solution, payment for 

custodial and brokerage or trading services is included in the GFWM 

Advisory Fee, if the account is pursuant to an IMSA, or the Program fee, 

if the account is pursuant to a CSA. No separate custodial account fee 

will be charged to an Account invested in a UMA Investment Solution 

unless it is a “small account” as described below. 

If UMA Account assets plus the value of the deposit being made to the 

Account are valued at less than $250,000, a Custodial Account Fee of 

0.25% shall be payable on any cash deposit of $2000 or more. 

12. Custodial Account Fees For Administrative/Non-Managed 

Accounts. GFTC may also hold in custody assets that do not receive 

advisory services pursuant to a CSA or an IMSA. These assets shall 

be referred to as an “Administrative/Non-Managed Account” assets. 

Neither GFTC, nor GFWM, nor any Discretionary Manager will manage 

or give any advice with regard to these assets. 

Administrative/Non-Managed Accounts may include a Cash Alternative 

Account or a General Securities Account. 

Cash Alternative Account. In the Cash Alternative Account, GFTC 

may offer a Money Market Fund or Custodian’s cash sweep vehicle. 

If the Client does not otherwise specify the investment for their Cash 

Alternative Account, the Account will be invested in the same cash 

equivalent investments last used for cash equivalents when the Account 

was invested pursuant to an Investment Solution. 



General Securities Account. In the General Securities Account, 

the Client may transfer to the Account those equity or fixed-income 

securities acceptable to GFTC. No securities may be purchased in 

this Account. The Client will be responsible for directing the sale 

of investments in the Account. If assets are to be held in a General 

Securities Account, GFTC must receive and accept, executable written 

instructions, prior to GFTC's receipt of the securities. Fees will generally 

not be charged against the assets of a General Securities Account. Any 

fees payable will generally be charged to another Account established 

under this Agreement or directly to a bank account via the Automated 

Clearing House (ACH) process. 

Custodial Account Fee for Administrative/Non-Managed Accounts 

— $50. The Custodial Account Fee for an Administrative/Non-Managed 

Account shall be $50 annually, payable quarterly in advance. There shall 

be no refund of any portion of the Custodial Fee upon termination of an 

Administrative/Non-Managed Account. 

This Custodial Account Fee for an Administrative/Non-Managed Account 

will generally be charged to another Account established under this 

Agreement. 

The Financial Advisor Fee, payable pursuant to an IMSA, if applicable, 

shall be payable on Administrative/Non-Managed Accounts unless 

GFWM receives instructions not to charge the Financial Advisor Fee. 

Upon proper written request, GFTC will arrange for sale of General 

Securities Account assets, which may be through a sub-custodian or 

other agent. Such requests shall be processed in a reasonable time and 

the sale of General Securities Account assets will be at the market price 

available at time of sale. GFTC will not accept limit orders on the sale of 

General Securities Account assets. Separate fees will not be charged for 

these transactions unless notice is given to Client. GFTC is authorized 

to take any actions it deems appropriate to carry out an instruction. 

Instructions regarding General Securities Account assets must be 

executable within the normal operations of GFTC. 

13. Additional Account Fees. 

1. Account Termination Fee Upon termination, the Account will be 

assessed a $75 Account Termination Fee. 

This fee will not be assessed on withdrawals from or changes to the 

Account or if the Client terminates the Account within five days of 

opening the Account. 

2. Fees for Additional Services GFTC may charge a fee for delivery 

of paper communications, such as Shareholder Materials and 

transactional confirmations, if electronic delivery is available and not 

elected by Client but, in no event, shall a fee be charged for receipt 

by Client of paper quarterly Account Statements. 

GFTC may also charge additional fees for special services, such as 

overnight delivery, wiring funds or non-standard services. 

14. IRA and ERISA Account Fee. GFTC or its affiliates may receive 

fees for advisory, administrative or other services from mutual funds, or 

their service providers, whose shares may be held by the Account, from 

banks which may hold deposits of Account assets or from other financial 

services providers. In the case of IRA and ERISA accounts, such “service 

fee” income will offset an “IRA & ERISA Account Fee” otherwise 

chargeable to the Account by GFTC for the additional custodial and other 

services provided by GFTC to IRA and ERISA accounts. 

The IRA & ERISA Account Fee is payable quarterly, in advance, for the 

upcoming calendar quarter, at the annual rate of 0.50%, based on the 

Account’s value (including mutual fund shares) on the last business day 

of the preceding calendar quarter. The IRA & ERISA Account Fee is in 

addition to the other fees described in this Agreement. No portion of the 

fee is charged upon receipt of assets to an Account, and no portion of 

the fee is prorated or refunded. 

R239_GFTCCustAgree (2010/04) 


Page 3 of 8 


At this time, GFTC intends to waive any portion of this IRA & ERISA 

Account Fee not offset by the service fee income received by GFTC or 

an affiliate. Additionally, the Account will receive a credit to the extent 

that such service fee income received by GFTC or an affiliate exceeds 

the IRA & ERISA Account Fee chargeable to the Account. 

15. Indirect Investment Expenses; Payments to GFTC from Third 

Parties. Pooled investment funds, such as mutual funds and exchangetraded 

funds, pay expenses incurred by the fund, such as management 

fees, 12b-1 fees and administrative service fees. If invested in such 

funds, the Account will indirectly pay its share of the fees and expenses 

paid by these funds, in addition to any fees paid to GFTC or as part of the 

Platform. Additionally, some funds may assess redemption fees that may 

also be paid by the Account assets. 

GFTC or its affiliates may receive fees from funds, or their services 

providers, whose shares may be held by the Account(s), or from banks 

which may hold deposits of Account assets, or from other financial 

services providers. Included in these funds may be funds, such as the 

AssetMark Funds and the Genworth Financial Contra Fund, which are 

advised by, or receive services from, and pay fees to, GFTC or an affiliate 

of GFTC. 

The Account may also incur expenses related to the custody of foreign 

securities, including fees from paying agents of the issuers of foreign 

securities, such as American Depository Receipts (e.g., "ADR Fees"). 

ADR Fees may appear as a separate fee on the Account Statement. 

The Account may also incur fees for equity transactions known as 

“SEC fees” or “Section 31 fees.” These transactions fees are paid 

by self-regulatory organizations to the U. S. Securities and Exchange 

Commission to pay the costs incurred by the government in supervising 

and regulating the securities markets and securities professionals, and 

broker-dealers, in turn, recover these costs from customers. 

16. Deductions from Account to Pay Fees. Unless other arrangements 

are made, fees payable pursuant to this Agreement and pursuant to 

the applicable CSA or IMSA shall be paid through deduction by GFTC 

of amounts directly from the Account. Without notice to or verification 

from the Client, GFTC may rely on, and may pay fees out of the Account 

in accordance with, any statement from the Financial Advisor, Financial 

Advisory Firm, applicable Discretionary Manager and GFWM fees and 

expenses, and GFTC is authorized to liquidate Account assets in order 

to pay such fees. 

Cashiering and Administrative Service Fees. Unless other arrangements 

are made, fees incurred resulting from non-sufficient funds or returned 

checks or wires shall be deducted directly from the Account. 

17. Liens on Account. The Client agrees that all fees, debts and other 

obligations owed to GFTC, the Financial Advisor, Financial Advisory 

Firm, any Discretionary Manager and GFWM by the Client, including, 

without limitation, with regard to other custodial accounts maintained 

by GFTC, shall be secured by a lien on all assets now or hereafter held 

or maintained in the Account and in any other present or future account 

of Client at GFTC, whether held individually or jointly with others or 

registered as a trust, IRA or retirement or pension plan of which the 

Client is the beneficiary, owner or participant. 

18. Checks. Checks for deposit to the Account should be made payable 

to Genworth Financial Trust Company. Client acknowledges that funds 

deposited by check may not be available for withdrawal for up to 10 

business days to provide for proper check clearance. If a check does not 

clear in a timely manner, Client will be held liable for any trading losses 

in Account. 

19. Acknowledgement of Risks of Investments and of Tax 

Consequences. The Client acknowledges the risks inherent in any 

investment, that the Account will fluctuate in value and may incur losses 

and that transactions in Account assets may have tax consequences for 

the Client.


20. Limitations on Role and Liability of GFTC; Indemnification by 

Client. 

(a) The Client acknowledges and agrees that GFTC has no duty to 

supervise or monitor the investment of, or any transactions in, 

Account assets or the actions of the Client, the Financial Advisor, 

the Financial Advisory Firm, any Discretionary Manager or GFWM. 

GFTC does not give investment, legal, tax or accounting advice 

and makes no recommendations concerning the investment of 

Account assets, the selection or retention of the Financial Advisor, 

the Financial Advisory Firm, any Discretionary Manager or GFWM. 

The Client shall be responsible for the risks associated with the 

investment of the Account assets and for any tax liability incurred in 

connection with transactions involving Accounts assets. 

(b) The Client acknowledges that a reasonable amount of time will 

be needed: (i) to establish the Account, including but not limited 

to receiving assets from a third-party; (ii) to purchase, sell and/or 

redeem Account assets or to change the investment objectives 

or the Strategy of the Account; (iii) to make changes related to 

the Account, including, but not limited to, address and beneficiary 

designations; and (iv) to liquidate and settle assets and/or transfer 

assets from and/or terminate the Account, and that GFTC shall 

not be liable for any losses, including, but not limited to, those 

due to market value fluctuations, tax consequences, or other 

consequential damages during the time taken for these processes 

and transactions. This is not a brokerage account and transactions 

may not be initiated within one or two business days of receipt of 

the instructions. A reasonable amount of time must be allowed for 

all account activity and transactions. The Client may not rely upon 

the time taken for previous changes or transactions. 

(c) The Client agrees to review all Account Statements, any trade 

confirmations and other notices and confirmations of information 

and promptly notify GFTC of any errors and shall not hold GFTC 

liable for any errors or losses that remain unreported for more than 

10 days after receipt of mailed information or posting of electronic 

information. 

(d) GFTC shall not be liable for, and the Client shall indemnify GFTC, 

its affiliates and their officers, directors, shareholders, agents and 

employees against, any losses, damages or expenses resulting 

from any action or inaction by GFTC or by any third party, except for 

losses resulting from GFTC’s gross negligence, reckless disregard, 

willful misconduct or bad faith. The limitations on GFTC’s liability 

and the indemnification responsibilities of the Client shall apply, 

but not be limited to: (i) any losses in Account value and any tax 

implications with regard to Accounts assets; (ii) any action or 

inaction by GFTC taken in reliance upon any notice or instruction 

from the Client, the Financial Advisor, the Financial Advisory Firm, 

any Discretionary Manager or GFWM, or GFTC’s refusal, on advice 

of counsel, to act in accordance with such a notice or instruction; 

and (iii) any action or inaction of the Client, the Financial Advisor, 

the Financial Advisory Firm, any Discretionary Manager or GFWM, 

including, but not limited to, those resulting from transmittal or nontransmittal 

of information by GFTC; (iv) GFTC’s failure to execute 

unclear, poorly worded, or unexecutable instructions or other 

instructions given after previous instructions are underway. Under 

no circumstances shall GFTC be liable for indirect, consequential, 

special or incidental damages, including, but not limited to, loss of 

profits, gains, appreciation, revenue or opportunity. 

(e) The Client’s indemnification obligation pursuant to this Agreement 

shall also include the responsibility to reimburse GFTC for all 

attorneys’ fees and costs incurred by GFTC in connection with 

any of the following: (i) responding to threatened claims by any 

party, including claims by the Client related to acts of GFTC in the 

administration of the Account; (ii) defending (whether successfully 


Page 4 of 8 


or not and including on appeal) against asserted claims by any 

third party, and against unsuccessful claims by the Client, related 

to actions of GFTC in the administration of the Account; and (iii) 

prosecuting (including on appeal) a successful claim or counterclaim 

against the Client seeking payment under this indemnification 

obligation. 

21. Entire and Binding Agreement. This Agreement, including its 

Exhibits, and its Account Application and any supplemental forms, as 

such may be amended, shall constitute the entire understanding between 

the Client and GFTC regarding GFTC's services to the Account, except 

that, for an Individual Retirement Account (“IRA”) or a Roth Individual 

Retirement Account (“Roth IRA”) Account established pursuant to a 

GFTC IRA Custodial Agreement or Roth IRA Custodial Agreement, the 

applicable GFTC IRA or Roth IRA Custodial Agreement shall supplement 

this Agreement. 

The Client represents that this Agreement, including those portions 

applicable to Securities Lending and Fee for Holds Arrangements, 

constitutes a legal, valid, and binding obligation enforceable against them 

and that their performance of their obligations under this Agreement 

shall at all times comply with all applicable laws and regulations. 

22. Modification of Agreement and Instructions. This Agreement 

may only be amended in writing. GFTC may amend this agreement, 

including the fees payable under it, by giving the Client written notice 

of any amendment a sufficient time in advance of the effective date of 

such amendment to permit the Client to provide notice of termination of 


Any instruction, form, beneficiary designation or change request received 

by GFTC shall be effective only upon acceptance by GFTC, which may 

be conditioned on compliance with GFTC’s policies, procedures or 

safeguards. Until its acceptance of a new instruction, form, designation 

or change, GFTC shall be entitled to rely on previously accepted 

instructions or designations and shall not be liable for inaction on 

unaccepted or inexecutable instructions. GFTC’s records shall be 

conclusive as to accepted instructions, forms, designations and change 

requests. 

23. Notices. Any notice or instruction to GFTC must be in writing 

and delivered to Genworth Financial Trust Company at P.O. Box 

80007, Phoenix, AZ 85060 or such other address provided by GFTC. 

Communications and notices to Client shall be delivered to the Client’s 

U.S. postal and/or electronic mail, as appropriate, address of record as 

contained in GFTC records. 

24. Governing law. The Account and this Agreement shall be governed 

by the laws of the State of Arizona, as applied to contracts entered into 

and completely performed within Arizona and without giving effect to 

any laws regarding conflicts of law. 

25. No agency created. The Financial Advisor, the Financial Advisory 

Firm and any Discretionary Manager and GFWM are not agents of 

GFTC. 

26. Assignment and successors. GFTC may assign its rights and duties 

under this Agreement to any person or entity upon 30 days prior written 

notice to the Client. The terms and conditions of this Agreement shall be 

binding upon the heirs, executors, administrators, successors, assigns, 

and personal representatives of the Client and inure to the benefit of the 

Custodian and its successors and assigns. 

27. Termination. The Client may terminate the Account at any time by 

giving written notice to GFTC. If there is more than one Client, any one 

Client, acting alone, shall have authority to terminate the Account. GFTC 

may terminate the Account and distribute Account assets to the Client 

at any time without cause or reason. Upon any termination, Client shall 

remain liable for any unpaid fees, debts, or other obligations incurred in 

connection with the Account. 



28. Arbitration Agreement. This Agreement contains a predispute 

arbitration clause. By entering into this Agreement, with its arbitration 

provision, the Parties agree as follows: 

(a) All Parties to this Agreement are giving up the right to sue each 

other in court, including the right to a trial by jury, except as provided 

by the rules of the arbitration forum in which a claim is filed. 

(b) Arbitration awards are generally final and binding; a Party's ability to 

have a court reverse or modify an arbitration award is very limited. 

(c) The ability of the Parties to obtain documents, witness statements 

and other discovery is generally more limited in arbitration than in 

court proceedings. 

(d) An arbitrator does not have to explain the reason(s) for their award. 

(e) Arbitrator may or may not be affiliated with the securities industry. 

(f) The rules of some arbitration forums may impose time limits 

for bringing a claim in arbitration. In some cases, a claim that is 

ineligible for arbitration may be brought in court. 

(g) The rules of the arbitration forum in which the claim is filed, and any 

amendments thereto, shall be incorporated into this Agreement. 

(h Any controversy, claim or dispute arising out of, or relating 

to, this Agreement or the Account, with GFTC, GFWM, any 

Discretionary Manager, any service provider with regard to this 

Account, or any of their affiliates, or any of the officers, directors, 

agents and/or employees of those persons, including but not 


Page 5 of 8 


limited to the breach, termination, enforcement, interpretation 

or validity of this Agreement and the scope and validity of this 

agreement to arbitrate, shall be settled by arbitration before 

the Judicial Arbitration and Mediation Services (“JAMS”), 

at the JAMS office closest to the Client’s address of record 

or such other location as the Parties may agree, before one 

arbitrator, who shall be a retired judicial officer. The arbitration 

shall be administered by JAMS pursuant to the Comprehensive 

Arbitration Rules and Procedures. The laws of the State of 

Arizona shall govern the substantive rights of the Parties. Any 

claim asserted by a Party shall not be joined, for any purpose, 

with the claim or claims of any other person or entity. The 

arbitration shall be final and binding, and judgment on the 

award may be entered in any court having jurisdiction. The 

Parties understand that by agreeing to arbitration, they are 

waiving all rights to seek remedies in court, unless otherwise 

mandated by federal or state law. Except as may be required by 

law, neither Party nor an arbitrator may disclose the existence, 

content, status or results of any arbitration hereunder without 

the prior written consent of the other parties in the arbitration. 

State and federal securities laws and ERISA may provide Clients 

other means of pursuing an action or remedy; therefore, nothing 

in this Agreement eliminates any right a Client may have under 

those laws. No person shall bring a claim for punitive damages or 

a certified class action to arbitration. This section and agreement 

to arbitrate shall survive termination of this Agreement. 

Exhibit A – ERISA and IRA Supplement to GFWM Investment Management Services Agreement 

This Supplement to the GFTC Custody Agreement shall apply to Clients 

for which GFTC holds in custody any portion of the assets: 1. of a plan, 

and related trust, governed by the Employee Retirement Income Security 

Act of 1974 ("ERISA"), (collectively, the “Plan") for the Trustees of the Plan 

(the “Trustees") or 2. of an Individual Retirement Account (an “IRA”). 

The term “Client” in this Supplement shall include the Plan Trustee(s). 

If the “named fiduciary” (as defined in ERISA) of the Plan, who is 

authorized to contract with GFTC, is referred to by a term other than 

“Trustee," then all references to “Trustee” and “Client” herein shall 

include such fiduciary. In the instance of an IRA, “Client” shall include 

the individual in whose name the IRA is established. 

In the event of any inconsistency or conflict between this Supplement 

and any other terms or provisions of the GFTC Custody Agreement, then 

this Supplement shall control. 

1. The Client and/or their Financial Advisor shall notify GFTC if the 

Client is subject to ERISA. 

2. The Client hereby represents to have full power, authority 

and capacity to execute the GFTC Custody Agreement (the 

“Agreement"). If the Agreement is entered into by a Trustee 

or other fiduciary, including but not limited to someone 

meeting the definition of “fiduciary” under ERISA, or an 

employee benefit plan subject to ERISA, such Trustee or other 

fiduciary represents and warrants that the Client's contracting 

for GFTC’s services is permitted by the relevant governing 

instrument of such Plan, and that the Client is duly authorized 

to enter into this Agreement. The Client agrees to furnish such 

documents or certifications to GFTC as required under ERISA 

or as GFTC reasonably requests. The Client further agrees to 

advise GFTC of any event or circumstance that might affect 

this authority or the validity of this Agreement. The Client 

additionally represents and warrants that (i) its governing 

instrument provides that an “investment manager” (as defined 

in Section 3(38) of ERISA) may be appointed and (ii) the person 

executing and delivering this Agreement on behalf of the Client 

is a “named fiduciary” as defined under ERISA who has the 

power under the Plan to appoint an investment manager. 

3. For any Plan assets, the Client agrees to obtain and maintain, 

for the period of this Agreement, the bond required for 

fiduciaries by Section 412 under ERISA and to include GFTC 

among those covered by such bond. 

4. The Client has read, fully understands and agrees to be bound 

by the terms and conditions of the Agreement currently in 

effect, and as may be amended from time to time. 

6. The Trustees acknowledge that they are responsible for the 

diversification of the Plan's investments and GFWM does not 

have any such responsibility. 

7. The Client hereby acknowledges and agrees to a separate 

custody fee for ERISA Plans and IRAs (the “IRA & ERISA 

Account Fee"). The IRA & ERISA Account Fee pays for 

extensive custodial and related services provided by GFTC 

to such IRA and ERISA accounts. The annual rate of this fee 

0.50% and is disclosed in the IRA & ERISA Account Fee 

section of the GFTC Custody Agreement. The IRA & ERISA 

Account Fee is offset by fees and income that GFTC and/or its 

affiliates, including GFWM, may receive from mutual funds, 

investment companies or other pooled investment vehicles or 

their service providers, such as advisers or administrators, in 

which Account assets are invested, including funds managed 

by GFWM or a GFWM affiliate, from banks or other institutions 

holding deposits of Account assets or from other services 

providers. At this time, the GFTC intends to waive any portion 

of the IRA & ERISA Account Fee not offset by this income. The 

Account will receive a credit to the extent that this income paid 

to GFTC and its affiliates exceeds the IRA & ERISA Account 

Fee. 



Page 6 of 8 


Exhibit B – Agreement Regarding Securities Lending and Fee for Holds Arrangements 

The Client agrees as follows with respect to securities held in the Account 

in connection with Securities Lending and Fee for Holds Arrangements. 

1. Definitions. The following definitions apply to the provisions of the 

Agreement regarding the Client’s participation in Securities Lending and 

Fee for Holds Arrangements: 

“Available Securities” means those securities held by GFTC for Client that 

may be used in the securities lending or fee for holds programs. Available 

Securities shall include all Account securities held by GFTC, except those 

securities that are specifically identified by written notice, acceptable 

to GFTC, as not being Available Securities. Available Securities shall 

not include those Account securities subject to a lien by a third party 

pursuant to an agreement (usually called a “control agreement”) to 

which GFTC has agreed. In the absence of such written notification, 

GFTC shall have no responsibility for determining whether any Account 

securities should be excluded from the definition of Available Securities 

and excluded from the securities lending program. 

“Borrower” means any of the entities to which Available Securities may 

be loaned under a Securities Loan Agreement. 

“Collateral” means collateral delivered by a Borrower to secure its 

obligations under a Securities Loan Agreement. 

“Loan” means a loan of Available Securities to a Borrower. 

“Loaned Security” shall mean any “security” which is delivered as a Loan 

under a Securities Loan Agreement; provided that, if any new or different 

security shall be exchanged for any Loaned Security by recapitalization, 

merger, consolidation, or other corporate action, such new or different 

security shall, effective upon such exchange, be deemed to become a 

Loaned Security in substitution for the former Loaned Security for which 

such exchange was made. 

“Market Value” of a security means the market value of such security 

(including, in the case of a Loaned Security that is a debt security, the 

accrued interest on such security) as determined by the independent 

pricing service designated by GFTC, or such other independent sources 

as may be selected by GFTC on a reasonable basis. 

“Replacement Securities” means securities of the same issuer, class 

and denomination as Loaned Securities. 

“Securities Loan Agreement” means the agreement between a Borrower 

and GFTC (on behalf of Client) that governs Loans. 

2. Appointment of GFTC as Agent for Securities Lending and Fee 

for Holds Arrangements. The Client hereby appoints and authorizes 

GFTC, its affiliates or subsidiaries, as its agent to lend Available 

Securities to Borrowers in accordance with the terms of this Agreement 

and its provisions regarding securities lending. GFTC shall have the 

responsibility and authority to do, or cause to be done, all acts that 

GFTC shall determine to be desirable, necessary, or appropriate to 

implement and administer this securities lending program. Client agrees 

that GFTC is acting as a fully disclosed agent and not as principal in 

connection with the securities lending program. GFTC may take action 

as agent of Client on an undisclosed or a disclosed basis. GFTC is also 

hereby authorized to request a third party to undertake certain custodial 

functions in connection with holding of the Collateral provided by a 

Borrower pursuant to the terms hereof. In connection therewith, GFTC 

may instruct said third party to establish and maintain a Borrower’s 

account and a GFTC account wherein all Collateral, including cash, shall 

be maintained by said third party in accordance with the terms of a form 

of custodial arrangement which shall also be consistent with the terms 

hereof. The fee from the Borrower shall be allocated between GFTC 

and Account with the Account being credited with 75% of the fee when 

received and GFTC retaining 25% of the fee. 

The Client also authorizes GFTC, its affiliates or subsidiaries, as its 

agent, to enter into “fee for holds arrangements” with respect to certain 

Available Securities. GFTC will, in return for a fee from the Borrower, hold 

and reserve certain Available Securities and to refrain from lending such 

Available Securities to any third party without the Borrower’s permission, 

provided, however, that the fee for holds arrangements shall not restrict 

or otherwise affect Client’s ownership rights with regard to the Available 

Securities. The fee from the Borrower shall be allocated between GFTC 

and Client’s Account with the Account being credited with 75% of the 

fee when received and GFTC retaining 25% of the fee. 

3. Securities Loan Arrangements. Client authorizes GFTC to enter 

into one or more Securities Loan Agreements with such Borrowers 

as may be selected by GFTC. GFTC may, subject to the terms of this 

Agreement and its provisions Regarding Securities Lending and Fee for 

Holds Arrangements and applicable law, borrow the Available Securities 

for its own account or loan it to an affiliate and it or its affiliate may 

have, as a result, a material interest with respect to that transaction. 

Any such transaction shall be an “arm’s length” transaction and shall be 

made otherwise in compliance with applicable law. Each Securities Loan 

Agreement shall have such terms and conditions as GFTC may negotiate 

with the Borrower. Certain terms of individual Loans, including rebate 

fees to be paid to the Borrower for the use of cash Collateral, shall be 

negotiated at the time a Loan is made and renegotiated from time to time 

as GFTC deems appropriate in GFTC’s sole discretion. 

4. Loans of Available Securities. GFTC shall be responsible for 

determining whether any Loans shall be made and shall have the 

authority to terminate any Loan in its discretion, at any time and without 

prior notice to the Client. 

Client acknowledges that GFTC administers securities lending programs 

for other Clients of GFTC. GFTC shall allocate securities lending 

opportunities among its Clients, using reasonable and equitable methods 

established by GFTC from time to time. GFTC does not represent 

or warrant that any amount or percentage of the Client’s Available 

Securities will in fact be loaned to Borrowers. The Client agrees that it 

shall have no claim against GFTC and GFTC shall have no liability based 

on or relating to loans made for other Clients, or loan opportunities 

refused hereunder, whether or not GFTC has made fewer or more loans 

for any other Client, and whether or not any loan for another Client, or 

the opportunity refused, could have resulted in loans made under this 

Agreement and its provisions Regarding Securities Lending and Fee for 

Holds Arrangements. 

The Client also acknowledges that, under the applicable Securities 

Loan Agreements, the Borrowers will not be required to return Loaned 

Securities immediately upon receipt of notice from GFTC terminating 

the applicable Loan, but instead will be required to return such Loaned 

Securities within such period of time following such notice as is specified 

in the applicable Securities Loan Agreement and in no event later than the 

end of the customary settlement period. Upon receiving a notice from 

Client that Available Securities which have been loaned to a Borrower 

should no longer be considered Available Securities, GFTC shall use its 

reasonable efforts to notify promptly thereafter the Borrower which has 

borrowed such securities that the Loan of such Available Securities is 

terminated and that such Available Securities are to be returned within 

the time specified by the applicable Securities Loan Agreement and in no 

event later than the end of the customary settlement period. 

5. Distributions on and Voting Rights with Respect to Loaned 

Securities. Client represents and warrants that it is the beneficial 

owner of all Available Securities, free and clear of all liens, claims, 

security interests and encumbrances, and that it is entitled to receive 

all distributions made by the issuer with respect to Loaned Securities. 

Except as may be provided in the Securities Loan Agreements, all 

interest, dividends, and other distributions paid with respect to Loaned 

Securities shall be credited to Client’s Account on the payable date and 

any non-cash distribution on Loaned Securities, which is in the nature of 

a stock split or a stock dividend, shall be added to the Loan (and shall be 


considered to constitute Loaned Securities) as of the date such non-cash 

distribution is received by the Borrower. Client acknowledges that they 

will not he entitled to participate in any dividend reinvestment program, 

and that neither they nor their Investment Manager will be able to vote 

Available Securities that are on loan as of the applicable record date for 

such Available Securities. 

Client also acknowledges that payments of distributions from Borrower 

to are in substitution for the interest or dividend accrued or paid in 

respect of Loaned Securities and that the tax and accounting treatment 

of such payments may differ from the tax and accounting treatment of 

such interest or dividend. Reports of substitute interest and dividends as 

well as other distributions will be provided to Client by GFTC. 

6. Collateral to Secure Obligations of Borrowers. 

(a) Receipt of Collateral. Client hereby authorizes GFTC, or a third 

party, to receive and hold Collateral from Borrowers to secure 

the obligations of Borrowers with respect to any Loan of 

Available Securities. All investments of cash Collateral shall be 

for the Account and at the risk of Client. Concurrently with, or 

prior to the delivery of, the Loaned Securities to the Borrower, 

GFTC shall receive from the Borrower Collateral in a form 

acceptable to GFTC. 

(b) 

(c) 

(d) 

The initial Collateral received shall (1) in the case of Loaned 

Securities denominated in United States Dollars or whose 

primary trading market is located in the United States or 

sovereign debt issued by foreign governments, have a value 

of 102% of the Market Value of the Loaned Securities, plus 

accrued interest, if any, on debt securities or (2) in the case 

of Loaned Securities which are not denominated in United 

States Dollars or whose primary trading market is not located 

in the United States, have a value of 105% of the Market Value 

of the Loaned Securities, plus accrued interest, if any, on 

debt securities or (3) have such other higher value as may be 

applicable in the jurisdiction in which such Loaned Securities 

are customarily traded. 

Marking to Market. GFTC shall value all Loaned Securities 

on a daily basis in accordance with its customary practice. 

To the extent any additional Collateral is required, GFTC shall 

credit such additional Collateral to GFTC’s Securities Lending 

Collateral account for the benefit of Client on the day such 

Collateral is received from the Borrower. 

Return of Collateral. The Collateral shall be returned to 

Borrower at the termination of the Loan upon the return of the 

Loaned Securities by Borrower to GFTC in accordance with the 

applicable Securities Loan Agreement. 

Limitations. GFTC shall exercise reasonable care, skill, 

diligence and prudence in the investment of Collateral. Subject 

to the foregoing limits and standard of care, GFTC does not 

assume any market or investment risk of loss with respect 

to the investment of cash Collateral. If the value of the cash 

Collateral so invested is insufficient to return any and all other 

amounts due to such Borrower pursuant to the Securities Loan 

Agreement, Account shall be responsible for such shortfall. 

7. Investment of Cash Collateral and Compensation. To the extent 

that a Loan is secured by cash Collateral, such cash Collateral, including 

money received with respect to the investment of the same, or upon the 

maturity, sale, or liquidation of any such investments, shall be invested 

by GFTC as agent for the Client. The Client acknowledges and agrees 

that GFTC is acting as agent on the Client’s behalf in connection with 

the investment of cash received as Collateral and that neither GFTC nor 

any of its affiliates acts as investment adviser to the Client with respect 

to the investment of the Collateral. The Client understands that the Client 


Page 7 of 8 



bears the risk of investment loss, including any decline in value of the 

Collateral investments. 

In the event the net income generated by any investment made pursuant 

to the above paragraph does not equal or exceed the amount due the 

Borrower (the rebate fee for the use of cash Collateral) in accordance 

with the agreement between Borrower and GFTC, the rebate fee shall 

be renegotiated or the Loan(s) shall be terminated and the Loaned 

Securities recalled by GFTC. 

To the extent that a Loan is secured by non-cash Collateral, the Borrower 

shall be required to pay a loan premium, the amount of which shall be 

negotiated by GFTC. Such loan premium shall be allocated between 

GFTC and Client’s Account with the Account being credited with 75% of 

the fee when received and GFTC retaining 25% of the fee. 

Client hereby agrees that it shall reimburse GFTC for any and all funds 

advanced by GFTC on behalf of Client as a consequence of Client’s 

obligations hereunder, including Client’s obligation to return cash 

Collateral to the Borrower and to pay any fees due the Borrower. 

8. Recordkeeping and Reports. GFTC will establish and maintain such 

records as are reasonably necessary to account for Loans that are made 

and the income derived there from. GFTC will provide Client with a 

statement describing the Loans made, and the income derived from the 

Loans, during the period covered by such statement. 

9. Limitations on GFTC’s Liability and Standard of Care. The 

limitations on GFTC’s liability and the indemnification obligations of the 

Client Owner set forth in the provisions of this Agreement regarding 

Securities Lending and Fee for Holds Arrangements are in addition to, 

and are intended to supplement, the limitations on GFTC’s liability and 

the indemnification obligations of the Client otherwise set forth in the 

Client’s GFTC Custody Agreement. 

Subject to the requirements of applicable law, GFTC shall not be liable for 

and Account Owner shall indemnify GFTC, its affiliates and their officers, 

directors, shareholders, agents and employees against, any losses, 

damages or expenses resulting from any action or inaction by GFTC or by 

any third party, except for losses resulting from GFTC’s gross negligence, 

reckless disregard, willful misconduct or bad faith. The Client agrees to 

reimburse and hold GFTC harmless from and against any liability, loss 

and expense, including counsel and attorneys fees, expenses and 

court costs, arising from or in connection with: (i) any breach of any 

representation, covenant or agreement of the Client contained in the 

provisions of this Agreement regarding Securities Lending and Fee for 

Holds Arrangements or any Loan; (ii) claims of any third parties, including 

any Borrower; (iii) all taxes and other governmental charges; and (iv) 

any out-of-pocket or incidental expenses. GFTC may, upon notice and 

with proper supporting documentation, charge any amounts to which it 

is entitled hereunder against the Client’s Account. Without limiting the 

generality of the foregoing, the Client agrees: (i) that GFTC shall not be 

responsible for any statements, representations or warranties which 

any Borrower makes in connection with any securities loans hereunder, 

or for the performance by any Borrower of the terms of a Loan, or any 

agreement related thereto, and shall not be required to ascertain or 

inquire as to the performance or observance of, or a default under the 

terms of, a Loan or any agreement related thereto; (ii) that GFTC shall be 

fully protected in acting in accordance with the oral or written instructions 

of any person reasonably believed by GFTC to be authorized to execute 

this Agreement on behalf of Client (an “Authorized Person”); (iii) that in 

the event of a default by a Borrower under a Loan, GFTC shall be fully 

protected in acting in its sole discretion in a manner it deems appropriate; 

(iv) that GFTC shall not be under any duty or obligation to take action to 

effect payment by a Borrower of any amounts owed by the Borrower 

pursuant to the Loan Agreement, provided GFTC timely advises the 

Client of the non-payment by the Borrower of any such amount; and 

(v) that the records of GFTC shall be presumed to reflect accurately any 


oral instructions given by an Authorized Person or a person reasonably 

believed by GFTC to be an Authorized Person. 

The Client acknowledges that, in the event that their participation 

in securities lending generates income for the Client, GFTC may be 

required to withhold tax or may claim such tax as is appropriate in 

accordance with applicable law. 

GFTC, in determining the Market Value of Securities, including without 

limitation, Collateral, may rely upon any recognized pricing service and 

shall not be liable for any errors made by such service. 

10. Indemnification by GFTC. 

(a) If at the time of a default by a Borrower with respect to a 

Loan (within the meaning of the applicable Securities Loan 

Agreement), some or all of the Loaned Securities under such 

Loan have not been returned by the Borrower, and subject to 

the terms of this Agreement, GFTC shall indemnify the Client 

against the failure of the Borrower as follows. GFTC shall 

purchase a number of Replacement Securities equal to the 

number of such unreturned Loaned Securities, to the extent 

that such Replacement Securities are available on the open 

market. Such Replacement Securities shall be purchased by 

applying the proceeds of the Collateral with respect to such 

Loan to the purchase of such Replacement Securities. Subject 

to the Client’s obligations hereunder, if and to the extent that 

such proceeds are insufficient or the Collateral is unavailable, 

the purchase of such Replacement Securities shall be made at 

GFTC’s expense. 

(b) 

(c) 

(d) 

(e) 

If GFTC is unable to purchase Replacement Securities pursuant 

to the above provisions (in paragraph (a)), GFTC shall credit 

the Client’s Account an amount equal to the Market Value 

of the unreturned Loaned Securities for which Replacement 

Securities are not so purchased, determined as of (i) the 

last day the Collateral continues to be successfully marked 

to market by the Borrower against the unreturned Loaned 

Securities; or (ii) the next business day following the day 

referred to in (i) above, if higher. 

In addition to making the purchases or credits required above 

(by paragraphs (a) and (b)), GFTC shall credit to Client’s 

Account the value of all distributions on the Loaned Securities 

(not otherwise credited to Client’s Account(s) with GFTC), for 

record dates which occur before the date that GFTC purchases 

Replacement Securities pursuant to the above provisions (in 

paragraph (a)) or credits Client’s account pursuant to the above 

provisions (in paragraph (b)). 

Any credits required under the above provisions (in paragraphs 

(b) and (c)) shall be made by application of the proceeds 

of the Collateral, if any, that remains after the purchase 

of Replacement Securities as provided above (pursuant to 

paragraph (a)), if and to the extent that the Collateral is 

unavailable or the value of the proceeds of the remaining 

Collateral is less than the value of the sum of the credits 

required to be made as provided above (under paragraphs (b) 

and (c)), such credits shall be made at GFTC’s expense. 

If after application of the above provision (in paragraphs (a) 

through (d)), additional Collateral remains or any previously 

unavailable Collateral becomes available or any additional 

amounts owed by the Borrower with respect to such Loan are 

received from the Borrower, GFTC shall apply the proceeds of 

such Collateral or such additional amounts first to reimburse 

itself for any amounts expended by GFTC pursuant to the 

above provisions (in paragraphs (a) through (d) above), and then 

to credit to the Client’s Account all other amounts owed by the 

R239_GFTCCustAgree (2010/04) 

(f) 

(g) 


Page 8 of 8 



Borrower to the Client with respect to such Loan under the 

applicable Securities Loan Agreement. 

In the event that GFTC is required to make any payment and/ 

or incur any loss or expense under this Section, GFTC shall, to 

the extent of such payment, loss, or expense, be subrogated 

to, and succeed to, all of the rights of the Client against the 

Borrower under the applicable Securities Loan Agreement. 

These provisions shall not apply to losses attributable to war, 

riot, revolution, acts of government or other causes beyond the 

reasonable control or apprehension of GFTC. 

11. Continuing Agreement and Termination of Provisions of 

Agreement Regarding Securities Lending and Fee for Holds 

Arrangements. It is the intention of the parties hereto that the provisions 

of Exhibit B of this Agreement, regarding Securities Lending and Fee for 

Holds Arrangements, shall constitute a continuing agreement in every 

respect and shall apply to each and every Loan, whether now existing 

or hereafter made. The Client and GFTC may each at any time terminate 

this portion of the Agreement regarding Securities Lending and Fee for 

Holds Arrangements, upon five (5) business days’ written notice to the 

other to that effect. The only effects of any such termination of this 

portion of the Agreement regarding Securities Lending and Fee for Holds 

Arrangements, will be that (a) following such termination, no further 

Loans shall be made hereunder by GFTC on behalf of the Client, and (b) 

GFTC shall, within a reasonable time after termination of this Agreement, 

terminate any and all outstanding Loans. The provisions hereof shall 

continue in full force and effect in all other respects until all Loans have 

been terminated and all obligations satisfied as herein provided. GFTC 

does not assume any market or investment risk of loss associated with 

the Client’s change in cash Collateral investment vehicles or termination 

of, or change in, its participation in this securities lending program and 

the corresponding liquidation of cash Collateral investments. 

12. Securities Investors Protection Act of 1970 Notice. THE CLIENT 

IS HEREBY ADVISED AND ACKNOWLEDGES THAT THE PROVISIONS 

OF THE SECURITIES INVESTOR PROTECTION ACT OF 1970 MAY NOT 

PROTECT THE CLIENT WITH RESPECT TO THE LOAN OF SECURITIES 

HEREUNDER AND THAT, THERFORE, THE COLLATERAL DELIVERED 

TO GFTC MAY CONSTITUTE THE ONLY SOURCE OF SATISFACTION 

OF THE BROKER’S OR DEALER’S OBLIGATION IN THE EVENT THE 

BROKER OR DEALER FAILS TO RETURN THE SECURITIES 

Genworth Financial 

Trust Company 

3200 N. Central Avenue 

7th Floor 

Phoenix, AZ 85012 

800 664.5345 

©2010 Genworth Financial, 

Inc. All rights reserved. 

Genworth, Genworth Financial 

and the Genworth logo are 

service marks of Genworth 

Financial, Inc.

GFTC IRA custodial Agreement / ira Disclosure statement 

GFTC Ira custodial agreement/ 

ira disclosure statement 

(for IRA and ROTH IRA accounts only)

GFTC IRA Custodial Agreement 

Page 1 of 16 



Form 5305-A under Section 408(a) of the Internal Revenue Code 

• The Depositor, whose name appears on the attached Application, 

is establishing Individual Retirement Account under section 408(a) 

to provide for his or her retirement and for the support of his or her 

beneficiaries after death. 

• The Custodian, Genworth Financial Trust Company, named on 

the attached Application has given the Depositor the disclosure 

statement required under Regulations Section 1.408-6. 

• The Depositor has assigned to the Custodial Account the sum 

indicated on the Application. 

• The Depositor and the Custodian make the following agreement. 

Article I 

Except in the case of a rollover contribution described in Section 

402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16), an employee 

contribution to a simplified employee pension plan as described in 

section 408(k), or a recharacterized contribution described in section 

408A(d)(6), the Custodian will accept only cash contributions up to 

$3,000 per year for tax years 2002 through 2004. That contribution 

limit is increased to $4,000 for tax years 2005 through 2007 and 

$5,000 for 2008 and thereafter. For individuals who have reached 

the age of 50 before the close of the taxable year, the contribution 

limit is increased to $3,500 per year for tax years 2002 through 

2004, $4,500 for 2005, $5,000 for 2006 and 2007, and $6,000 for 

2008 and thereafter. For tax years after 2008, the above limits will 

be increased to reflect a cost-of-living adjustment, if any. 

Article II 

The Depositor's interest in the balance in the Custodial Account is 

non forfeitable. 

Article III 

1. No part of the Custodial Account funds may be invested in life 

insurance contracts, nor may the assets of the Custodial Account 

be commingled with our property except in a common trust fund 

or common investment fund (within the meaning of Section 408(a) 

(5)). 

2. No part of the Custodial Account funds may be invested in 

collectibles (within the meaning of Section 408(m)) except as 

otherwise permitted by Section 408(m)(3) which provides an 

exception of certain gold and silver coins and coins issued under 

the laws of any state. 

Article IV 

1. Notwithstanding any provision of this agreement to the contrary, 

the distribution of the Depositor's interest in the Custodial Account 

shall be made in accordance with the following requirements and 

shall otherwise comply with Section 408(a)(6) and the regulations 

thereunder, the provisions of which are herein incorporated by 

reference. 

2. The Depositor's entire interest in the Custodial Account must be, 

or begin to be, distributed not later than the Depositor's required 

beginning date, April 1 following the calendar year in which the 

depositor reaches age 70½. By that date, the Depositor may elect, 

in a manner acceptable to the Custodian, to have the balance in the 

Custodial Account distributed in: 

(a) 

(b) 

A single sum or 

Payments over a period not longer than the life of the 

Depositor or the joint lives of the Depositor and his or her 

designated beneficiary. 

3. If the Depositor dies before his or her entire interest is distributed 

to him or her, the remaining interest will be distributed as follows: 

(a) 

If the Depositor dies on or after the required beginning date 

and: 

(i) 

R140_GFTC_IRACustDisc (2009/10) 

the designated beneficiary is the Depositor's surviving 

spouse, the remaining interest will be distributed over 

(b) 

(ii) 

the surviving spouse's life expectancy as determined 

each year until such spouse's death, or over the period in 

paragraph (a)(iii) below if longer. Any interest remaining 

after the spouse's death will be distributed over such 

spouse's remaining life expectancy as determined in the 

year of the spouse's death and reduced by 1 for each 

subsequent year, or, if distributions are being made over 

the period in paragraph (a)(iii) below, over such period. 

the designated beneficiary is not the Depositor's surviving 

spouse, the remaining interest will be distributed over the 

beneficiary's remaining life expectancy as determined in 

the year following the death of the Depositor and reduced 

by 1 for each subsequent year, or over the period in 

paragraph (a)(iii) below if longer. 

(iii) there is no designated beneficiary, the remaining interest 

will be distributed over the remaining life expectancy of 

the Depositor as determined in the year of the Depositor's 

death and reduced by 1 for each subsequent year. 

if the Depositor dies before the required beginning date, the 

remaining interest will be distributed in accordance with (i) 

below or, if elected or there is no designated beneficiary, in 

accordance with (ii) below: 

(i) 

(ii) 

The remaining interest will be distributed in accordance 

with paragraphs (a)(i) and (a)(ii) above (but not over the 

period in paragraph (a)(iii), even if longer), starting by 

the end of the calendar year following the year of the 

Depositor's death. If, however, the designated beneficiary 

is the Depositor's surviving spouse, then this distribution 

is not required to begin before the end of the calendar 

year in which the Depositor would have reached age 70½. 

But, in such case, if the Depositor's surviving spouse 

dies before distributions are required to begin, then 

the remaining interest will be distributed in accordance 

with (a)(ii) above (but not over the period in paragraph 

(a)(iii), even if longer), over such spouse's designated 

beneficiary's life expectancy, or in accordance with (ii) 

below if there is not such designated beneficiary. 

The remaining interest will be distributed by the end of 

the calendar year containing the fifth anniversary of the 

Depositor's death. 

4. If the Depositor dies before his or her entire interest has been 

distributed and if the designated beneficiary is not the Depositor's 

surviving spouse, no additional contributions may be accepted in 

the account. 

5. The minimum amount that must be distributed each year, beginning 

with the year containing the Depositor's required beginning date, is 

known as the “required minimum distribution” and is determined 

as follows: 

(a) 

(b) 

The required minimum distribution under paragraph 2(b) 

for any year, beginning with the year the depositor reaches 

age 70½, is the depositor's account value at the close of 

business on December 31 of the preceding year divided 

by the distribution period in the uniform lifetime table in 

Regulations section 1.401(a)(9)-9. However, if the Depositor's 

designated beneficiary is his or her surviving spouse, the 

required minimum distribution for a year shall not be more 

than the Depositor's account value at the close of business on 

December 31 of the preceding year divided by the number in 

the joint and last survivor table in Regulations section 1.409(a) 

(9)-9. The required minimum distribution for a year under 

this paragraph (a) is determined using the Depositor's (or, if 

applicable, the Depositor and spouse's) attained age (or ages) 

in the year. 

The required minimum distribution under paragraphs 3(a) and 

3(b)(i) for a year, beginning with the year following the year of 

the Depositor's death (or the year the Depositor would have 

reached age 70½, if applicable under paragraph 3(b)(i)) is the

GFTC IRA Custodial Agreement—continued from page 1 

(c) 

account value at the close of business on December 31 of the 

preceding year divided by the life expectancy (in the single 

life table in Regulations section 1.401(a)(9)-9) of the individual 

specified in such paragraphs 3(a) and 3(b)(i). 

The required minimum distribution for the year the Depositor 

reaches age 70½ can be made as late as April 1 of the 

following year. The required minimum distribution for any other 

year must be made by the end of such year. 

6. The owner of two or more traditional IRAs may satisfy the 

minimum distribution requirements described above by taking from 

one traditional IRA the amount required to satisfy the requirement 

for another in accordance with the regulations under section 408(a) 

(6). 

Article V 

1. The Depositor agrees to provide the Custodian with information 

necessary for the Custodian to prepare any reports required under 

Section 408(l) and Regulations Sections 1.408-5 and 1.408-6. 

2. The Custodian agrees to submit reports to the Internal Revenue 

Service and the Depositor as prescribed by the Internal Revenue 

Service. 

Article VI 

Notwithstanding any other articles which may be added or 

incorporated, the provisions of Articles I through III and this 

sentence will be controlling. Any additional articles that are not 

consistent with section 408(a) and related regulations will be 

invalid. 

Article VII 

This Agreement will be amended from time to time to come the 

provisions of the Code and related regulations. Other amendments 

may be made with the consent of the persons whose signatures 

appear on the prior agreement. 

Article VIII 

1. IRA Custodial Agreement supplements GFTC Custodial 

Account Agreement: This IRA Custodial Agreement supplements 

and is supplemented by the GFTC Custodial Account Agreement, 

and the terms of the GFTC Custodial Account Agreement shall also 

apply to the Custodial Account, to the extent they do not conflict 

with the terms of this IRA Custodial Agreement. 

2. Definitions and section references: The words “you” and 

“your” mean the “Depositor.” The “Depositor” is referred to as 

the “Account Owner” in the GFTC Custodial Account Agreement. 

The words “we”, “us”, and “our” mean the Custodian, Genworth 

Financial Trust Company, which is referred to as GFTC in the GFTC 

Custodial Account Agreement. “Custodial Account” is the Individual 

Retirement Accounts or IRA, established by this Agreement. 

“Code” means the Internal Revenue Code. Section references are 

to the Code unless otherwise noted. 

3. Contributions made by deposit of tax refund: In addition to the 

contribution types referenced in Article I, we will also accept the 

deposit of federal income tax refunds, as provided in Section 830 

of the Pension Protection Act of 2006, as the equivalent of cash 

contributions to your IRA. 

4. Additional contributions in special cases. 

(a) 

(b) 

In addition to cash contributions references in Article I, we will also 

accept recontribution of qualified reservist distributions as provided 

in Code Section 72(t)(2)(G)(ii). 

For an applicable individual, in lieu of the catch-up contributions 

referenced in Article I, we will accept contributions described 

in Code Section 219(b)(5)(C), as amended by Section 831 of the 

Pension protection Act of 2006. 

5. Investment of amounts in the IRA: 

(a) 

You shall have exclusive responsibility for the investment of your 

IRA. 

(b) 

(c) 


Page 2 of 16 


Custodian GFTC shall have no responsibility for the investment 

of your IRA. Custodian GFTC shall have no discretion to direct 

any investment in your IRA. GFTC assumes no responsibility for 

rendering investment advice with respect to your IRA, nor will 

GFTC offer any opinion or judgment to you on matters concerning 

the advisability or suitability of any investment or proposed 

investment for your IRA. 

You may delegate your investment responsibility for your IRA 

to another party acceptable to us, such as an Advisor providing 

investment advice through the AssetMark Investment Services 

Program. To the extent that the assets of the IRA are subject to 

an investment advisory arrangement, such as a Client Services 

Agreement (“CSA”), the terms of that arrangement or CSA shall 

apply to the investment of those assets (the “advised assets”). 

Custodian has no responsibility to review or question, nor shall 

we be responsible for, the directions of an investment adviser to 

the IRA. To the extent that there exist assets in the IRA that are 

not subject to an investment advisory arrangement or CSA, you 

shall remain exclusively responsible for the investment of those 

assets (the “non-advised assets”) and the terms of your custodial 

agreement with Custodian GFTC applicable to non-advised assets 

shall apply. 

6. Beneficiaries: If you die before you receive all of the amounts 

in your IRA, payments from your IRA will be made to your 

beneficiaries. You may designate one or more person(s) or entity 

as beneficiary of your IRA. This designation can only be made on a 

form acceptable by us and it will only be effective when it is filed 

with and accepted by us during your lifetime. Each beneficiary 

designation accepted by us will cancel any previous designation. 

The consent of a beneficiary shall not be required for you to revoke 

a beneficiary designation. If you do not designate a beneficiary, your 

estate will be the beneficiary. 

Upon your death, your designated beneficiary may elect to receive 

distributions over his or her life expectancy and may elect to 

designate his or her own beneficiary to receive any remaining Roth 

IRA amounts upon the designated beneficiary’s death. 

If the beneficiary payment election described in Article IV, Section 

3(b) of this Agreement is not made by December 31 of the year 

following the year of your death, however, then the payment 

described in Section 3(b)(ii) will be deemed elected (that is the 

remaining interest will be distributed by the end of the calendar year 

containing the fifth anniversary of the Depositor’s death). If your 

designated beneficiary is your spouse, however, then distributions 

over your spouse’s life expectancy need not commence until 

December 31 of the year you would have attained age 70½, if 

later. 

7. Termination: Either party may terminate this Agreement at 

any time by giving written notice to the other. We can resign as 

Custodian at any time effective 30 days after we mail written notice 

of our resignation to you. Upon receipt of that notice, you shall make 

arrangements to transfer your IRA to another financial organization 

or accept payment of your IRA. If you do not complete a transfer 

of your IRA within 30 days from the date we mail the notice to 

you, we have the right to transfer your IRA assets to a successor 

IRA custodian or trustee that we choose in our sole discretion or 

we may pay your IRA to you in a single sum. We shall not be liable 

for any actions or failure to act on your part or on the part of any 

successor custodian or trustee nor for any tax consequences you 

may incur that result from the transfer or distribution of your assets 

pursuant to this Section. If this agreement is terminated, we may 

hold back from your IRA a reasonable amount of money that we 

believe is necessary to cover any one or more of the following: 

• any fees, expenses or taxes chargeable against your IRA; 

• any penalties associated with the early withdrawal of any 

savings instrument or other investment in your IRA. 

If our organization is merged with another organization (or comes 

under the control of any Federal or State agency), or if our 

entire organization (or any portion which includes your IRA) is 

R140_GFTC_IRACustDisc (2009/10)

GFTC IRA Custodial Agreement—continued from page 2 


Page 3 of 16 


bought by another organization, that organization (or agency) shall 

automatically become the Trustee or Custodian of your IRA, but 

only if it is the type of organization authorized to serve as an IRA 

trustee or custodian. 

10. Effectiveness and amendments: Your IRA is established after 

you have executed the application and GFTC has accepted the 

account. This account must be created in the United States for the 

exclusive benefit of you and your beneficiaries. Contributions to an 

IRA custodial account for a non-working spouse must be made to 

a separate IRA custodial account established by the non-working 

spouse. 

We have the right to amend this Agreement at any time. Any 

amendment we make to comply with the Code and related 

regulations does not require your consent. You will be deemed to 

have consented to any other amendment unless, within 30 days 

from the date we mail the amendment, you notify us in writing that 

you do not consent. 

11. Withdrawals: All requests for withdrawals shall be in writing on a 

form provided by or acceptable to us. The method of distribution 

must be specified in writing. The tax identification number of the 

recipient must be provided to us before we are obligated to make 

a distribution. Any withdrawals shall be subject to all applicable tax 

and other laws and regulations including possible early withdrawal 

penalties and withholding requirements. 

12. Required minimum distributions: We will not be liable for any 

penalties or taxes related to your failure to take a distribution. 

13. Transfers from other plans: We can receive amounts transferred 

to this IRA from the custodian or trustee of another IRA. In 

addition, we can accept direct rollovers of eligible distributions from 

employer plans as permitted by the Code. We reserve the right not 

to accept any transfer or direct rollover. 

14. Liquidation of assets: We have the right to liquidate assets in your 

IRA if necessary to make distributions or to pay fees, expenses 

or taxes properly chargeable against your IRA. If you fail to tell 

us which assets to liquidate, we will decide at our complete and 

sole discretion and you agree not to hold us liable for any adverse 

consequences that result from our decision. 

15. Restrictions on the IRA: Neither you nor any beneficiary may 

sell, transfer or pledge any interest in your IRA in any manner 

whatsoever, except as provided by law or this Agreement. The 

assets in your IRA shall not be responsible for debts, contracts 

or torts of any person entitled to distributions by law or this 

Agreement. 

16. Governing law, severability: This agreement is subject to all 

applicable federal and state laws and regulations. If it is necessary 

to apply any governing law to interpret and administer this 

Agreement, the law of our domicile, Arizona, shall govern. If any 

part of this Agreement is held to be illegal or invalid, the remaining 

parts shall not be affected. Neither you nor our failure to enforce 

at any time or for any period of time any of the provisions of this 

Agreement shall be construed as a waiver of such provisions, or 

your right or our right thereafter to enforce each and every such 

provision. 


GFTC IRA Disclosure Statement 

Page 4 of 16 



Right to revoke your IRA 

If you receive this Disclosure Statement at the time you establish 

your IRA, you have the right to revoke your IRA within seven (7) days 

of its establishment. If revoked, you are entitled to a full return of 

the contribution you made to your IRA. The amount returned to you 

would not include an adjustment for such items as sales commissions, 

administrative expenses, or fluctuation in market value. You may make 

this revocation only by mailing or delivering a written notice to GFTC at 

the address listed on the attached Application. 

If you send your notice by first class mail, your revocation will be deemed 

mailed as of the date of the postmark. 

If you have any questions about the procedure for revoking your IRA, 

please call GFTC at the telephone number listed on the attached 

Application. 

Requirements of an IRA 

A. Eligibility - If it is not the year in which you will reach age 70½ 

and you earned income from services rendered, you may make a 

contribution to your IRA, subject to certain limitations described in 

this Disclosure Statement. 

B. Cash contributions - Your contribution must be in cash, unless it 

is a rollover contribution. Beginning in 2007, the Pension Protection 

Act of 2006 authorizes you to direct the Internal Revenue Service to 

deposit all or a portion of any federal income tax refund you would 

otherwise receive in your IRA. We will treat any such deposit as a 

cash contribution subject to the IRA rules, including rules on timing 

and deductibility of contributions, described below. 

C. Maximum contribution - The total amount you may contribute to 

an IRA for any taxable year cannot exceed the lesser of 100 percent 

of your compensation or $3,000 for years 2002-2004, $4,000 for 

years 2005-2007, and $5000 for 2008 with possible cost-of- living 

adjustments in years 2009 and beyond. If you also maintain a Roth 

IRA, the maximum contribution to your traditional IRAs [i.e., IRAs 

subject to Internal Revenue Code (IRC) Sections 408(a) or 408(b)] 

is reduced by any contributions you make to your Roth IRA. Your 

total contribution to all traditional IRA's and Roth IRA's cannot 

exceed the lesser of the applicable limit mentioned previously or 

100 percent of your compensation. 

D. Rollover contributions - You may make rollover contributions to 

your IRA without regard to any of the contribution limits described 

in this Disclosure Statement. See "Portability of IRA Assets" for 

more information. 

E. Catch-up contribution - If you are age 50 or older by the close of 

the taxable year, you may make an additional contribution to your 

traditional IRA of $500 for years 2002- 2005 and $1,000 for years 

2006 and beyond. 

For each year in 2007-2009 after the year in which the following 

conditions enacted by the Pension Protection Act of 2006 

are satisfied, applicable individuals may make additional IRA 

contributions of up to $3,000 per year. Applicable individuals must 

have participated in the section 401(k) plan of an employer that had 

matched at least 50% of employee contributions with employer 

stock and was (or its controlling corporation was) a debtor in a 

bankruptcy case. The employer or another person must have been 

subject to an indictment or conviction resulting from business 

transactions related to the bankruptcy. The employee must have 

been a plan participant on the date 6 months before the bankruptcy 

case was filed. Any such contributions would be in lieu of Catch-up 

contributions based on your age, as described above. 

F. Recontribution of a qualified reservist distribution – A qualified 

reservist distribution may be recontributed to an IRA during the 

2-year period beginning on the latter of i) day after the end of the 

active—duty period and ii) August 17, 2008. Under the Pension 

Protection Act of 2006, effective for distributions to reservists called 

to active duty after September 11, 2001 and before December 31, 

2007, a qualified reservist distribution is an IRA distribution taken 

by a member of a reserve component of the United States armed 

forces who is ordered or called to active duty for a period in excess 

of 179 days or indefinitely. 

G. Non-forfeitability - Your interest in your IRA is non forfeitable. 

H. Eligible - The custodian of your IRA must be a bank, savings 

and loan association, credit union, or a person approved by the 

Secretary of the Treasury. 

I. Commingling assets - The assets of your IRA cannot be 

commingled with other property except in a common trust fund or 

common investment fund. 

J. Life Insurance - No portion of your IRA may be invested in life 

insurance contracts. 

K. Collectibles - You may not invest the assets of your IRA in 

collectibles (within the meaning of Internal Revenue code (IRC) 

Section 408(m)). A collectible is defined as any work of art, rug or 

antique, metal or gem, stamp or coin, alcoholic beverage, or any 

other tangible personal property specified by the Internal Revenue 

Service. Specially minted United States platinum, gold, and silver 

bullion coins, palladium bullion and certain state-issued coins are 

permissible IRA investments. 

L. Required minimum distribution calculations - You are required 

to take minimum distributions from your IRA at certain time in 

accordance with Treasury Regulations Section 1.408-8. Failure to 

take required minimum distributions from your IRA may subject to 

an Excess Accumulation penalty, described later in this Disclosure 

Statement under Federal Tax Penalties. Below is a summary of the 

IRA distribution rules. 

1. You are required to take a minimum distribution from your 

IRA for the year in which you reach age 70½ and each year 

thereafter. You must take your first payout by your required 

beginning date, April 1 of the year following the year you attain 

age 70½. The minimum distribution for any taxable year is 

equal to the amount obtained by dividing the account balance 

at the end of the prior year by the applicable divisor. 

2. The applicable divisor is generally determined using the 

Uniform Lifetime Table. The table assumes a beneficiary 

exactly 10 years younger than you regardless of who is the 

named beneficiary. 

If your spouse is your sole beneficiary and is more than 10 

years younger than you, the required minimum distribution 

may be calculated using the actual joint life expectancy of 

you and your spouse from the Joint Life and Last Survivor 

Expectancy Table, rather than the life expectancy divisor from 

the Uniform Lifetime Table. 

We reserve the right to make no payment until you give us a 

proper payout request. 

3. Your designated beneficiary is determined based on the 

beneficiary(ies) designated as of the date of your death and 

who remains your beneficiary (ies) as of September 30 of the 

year following the year of your death. If you die, 

a. On or after your required beginning date, distributions 

must be made to your beneficiary or beneficiaries 

over the longer of the single life expectancy of your 

designated beneficiary or beneficiaries, or your remaining 

life expectancy. 

b. Before your required beginning date, the entire amount 

remaining in your account will, at the election of your 

beneficiary or beneficiaries, either 

i. Be distributed by December 31 of the year containing 

the fifth anniversary of your death, or 

ii. 

Be distributed in equal or substantially equal 


GFTC IRA Disclosure Statement—continued from page 4 

payments over the life or life expectancy of your 

designated beneficiary or beneficiaries. 

Your beneficiary or beneficiaries must elect either option 

(i) or (ii) by December 31 of the year following the year of 

your death. If no election is made, distribution will be made 

in accordance with (i). In the case of distributions under 

(ii), distributions must commence by December 31 of the 

year following the death. If your spouse is the beneficiary, 

distributions need not commence until December 31 of the 

year you would have attained age 70½, if later. If a beneficiary 

(ies) other than an individual or qualified trust as defined 

by the Regulations is named, you will be treated as having 

no designated beneficiary(ies) of your IRA for purposes of 

determining the distribution period. If there is no designated 

beneficiary of your IRA, the entire IRA must be distributed by 

December 31 of the year containing the fifth anniversary of 

your death. 

A spouse who is the sole designated beneficiary of your entire 

IRA may elect to redesignate your IRA as his or her own. 

Alternatively, the sole spouse beneficiary will be deemed to 

elect to treat your IRA as his or her own by either (1) making 

contributions to your IRA or (2) failing to timely remove a 

required minimum distribution from your IRA. Regardless of 

whether or not your spouse is the sole beneficiary of your 

IRA, a spouse beneficiary may roll over his or her share of the 

assets to his or her own IRA. 

4. A Qualified Charitable Distribution, described below, will count 

towards satisfying applicable minimum required distributions. 

5. These transactions are often complex. If you have any 

questions regarding required minimum distributions, please 

see a competent tax advisor. 

Income tax consequences of establishing an IRA 

A. IRA deductibility calculations - If you have not yet reached the 

year in which you attain age 70½ and have earned income from 

services rendered, you may make an IRA contribution of the lesser 

of 100 percent of compensation or $3,000 for years 2002- 2004, 

$4,000 for years 2005-2007, and $5,000 for 2008 with possible 

cost-of-living adjustments in years 2009 and beyond. However, the 

amount of the contribution for which you may take a tax deduction 

will depend upon whether you (or, in some cases, your spouse) are 

an active participant in an employer-maintained retirement plan. 

If you (and your spouse, if married) are not an active participant, 

your IRA contribution will be totally deductible. If you are an active 

participant (or are married to an active participant), the deductibility 

of your contribution will depend on your modified adjusted gross 

income (MAGI) for the tax year for which the contribution was 

made. MAGI is determined on your tax return using your adjusted 

gross income but disregarding any deductible IRA contribution. 

Definition of Active Participant. Generally, you will be an active 

participant if you are covered by one or more of the following 

employer-maintained retirement plans: 

1. a qualified pension, profit sharing, 401(k), or stock bonus 

plan; 

2. a qualified annuity plan of an employer; 

3. a simplified employee pension (SEP) plan; 

4. a retirement plan established by the Federal government, 

5. a State, or a political subdivision (except certain unfounded 

deferred compensation plans under IRC Section 457); 

6. a tax sheltered annuity for employees of certain tax-exempt 

organizations or public schools; 

7. a plan meeting the requirements of IRC Section 501(c)(18); 

8. a qualified plan for self-employed individuals (H.R. 10 or Keogh 

Plan); and 

9. a SIMPLE IRA plan or a SIMPLE 401(k) plan. 


Page 5 of 16 


If you do not know whether your employer maintains one of these 

plans or whether you are an active participant in it, check with your 

employer and your tax advisor. Also, the Form W-2 (Wage and 

Tax Statement) that you receive at the end of the year from your 

employer will indicate whether you are an active participant. If you 

are an active participant and are single, the deductible amount of 

your contribution is determined as follows: (1) take the Phase-out 

Maximum for the applicable year (specified below) 

2004-2007 IRA Deductibility Threshold Levels for Active 

Participants 

Tax Year: Married Filing a Joint Single Filer 

Return 

2004 $65,000-$75,000 $45,000-$55,000 

2005 $70,000-$80,000 $50,000-$60,000 

2006 $75,000-$85,000 $50,000-$60,000 

2007 $83,000-$103,000 $52,000-$62,000 

and subtract your MAGI, (2) divide this total by the difference 

between the Phase-out Maximum and Phase-out Minimum (the 

maximum and minimum phase-out limits, as specified below), (3) 

multiply this number by the maximum allowable contribution for 

the applicable year, including catch-up contributions if you are 50 or 

older. 

The resulting figure will be the maximum IRA deduction you may 

take. You must round the resulting number to the next highest 

$10 if the number is not a multiple of 10. For example, if you are 

age 30 with MAGI of $54,000 in 2007, your maximum deductible 

contribution is $3,200 (the 2007 Phase-out Maximum of $62,000 

minus your MAGI of $54,000, divided by the difference between 

the maximum and minimum phase-out limits of $10,000 and 

multiplied by the contribution limit of $4,000.) 

If you are an active participant, are married and you file a joint tax 

return, the deductible amount of your contributions is determined 

as follows: (1) take the Phase-out Maximum for the applicable year 

(specified below) and subtract your MAGI, (2) divide this total by 

the difference between the phase-out maximum and minimum, (3) 

multiply this number by the maximum allowable contribution for 

the applicable year, including catch-up contributions if you are 50 or 

older. The resulting figure will be the maximum IRA deduction you 

may take. For example, if you are age 30 with MAGI of $97,000 in 

2007, your maximum deductible contribution is $1,200 (the 2007 

Phase-out Maximum of $103,000 minus your MAGI of $97,000, 

divided by the difference between the maximum and minimum 

phase-out limits of $20,000 and multiplied by the contribution 

limit of $4,000.) You must round the resulting number to the next 

highest $10 if the number is not a multiple of 10. In the following 

table, for each filing type (Married Filing Joint Return or Single Filer) 

the left entry in the column is the Phase- Out Minimum and the 

right entry is the Phase-Out Maximum. 

If you are married filing jointly and are not an active participant in an 

employer-maintained retirement plan, but are married to someone 

who is an active participant, your maximum deductible contribution 

for 2007 is phased out if your MAGI is more than $156,000 but 

less than $166,000. The amount of your deduction is determined 

by taking (1) $166,000 minus your MAGI, (2) divide this total by 

$10,000, (3) multiply this number by the maximum allowable 

contribution for the applicable year, including catch-up contributions 

if you are 50 or older. The resulting figure will be the maximum IRA 

deduction you may take. If your MAGI exceeds $166,000 or more, 

you cannot take a deduction. 

If you are an active participant, are married and you file a separate 

income tax return, your MAGI phase-out range is generally $0 - 

$10,000. However, if you lived apart for the entire tax year, you are 

treated as a single filer. 

Note that the Pension Protection Act of 2006 provides for the 

Phase-out Maximums and Phase-out Minimums stated above to be 

increased by a possible cost-of living adjustment for each year after 

2007. 




B. Tax-deferred earnings: The investment earnings of your IRA are 

not subject to federal income tax until distributions are made (or, 

in certain circumstances, when distributions are deemed to be 

made). 

C. Tax credit for contributions - You may be eligible to receive a 

tax credit on your traditional or Roth IRA contributions equaling a 

percentage of your qualified retirement savings contributions not 

exceeding $2,000. This credit will be allowed in addition to any tax 

deduction that may apply, and may not exceed $1,000 in a given 

year. You may be eligible for this tax credit if you are 

• age 18 or older as of the close of the taxable year, 

• not a dependent of another taxpayer, and 

• not a full-time student 

The credit is based upon your income (see chart below) and will range 

from 0 to 50 percent of eligible contributions. In order to determine 

the amount of your qualified retirement savings contributions, you 

add all of the contributions made to your traditional or Roth IRA and 

reduce these contributions by any distributions that you may have 

taken during the testing period. 

Adjusted Gross Income 

Joint Return Head of Household All Other Cases Applicable 

Percentage 

Over Not Over Over Not Over Over Not Over 

30,000 22,500 15,000 50 

30,000 32,500 22,500 24,375 15,000 16,250 20 

32,500 50,000 24,375 37,500 16,250 25,000 10 

50,000 37,500 25,000 0 

* Adjusted gross income excludes foreign earned income and income for Guam, 

America Samoa, North Mariana Islands and Puerto Rico 

The testing period begins two years prior to the year for which the 

credit is sought. In order to determine your tax credit, multiply the 

applicable percentage from the following chart by the amount of 

your retirement savings contributions that do not exceed $2,000. 

The adjusted gross income limits in the above table may be 

increased by a cost-of-living adjustment for each year after 2007. 

For 2007, you may be able to claim the contribution tax credit if your 

MAGI is not more than $52,000 if your filing status is married filing 

jointly, $39,000 if your filing status is head of household or $26,000 

in all other cases. 

D. Nondeductible contributions - You may make nondeductible 

contributions to your IRA to the extent that deductible contributions 

are not allowed. The sum of your deductible and nondeductible 

IRA contributions cannot exceed your contribution limit (the lesser 

of the contribution limits previously described or 100 percent of 

compensation). You may elect to treat deductible IRA contributions 

as nondeductible contributions. 

If you make nondeductible contributions for a particular tax year, 

you must report the amount of the nondeductible contribution on 

your federal income tax return (using IRS Form 8606). 

If you overstate the amount of designated nondeductible 

contributions for any taxable year, you are subject to a $100 penalty 

unless reasonable cause for the overstatement can be shown. 

Failure to file any form required by the IRS to report nondeductible 

contributions (e.g., IRS Form 8606) will result in a $50 per failure 

penalty. 

E. Taxation of distributions - The taxation of IRA distributions 

depends on whether or not you have ever made nondeductible IRA 

contributions. If you have only made deductible contributions, any 

IRA distribution will be fully included in income. 

If you have ever made nondeductible contributions to any IRA, the 

following formula must be used to determine the amount of any 

IRA distribution excluded from income: (Aggregate Nondeductible 

Contributions) x (Amount Withdrawn) /Aggregate IRA Balance) = 

Amount Excluded From Income 

Page 6 of 16 


NOTE: Aggregate nondeductible contributions include all 

nondeductible contributions made by you through the end of the 

year of the distribution (which have not previously been withdrawn 

and excluded from income). Also note that aggregate IRA balance 

includes the total balance of all of your IRAs as of the end of the 

year of distribution and any distributions occurring during the year. 

Recognizing losses on investments - If you have a loss on your 

traditional IRA investment, you can recognize (include) the loss on 

your income tax return, but only when all the amounts in all your 

traditional IRA accounts have been distributed to you and the total 

distributions are less than your unrecovered basis, if any. 

Your basis is the total amount of the nondeductible contributions 

in your traditional IRAs. You claim the loss as a miscellaneous 

itemized deduction, subject to the 2%-of-adjusted-gross-income 

limit that applies to certain miscellaneous itemized deductions on 

Schedule A, Form 1040. 

F. Qualified Charitable Distributions - If you are at least age 70½, 

you may direct GFTC to distribute up to $100,000 from your IRA to 

qualifying organizations. The payment(s) will be treated as though 

distributed to you for purposes of minimum required distributions. 

You will not receive charitable deduction(s) from income for having 

made the payment(s). The payment(s) will be considered to have 

been distributed from your IRA first from untaxed income. You 

must receive nothing for value in connection with the payment(s) 

and the organization(s) must substantiate the payment(s). 

G. Portability of IRA assets - Your IRA may be directly transferred 

to another IRA of yours. A transfer of a traditional IRA to a Roth 

IRA is considered a conversion discussed in item 5 below. Your 

IRA may be rolled over to an IRA of yours, may receive rollover 

contributions, and may be converted to a Roth IRA, provided that 

all of the applicable rollover and conversion rules are followed. 

Rollover is a term used to describe a tax-free movement of cash 

or other property to your IRA from another IRA, or from your 

employer's Qualified Retirement Plan, Tax Sheltered Annuity, or 

457(b) deferred compensation plan. SIMPLE IRA funds may not 

be rolled to your IRA during the first two years you participate in 

your employer's SIMPLE IRA plan. The rollover rules are generally 

summarized below. These transactions are often complex. If you 

have any questions regarding a rollover, please see a competent tax 

advisor. 

1. Traditional IRA to traditional IRA rollovers – Funds 

distributed from your IRA may be rolled over to any IRA of 

yours if the requirements of IRC section 408(d)(3) are met. 

A proper IRA to IRA rollover is completed if all or part of 

the distribution is rolled over not later than 60 days after the 

distribution is received. You may not have completed another 

IRA to IRA rollover from the distributing IRA during the 12 

months preceding the date you receive the distribution. 

Further you may roll the same dollars or assets only once 

every 12 months. 

2. SIMPLE IRA to traditional IRA rollovers - Funds may be 

distributed from your SIMPLE IRA and rolled over to your IRA 

without IRS penalty, provided two years have passed since 

you first participated in a SIMPLE IRA plan sponsored by your 

employer. As with traditional IRA to traditional IRA rollovers, 

the requirements of Code section 408(d)(3) must be met. A 

proper SIMPLE IRA to IRA rollover is completed if all or part 

of the distribution is rolled over not later than 60 days after the 


SIMPLE IRA to IRA or SIMPLE IRA to SIMPLE IRA rollover 

from the distributing SIMPLE IRA during the 12 months 

preceding the date you receive the distribution. Further, you 

may roll over the same dollars or assets only once every 12 

months. 

3. Employer-sponsored retirement plans to IRA rollovers 

- You may roll over directly or indirectly, any eligible rollover 

distribution. An eligible rollover distribution is defined generally 

as any distribution from a qualified plan, tax-sheltered annuity, 

or 457(b) deferred compensation plan (other than distributions 



to non-spouse beneficiaries) unless it is part of certain series 

of substantially equal periodic payments, a required minimum 

distribution, or a hardship distribution. After 2006, The Pension 

Protection Act of 2006 permits direct rollovers to be made 

to IRAs of non-spouse beneficiaries. Amounts contributed 

in this manner will be treated as held in an inherited IRA and 

subject to the minimum distribution rules applicable to nonspouse 

IRA beneficiaries. As under prior law, non-spouse 

beneficiaries may not make indirect rollovers to IRAs. 

If you elect to receive your rollover distribution prior to placing 

it in an IRA, thereby conducting an indirect rollover, your 

plan administrator will generally be required to withhold 20 

percent of your distribution as a prepayment of income taxes. 

When completing the rollover, you may make up the amount 

withheld, out of pocket, and rollover the full amount distributed 

from your qualified plan balance, if you so choose. To qualify 

as a rollover, your eligible rollover distribution must be rolled 

over to your IRA not later than 60 days after you receive it. 

Alternatively, you may claim the withheld amount as income 

and pay the applicable income tax and, if you are under age 

59½, the 10 percent early distribution penalty (unless an 

exception to the penalty applies). 

As an alternative to the indirect rollover, your employer 

generally must give you the option of directly rolling your 

qualified plan balance over to an IRA. If you elect the direct 

rollover option, your eligible rollover distribution will be paid 

directly to the IRA (or other qualified plan) that you designate. 

The 20 percent withholding requirements do not apply to 

direct rollovers. 

4. Traditional IRA to employer-sponsored retirement plans 

- You may roll over, directly or indirectly, any eligible rollover 

distribution from an IRA to an employer's qualified retirement 

plan, tax-sheltered annuity, or 457(b) deferred compensation 

plan. An eligible rollover distribution is defined as any taxable 

distribution from an IRA that is not a part of a required 

minimum distribution. The IRA does not have to be maintained 

as a conduit IRA in order to be eligible to roll over to an 

employer-sponsored retirement plan. 

5. Traditional IRA to Roth IRA rollovers - If your adjusted 

gross income is not more than $100,000 you are eligible to roll 

over (or convert) all or any portion of your existing traditional 

IRA(s) into your Roth IRA(s). The amount of the rollover from 

your traditional IRA to your Roth IRA shall be treated as a 

distribution for income tax purposes and is includible in your 

gross income (except for any nondeductible contributions). 

Although the rollover amount is generally included in income, 

the 10 percent early distribution penalty shall not apply to 

rollovers or conversions from a traditional IRA to a Roth IRA 

regardless of whether you qualify for any exceptions to the 10 

percent penalty. 

Recharacterizations - You may be able to treat a contribution 

made to one type of IRA as having been made to a different 

type of IRA. This is called recharacterizing the contribution. 

To recharacterized a contribution, you generally must have the 

contribution transferred from the first IRA (the one to which it 

was made) to the second IRA in a trustee-to-trustee transfer. If 

the transfer is made by the due date (including extensions) for 

your tax return for the year during which the contribution was 

made, you can elect to treat the contribution as having been 

originally made to the second IRA instead of to the First IRA. 

If you recharacterized your contribution, you must do all three 

of the following: 

• Include in the transfer any net income allocable to the 

contribution. If there was a loss, the net income you transfer 

must be a negative amount. 

• Report the recharacterization on your tax return for the year 

during which the contribution was made. 

• Treat the contribution as having been made to the second IRA 


Page 7 of 16 


on the date that it was actually made to the first IRA. 

No deduction allowed. You cannot deduct the contribution 

to the First IRA. Any net income you transfer with the 

recharacterized contribution is treated as earned in the second 

IRA. 

6. Written election - At the time you make a proper rollover 

to an IRA, you must designate to the Trustee/Custodian, in 

writing, your election to classify that contribution as a rollover. 

Once made, the rollover election is irrevocable. 

7. Carryback contributions - A contribution is deemed to have 

been made on the last day of the preceding taxable year if 

you make a contribution by the deadline for filing your income 

tax return (not including extensions), and you designate that 

contribution as a contribution for the preceding taxable year. 

For example, if you are a calendar year taxpayer and you make 

your IRA contribution on or before April 15, your contribution is 

considered to have been made for the previous tax year if you 

designated it as such. 

Limitations and restrictions 

A. SEP plans - Under a Simplified Employee Pension (SEP) Plan that 

meets the requirements of IRC Section 408(k), your employer 

may make contributions to your IRA. Your employer is required to 

provide you with information which describes the terms of your 

employer's SEP Plan. 

B. Spousal IRA contributions - If you are married, you may make 

payments to an IRA established for the benefit of your spouse. Your 

spouse must not have attained the age of 70½ in that year, or any 

prior year even if you are age 70½ or older. You must file a joint tax 

return for the year for which the contribution is made. 

The amount you may contribute to your IRA and your spouse's 

IRA is the lesser of 100 percent of your combined compensation 

or $6,000 for 2002-2004, $8,000 for 2005-2007, and $10,000 for 

2008. This amount may be increased with possible cost-of-living 

adjustments in 2009 and beyond. However, you may not contribute 

more than the applicable limit as mentioned previously, to any one 

IRA. 

C. Deduction of rollovers and transfers - A deduction is not allowed 

for rollover or transfer contributions. 

D. Gift tax - Transfers of your IRA assets to a named beneficiary 

made during your life and at your request or because of your failure 

to instruct otherwise, may be subject to federal gift tax under IRC 

Section 2501. 

E. No special tax treatment - Capital gains treatment and the 

favorable five or ten year forward averaging tax authorized by IRC 

Section 402 do not apply to IRA distributions. 

F. Income tax withholding - Any withdrawal from your IRA, except 

a direct transfer, is subject to federal income tax withholding. You 

may, however, elect not to have withholding apply to your IRA 

withdrawal. If withholding is applied to your withdrawal, not less 

than 10 percent of the amount withdrawn must be withheld. 

G. Prohibited transactions - If you or your beneficiary engage in a 

prohibited transaction with your IRA, as described in IRC Section 

4975, your IRA will lose its tax-exempt status and you must include 

the value of your account in your gross income for that taxable 

year. The following transactions are a nonexclusive list of examples 

of transactions that can be prohibited transactions with your IRA: 

(1) taking a loan from your IRA; (2) buying property for personal 

reasons; or (3) receiving certain bonuses or premiums because of 

your IRA. 

H. Pledging - If you pledge any portion of your IRA as collateral for a 

loan, the amount so pledged will be treated as a distribution and 

will be included in your gross income for that year. The pledge is 

a prohibited transaction that will cause your IRA to lose its taxexempt 

status. 



Federal tax penalties 

A. Excess contribution penalty - An excise tax of six percent is 

imposed upon any excess contribution you make to your IRA. This 

tax will apply each year in which an excess remains in your IRA. An 

excess contribution is any contribution amount that exceeds your 

contribution limit, excluding rollover and direct transfer amounts. 

Your contribution limit is the lesser of the contribution limits 

previously discussed or 100 percent of your compensation for the 

taxable year. 

Rules for withdrawing excess contributions are discussed under 

Early Distribution Penalty Exceptions below. 

B. Excess accumulation penalty - A penalty of 50% is imposed 

with respect to any minimum required distribution not taken when 

required. The IRS may abate the penalty if you establish that you had 

reasonable cause for this failure. 

C. Early distribution penalty - If you are under age 59½ and receive 

an IRA distribution, an additional tax of 10 percent will apply unless 

you qualify for any exception listed below. This additional tax will 

apply only to the portion of a distribution that is includible in your 

income. 

D. Early distribution penalty exceptions 

Death - Payments are made to your beneficiary after your death 

Disability - You are disabled (unable to do any substantial gainful 

activity due to a physical or mental condition expected to result in 

your death or be of long, continued, and indefinite duration.) 

Substantially equal payments - The distributions are part of a 

series of substantially equal payments over your life (or your life 

expectancy) or over the lives (or the joint life expectancies) of you and 

your beneficiary. You must use an IRS-approved distribution method 

and you must take at least one distribution annually for this exception 

to apply. The “required minimum distribution” method is described 

in Publication 590. Note that this method calculates the exact 

amount required to be distributed, not the minimum amount. Other 

IRS-approved methods are described in Revenue Ruling 2002-62 in 

Internal Revenue Bulletin 2002-42. These methods are complex and 

generally require professional assistance to implement. 

Substantially equal payments must generally continue until at least 5 

years after the date of the first payment or until you reach age 59½, 

whichever is later. If a change from an approved distribution method 

is made before the end of the appropriate period, any payments 

you receive before you reach age 59 ½ will be subject to the 10% 

additional tax. This is true even if the change is made after you reach 

age 59½. The payments will not be subject to the 10% additional tax 

if another exception applies or if the change is made because of your 

death or disability. 

If you are receiving a series of substantially equal periodic payments, 

you can make a one-time switch to the required minimum distribution 

method at any time without incurring the additional tax. Once a 

change is made, you must follow the required minimum distribution 

method in all subsequent years. 

Levy - The distribution is due to the IRS levy of the Roth IRA 

assets. 

Health insurance - Distribution taken by an IRA holder who received 

federal or state unemployment compensation for 12 consecutive 

weeks and who is using the distribution(s) to pay for health insurance 

is not subject to the 10% early distribution penalty. The distribution 

must be taken in the year that the unemployment was received or in 

the year following. In addition, the distribution cannot be taken more 

than 60 days after the IRA holder is reemployed. 

Medical expenses - Distributions used for unreimbursed medical 

expenses that exceed 7.5 percent of the IRA holder's adjusted gross 

income are not subject to the 10% early distribution penalty. 

Higher education expenses - Under this exception to the 10 percent 

early distribution penalty, an IRA holder may take distributions from 

his or her IRA to the extent that such distributions do not exceed 

the qualified higher education expenses of the taxpayer or his or her 


Page 8 of 16 


dependents for the taxable year. (IRC Sec. 72(t)(2)(E)). Generally, 

penalty-free distributions may be taken to pay for the qualified higher 

education expenses of the IRA holder, the IRA holder's spouse, and 

any child or grandchild of the taxpayer or the taxpayer's spouse at an 

eligible education institution. 

Higher education expenses are defined as tuition, books, fees, 

supplies and equipment applied to education at an eligible educational 

institution. 

First-time home purchase expenses - Distributions from IRAs 

to pay for qualified first-time home purchase expenses may be 

taken penalty free (IRC Sec. 72(t)(2)(F)). A qualified first-time 

home purchase expense distribution is defined as any distribution 

received by an individual to the extent that the distribution is used 

by the IRA holder before the close of the 120th day after the day 

on which the distribution is received. The distribution may be taken 

to pay the qualified acquisition costs with respect to a principal 

residence of a first-time homebuyer who is the IRA holder, the IRA 

holder's spouse, or the IRA holder's child, grandchild or ancestor of 

the IRA holder or his or her spouse. The aggregate amount of IRA 

distributions taken by an IRA holder that may be treated as qualified 

first-time home purchase expenses can not exceed a lifetime limit 

of $10,000. Under IRC Sec. 72(t)(8)(D)(i), a first-time homebuyer is 

defined as an individual (and, if married, the individual’s spouse) that 

had no present ownership interest in a principal residence during the 

two-year period ending on the date of acquisition of the principal 

residence. 

Qualified reservist distribution - Under the Pension Protection 

Act of 2006, effective for distributions effective for distributions to 

reservists called to active duty after September 11, 2001 and before 

December 31, 2007, a member of a reserve component of the United 

States armed forces who is ordered or called to active duty for a 

period in excess of 179 days or indefinitely, may take a penalty-free 

distribution at any time before the end of the active duty period. 

Reservists who paid the penalty tax under prior law on a qualified 

reservist distribution may claim a refund or credit. Until August 18, 

2007, the claim may be made without regard to usual time limitations 

on tax credits or refunds. 

Federally-recognized disasters - Under the Katrina Emergency 

Tax Relief Act and conforming relief granted by the Internal Revenue 

Service, victims of recent Gulf-Coast hurricanes may receive up to 

$100,000 in penalty-free IRA distributions. These provisions are 

explained in IRS Publication 4492, Information for Taxpayers Affected 

by Hurricanes Katrina, Rita, and Wilma. The federal government may 

provide similar relief to the victims of future disasters. 

Return of excess contributions - Return of excess contributions 

distributions from IRAs that timely return to you excess contributions, 

as defined above, are not subject to the early distribution penalty. 

Note that the earnings on the returned excess contributions will be 

subject to the 10% penalty unless another exception applies. The 

return of excess contributions and related earnings for a tax year is 

timely if made before the due date of your federal income tax return 

(plus filing extensions) for that year. If you have filed your tax return 

on time, a special rule allows you up to 6 months from the original 

due date (usually April 15) to withdraw the excess contributions, 

without penalty. 

E. Penalty reporting - You must file Form 5329 with the Internal 

Revenue Service to report and remit any penalties or excise taxes. 

Other 

A. IRS plan approval - The form of agreement used to establish this 

IRA has been approved by the Internal Revenue Service. The Internal 

Revenue Service approval is a determination only as to form. It is 

not an endorsement of the plan in operation or of the investments 

offered. 

B. Additional information - You may obtain further information on 

IRAs from the Internal Revenue Service. In particular, you may wish 

to obtain IRS Publication 590, Individual Retirement Arrangements. 


GFTC Roth IRA Custodial Agreement 

Page 9 of 16 



Form 5305-RA under Section 408(A) of the Internal Revenue Code 

• The Depositor, whose name appears on the attached Application, 

is establishing a Roth Individual Retirement Account under Section 

408(A) to provide for his or her retirement and for the support of his 

or her beneficiaries after death. 

• The Custodian, Genworth Financial Trust Company, named on 

the attached Application has given the Depositor the disclosure 

statement required under Regulations Section 1.4086. 

• The Depositor has assigned to the Custodial Account the sum 

indicated on the Application. 

• The Depositor and the Custodian make the following agreement. 

Article I 

Except in the case of a rollover contribution described in Section 

408A(e), a recharacterized contribution described in Section 408A(d) 

(6), or an IRA Conversion Contribution, the Custodian will accept 

only cash contributions up to $3,000 per year for tax years 2002 

through 2004. That contribution limit is increased to $4,000 for tax 

years 2005 through 2007 and $5,000 for 2008 and thereafter. For 

individuals who have reached the age of 50 before the close of the 

tax year, the contribution limit is increased to $3,500 per year for 

tax years 2002 through 2004, $4,500 for 2005, $5,000 for 2006 

and 2007, and $6,000 for 2008 and thereafter. For tax years after 

2008, the above limits will be increased to reflect a cost-of-living 

adjustment, if any. 

Article II 

1. The annual contribution limit described in Article I is gradually 

reduced to $0 for higher income levels. For a single depositor, the 

annual contribution is phased out between adjusted gross income 

(AGI) of $95,000 and $110,000; for a married Depositor filing 

jointly, between AGI of $150,000 and $160,000; and for a married 

depositor filing separately, between AGI of $0 and $10,000. In the 

case of a conversion, the Custodian will not accept IRA Conversion 

Contributions in a tax year if the Depositor’s AGI for the tax year the 

funds were distributed from the other IRA exceeds $100,000 or if 

the Depositor is married and files a separate return. Adjusted gross 

income is defined in section 408A(c)(3) and does not include IRA 

Conversion Contributions. 

2. In the case of a joint return, the AGI limits in the preceding 

paragraph apply to the combined AGI of the depositor and his or her 

spouse. 

Article III 

The Depositor’s interest in the balance in the Custodial Account is 

non forfeitable. 

Article IV 

1. No part of the Custodial Account funds may be invested in life 

insurance contracts, nor may the assets of the Custodial Account 

be commingled with other property except in a common trust fund 

or common investment fund (within the meaning of section 408(a) 

(5)). 

2. No part of the Custodial Account funds may be invested in 

collectibles (within the meaning of section 408(m)) except as 

otherwise permitted by section 408(m)(3), which provides an 

exception for certain gold, silver, and platinum coins, coins issued 

under the laws of any state, and certain bullion. 

Article V 

1. If the Depositor dies before his or her entire interest is distributed 

to him or her and the Depositor’s surviving spouse is not the 

designated beneficiary, the remaining interest will be distributed in 

accordance with (a) below or, if elected or there is no designated 

beneficiary, in accordance with (b) below: 

(a) 

The remaining interest will be distributed, starting by the end of 

the calendar year following the year of the Depositor’s death, 

over the designated beneficiary’s remaining life expectancy as 


(b) 

determined in the year following the death of the Depositor. 

The remaining interest will be distributed by the end of 

the calendar year containing the fifth anniversary of the 

Depositor’s death. 

2. The minimum amount that must be distributed each year under 

paragraph 1(a) above is the account value at the close of business on 

December 31 of the preceding year divided by the life expectancy 

(in the single life table in Regulations section 1.401(a)(9)-9) of the 

designated beneficiary using the attained age of the beneficiary in 

the year following the year of the Depositor’s death and subtracting 

1 from the divisor for each subsequent year. 

3. If the Depositor’s surviving spouse is the designated beneficiary, 

such spouse will then be treated as the Depositor. 

Article VI 

1. The depositor agrees to provide the Custodian with all information 

necessary to prepare any reports required by Sections 408(i) and 

408A(d)(3)(E), Regulations Sections 1.408-5 and 1.408-6, or other 

guidance published by the Internal Revenue Service (IRS). 

2. The Custodian agrees to submit to the IRS and Depositor the 

reports prescribed by the IRS. 

Article VII 

Notwithstanding any other articles that may be added or 

incorporated, the provisions of Articles I through IV and this 

sentence will be controlling. Any additional articles inconsistent 

with section 408A, the related regulations, and other published 

guidance will be invalid. 

Article VIII 

This Agreement will be amended as necessary to comply with the 

provisions of the Code, the related regulations, and other published 

guidance. Other amendments may be made with the consent of the 

persons whose signatures appear below. 

Article IX 

1. Roth IRA Custodial Agreement supplements GFTC Custodial 

Account Agreement: This Roth IRA Custodial Agreement 

supplements and is supplemented by the GFTC Custodial Account 

Agreement, and the terms of the GFTC Custodial Account 

Agreement shall also apply to the Custodial Account, to the extent 

they do not conflict with the terms of this Roth IRA Custodial 

Agreement. 

2. Definitions and section references: The words "you" and "your" 

mean the “Depositor.” The “Depositor” is referred to as the 

“Account Owner” in the GFTC Custodial Account Agreement. 

The words "we", "us", and "our" mean the Custodian, Genworth 

Financial Trust Company, which is referred to as “GFTC” in the 

Custodial Account Agreement. “Custodial Account” is the Roth 

Individual Retirement Account, or Roth IRA, established by this 

agreement. IRA Conversion Contributions are amounts rolled over, 

transferred, or considered transferred from a non-Roth IRA to a 

Roth IRA. A non-Roth IRA is an individual retirement account or 

annuity described in section 408(a) or 408(b), other than a Roth 

IRA. Section references are to the Code unless otherwise noted. 

“Code” means the Internal Revenue Code. Section references are 

to the Code unless otherwise noted. 

3. Contributions made by deposit of tax refunds: In addition to 

the contribution types referenced in Article 1, we will accept the 

deposit of federal income tax refunds, as provided in Section 830 

of the Pension Protection Act of 2006, as the equivalent of cash 

contributions to your Roth IRA. 

4. Additional contributions in special cases: For an applicable 

individual, in lieu of the catch-up contributions referenced in Article 

1, we will accept contributions described in Code Sections 219(b) 

(5)(C), as amended by Section 831 of the Pension Protection Act of 

2006.

GFTC Roth IRA Custodial Agreement—continued from page 9 


Page 10 of 16 


5. Tax on Excess Contributions: You may be subject to a 6% tax on 

excess contributions if: 

(a) 

(b) 

(c) 

contributions to other individual retirement arrangements you have 

been made for the same tax year; 

your adjusted gross income exceeds the applicable limits in Article 

II for the tax year; or 

or you and your spouse’s compensation is less than the amount 

contributed on your behalf for the tax year. 

6. Investment of amounts in your Roth IRA: 

(a) 

(b) 

(c) 

You shall have exclusive responsibility for the investment of 

your Roth IRA. 

Custodian GFTC shall have no responsibility for the investment 

of your Roth IRA. Custodian GFTC shall have no discretion to 

direct any investment in your Roth IRA. GFTC assumes no 

responsibility for rendering investment advice with respect to 

your Roth IRA, nor will GFTC offer any opinion or judgment to 

you on matters concerning the advisability or suitability of any 

investment or proposed investment for your Roth IRA. 

You may delegate your investment responsibility for your 

Roth IRA to another party acceptable to us, such as an 

Advisor providing investmetn advice through the AssetMark 

Investment Services Program. To the extent that the assets 

of your Roth IRA are subject to an investment advisory 

arrangement, such as a Client Services Agreement (CSA”), 

the terms of that arrangement or CSA shall apply to the 

investment of those assets (the "advised assets"). Custodian 

GFTC has no responsibility to review or question, nor shall 

GFTC be responsible for, the directions of an investment 

adviser to your Roth IRA. To the extent that there exist assets 

in your Roth IRA that are not subject to an investment advisory 

arrangement, you shall remain exclusively responsible for the 

investment of those assets (the "non-advised assets") and 

the terms of your custodial agreement with Custodian GFTC 

applicable to non-adviser assets shall apply. 

7. Beneficiaries: If you die before you receive all of the amounts in 

your Roth IRA, payments from your Roth IRA will be made to your 

beneficiaries. You may designate one or more person(s) or entity 

as beneficiary of your Roth IRA. This designation can only be made 

on a form acceptable to us and it will only be effective when it is 

filed with and accepted by us during your lifetime. Each beneficiary 

designation accepted by us will cancel any previous designation. 

The consent of a beneficiary shall not be required for you to revoke 

a beneficiary designation. If you do not designate a beneficiary, your 

estate will be the beneficiary. 

Upon your death, your designated beneficiary may elect to receive 

distributions over his or her life expectancy and may elect to 

designate his or her own beneficiary to receive any remaining Roth 

IRA amounts upon the designated beneficiary’s death. 

If the beneficiary payment election described in Article V, Section 

1 of this Agreement is not made by December 31 of the year 

following the year of your death, however, then the payment 

described in Section 1(a) will be deemed elected (that is payments 

in equal or substantially equal payments over the life expectancy 

of your designated beneficiary, commencing by December 31 of 

the year following your death). If your designated beneficiary is 

your spouse, however, then distributions over your spouse’s life 

expectancy need not commence until December 31 of the year you 

would have attained age 70½, if later. Not withstanding Article V, 

Section 1(b), instead of assuming the IRA, a surviving spouse may 

elect to take the distributions as a non-spouse beneficiary. 

8. Termination: Either party may terminate this Agreement at 

any time by giving written notice to the other. We can resign as 

Custodian at any time effective 30 days after we mail written notice 

of our resignation to you. Upon receipt of that notice, you shall 

make arrangements to transfer your Roth IRA to another financial 

organization or accept payment of your Roth IRA. If you do not 

complete a transfer of your Roth IRA within 30 days from the date 

we mail the notice to you, we have the right to transfer your Roth 

IRA assets to a successor Roth IRA custodian or trustee that we 

choose in our sole discretion or we may pay your Roth IRA to you 

in a single sum. We shall not be liable for any actions or failure to 

act on your part or on the part of any successor custodian or trustee 

nor for any tax consequences you may incur that result from the 

transfer or distribution of your assets pursuant to this Section. 

If this agreement is terminated, we may hold back from your Roth 

IRA a reasonable amount of money that we believe is necessary to 

cover any one or more of the following: 

• any fees, expenses or taxes chargeable against your Roth 

IRA; 

• any penalties associated with the early withdrawal of any 

savings instrument or other investment in your IRA. 

If our organization is merged with another organization (or comes 

under the control of any Federal or State agency), or if our entire 

organization (or any portion which includes your Roth IRA) is 

bought by another organization, that organization (or agency) shall 

automatically become the Trustee or Custodian of your Roth IRA, 

but only if it is the type of organization authorized to serve as an 

Roth IRA trustee or custodian. 

9. Amendments and effectiveness: Your Roth IRA is established 

after you have executed the application and GFTC has accepted 

the account. This account must be created in the United States for 

the exclusive benefit of you and your beneficiaries. We have the 

right to amend this agreement at any time. Any amendment we 

make to comply with the Code and related regulations does not 

require your consent. You will be deemed to have consented to any 

other amendment unless, within 30 days from the date we mail the 

amendment, you notify us in writing that you do not consent. 

10. Withdrawals: All requests for withdrawals shall be in writing on a 

form provided by or acceptable to us. The method of distribution 

must be specified in writing. The tax identification number of the 

recipient must be provided to us before we are obligated to make a 

distribution. 

Any withdrawals shall be subject to all applicable tax and other laws 

and regulations including possible early withdrawal penalties and 

withholding requirements. 

11. Transfers from other plans: We can receive amounts transferred 

to this Roth IRA from the custodian or trustee of another Roth IRA. 

We reserve the right not to accept any transfer. 

12. Liquidation of assets: We have the right to liquidate assets in 

your Roth IRA if necessary to make distributions or to pay fees, 

expenses or taxes properly chargeable against your Roth IRA. If 

you fail to tell us which assets to liquidate, we will decide at our 

complete and sole discretion and you agree not to hold us liable for 

any adverse consequences that result from our decision. 

13. Restrictions on the Roth IRA: Neither you nor any beneficiary 

may sell, transfer or pledge any interest in your Roth IRA in any 

manner whatsoever, except as provided by law or this agreement. 

The assets in your Roth IRA shall not be responsible for debts, 

contracts or torts of any person entitled to distributions by law or 

this agreement. 

14. Governing law; severability: This agreement is subject to all 

applicable federal and state laws and regulations. If it is necessary 

to apply any state law to interpret and administer this agreement, 

the law of our domicile, Arizona, shall govern. 

If any part of this agreement is held to be illegal or invalid, the 

remaining parts shall not be affected. Neither your or our failure to 

enforce at any time or for any period of time any of the provisions 

of this agreement shall be construed as a waiver of such provisions, 

or your right or our right thereafter to enforce each and every such 

provision. 


GFTC Roth IRA Disclosure Statement 

Page 11 of 16 



Right to revoke your Roth IRA 

If you receive this Disclosure Statement at the time you establish your 

Roth IRA, you have the right to revoke your Roth IRA within seven (7) 

days of its establishment. If revoked, you are entitled to a full return of 

the contribution you made to your Roth IRA. The amount returned to you 

would not include an adjustment for such items as sales commissions, 

administrative expenses, or fluctuation in market value. You may make 

this revocation only by mailing or delivering a written notice to GFTC at 

the address listed on the attached Application. 

If you send your notice by first class mail, your revocation will be deemed 

mailed as of the date of the postmark. 

If you have any questions about the procedure for revoking your Roth 

IRA, please call GFTC at the telephone number listed on the attached 

Application. 

How are a traditional IRA and a Roth IRA different? This table 

shows the differences between traditional and Roth IRAs. Answers in 

the middle column apply to traditional IRAs. Answers in the right column 

apply to Roth IRAs. 

Question 

Is there a limit on when I 

can set up and contribute 

to a… 

If I earned more than 

$5,000 in 2007 ($5,000 if I 

was 50 or older by the end 

of 2007), is there a limit on 

how much I can contribute 

to a… 

Can I deduct contributions 

to a… 

Do I have to file a form 

just because I contribute 

to a… 

Do I have to start taking 

contributions when I reach 

a certain age from a… 

How are distributions 

taxed from a… 

Do I have to file a form 

just because I receive 

distributions from a… 


Answer 

Traditional IRA 

Yes. You must not have reached 

age 70½ by the end of the year. 

Yes. For 2007, you can 

contribute to a traditional IRA 

up to: 

• $5,000, or 

• $5,000 if you were 50 or older 

by the end of 2007. 

There is no upper limit on how 

much you can earn and still 

contribute. 

Yes. You may be able to 

deduct your contributions to 

a traditional IRA depending 

on your income, filing status, 

whether you are covered by a 

retirement plan at work, and 

whether you receive social 

security benefits 

Not unless you make 

nondeductible contributions to 

your traditional IRA. In that case, 

you must file Form 8606. 

Yes. You must begin receiving 

minimum distributions by April 

1 of the year following the year 

you reach age 70½. 

Distributions from a traditional 

IRA are taxed as ordinary 

income, but if you made 

nondeductible contributions, not 

all of the distribution is taxable. 

Not unless you have a 

nondeductible contribution to a 

traditional IRA. If you have, file 

Form 8606. 

Roth IRA 

No. You can be any age. 

Yes. For 2007, you can 

contribute to a Roth IRA up to: 

• $5,000, or 

• $5,000 if you were 50 or older 

by the end of 2007, but the 

amount you can contribute 

may be less than that 

depending on your income, 

filing status, and if you 

contribute to another IRA. 

No. You can never deduct 

contributions to a Roth IRA. 

No. You do not have to file 

a form if you contribute to a 

Roth IRA. 

No. If you are the owner of a 

Roth IRA, you do not have to 

take distributions regardless of 

your age. 

Distributions from a Roth IRA 

are not taxed as long as you 

meet certain criteria. 

Yes. File Form 8606 if you 

received distributions from a 

Roth IRA (other than a rollover), 

recharacterization, certain 

qualified distributions, or a 

return of certain contributions). 

Requirements of a Roth IRA 

A. Cash contributions - Your contribution must be in cash, unless it 

is a rollover contribution, including a conversion. Beginning in 2007, 

the Pension Protection Act of 2006 authorizes you to direct the 

Internal Revenue Service to deposit all or a portion of any federal 

income tax refund you would otherwise receive in your Roth IRA. 

We will treat any such deposit as a cash contribution subject to the 

Roth IRA rules, including rules on timing of contributions, described 

below. 

Conversion methods - You can convert amounts from a traditional 

IRA (i.e., an IRA subject to Internal Revenue Code (IRC) Sections 

408(a) or 408(b) to a Roth IRA in any of the following three ways: 

• Rollover. You can receive a distribution from a traditional IRA 

and roll it over (contribute it) to a Roth IRA within 60 days after 

the distribution. 

• Trustee-to-trustee transfer. You can direct the trustee of the 

traditional IRA to transfer an amount from the traditional IRA 

to the trustee of the Roth IRA. 

• Same trustee transfer. If the trustee of the traditional IRA 

also maintains the Roth IRA, you can direct the trustee to 

transfer an amount from the traditional IRA to the Roth IRA. 

Conversions made with the same trustee can be made by 

redesignating the traditional IRA as a Roth IRA, rather than 

opening a new account. 

Failed Conversions - If, when you converted amounts from a 

traditional IRA or SIMPLE IRA into a Roth IRA, you expected 

to have modified AGI of less than $100,000 and a filing status 

other than married filing separately, but your expectations did not 

come true, you have made a failed conversion. If this happens to 

you, please refer to the discussion of Failed Conversions in IRS 

Publication 590. 

B. Maximum contributions - The total amount you may contribute 

to a Roth IRA for any taxable year cannot exceed the lesser of 

100 percent of your compensation or $3,000 for years 2002-2004, 

$4,000 for years 2005-2007, and $5000 for 2008 with possible 

cost-of-living adjustments in years 2009 and beyond. If you also 

maintain a traditional IRA the maximum contribution to your Roth 

IRAs is reduced by any contributions you make to your traditional 

IRA. Your total contribution to all traditional IRA's and Roth 

IRA's cannot exceed the lesser of the applicable limit mentioned 

previously or 100 percent of your compensation. 

However, if your modified AGI is above a certain amount, 

your contribution limit may be reduced. Generally, you can 

contribute to a Roth IRA if you have taxable compensation and 

your modified AGI is less than: 

• $166,000 for married filing jointly or qualifying widow(er) 

• $10,000 for married filing separately and you lived with your 

spouse at any time during the year, and 

• $114,000 for single, head of household, or married filing 

separately and you did not live with your spouse at any time 

during the year. 

• Under the Pension Protection Act of 2006, the above-stated 

modified AGI limits may be increased to reflect a cost-of-living 

adjustment for years after 2007. 

Modified AGI - Your Modified AGI for Roth IRA purposes is your 

adjusted gross income (AGI) as shown on your federal income tax 

return modified as follows: 

1. Subtract conversion income. This is any income resulting 

from the conversion of an IRA (other than a Roth IRA) to 

a Roth IRA. Conversions are discussed below. 

2. Add the following deductions and exclusions: 

a. Traditional IRA deduction 

b. Student loan interest deduction

GFTC Roth IRA Disclosure Statement—continued from page 11 


Page 12 of 16 


c. Tuition and fees deduction 

d. Foreign earned income exclusion 

e. Foreign housing exclusion or deduction 

f. Exclusion of qualified bond interest shown on IRS 

Form 8815, and 

g. Exclusion of employer-provided adoption benefits 

shown on IRS From 8839. 

You can use Worksheet 2-1 Modified Adjusted Gross Income for 

Roth IRA Purposes in IRS Publication 590 to figure your modified 

AGI. 

Compensation - Compensation includes wages, salaries, tips, 

professional fees, bonuses, and other amounts received for providing 

personal services. It also includes commissions, self-employment 

income, and taxable alimony and separate maintenance payments. 

Contribution eligibility - You are eligible to make regular 

contributions to a Roth IRA regardless of your age if you have 

compensation and your Modified AGI is below certain maximum 

thresholds. Your eligibility to contribute to a Roth IRA is not limited 

by your participation in a retirement plan other than a traditional 

IRA. 

Contribution limit reduced - If your modified AGI is above a 

certain amount, your contribution limit is gradually reduced. If the 

amount you can contribute must be reduced, figure your reduced 

contribution limit as follows: 

1. Start with your modified AGI. 

2. Subtract from the amount in (1): 

a. $156,000 if filing a joint return or qualifying widow(er), 

b. $-0- if married filing a separate return, and you lived with 

your spouse at any time during the year, or 

c. $99,000 for all other individuals. 

3. Divide the result in (2) by $15,000 ($10,000 if filing a joint 

return, qualifying widow(er), or married filing a separate return 

and you lived with your spouse at any time during the year), 

4. Multiply the maximum contribution limit (before reduction by 

this adjustment and before reduction for any contributions to 

traditional IRAs) by the result in (3). 

5. Subtract the result in (4) from the maximum contribution limit 

before this reduction. The result is your reduced contribution 

limit. 

You can use Worksheet 2-2 Determining Your Reduced Roth IRA 

Contribution Limit in Publication 590 to figure the reduction. 

Example. You are a 45-year old, single individual with taxable 

compensation of $126,000. You want to make the maximum 

allowable contribution to your Roth IRA for 2004. Your 

modified AGI for 2007 is $113,000. You have not contributed 

to any traditional IRA, so the maximum contribution limit 

before the modified AGI reduction is $4,000. Using the steps 

above you would figure your reduced Roth IRA contribution of 

$3,733. 

C. Catch up contribution - If you are age 50 or older by the close of 

the taxable year, you may make an additional contribution to your 

Roth IRA of $500 for years 2002-2005 and $1,000 for years 2006 

and beyond. 

For each year in 2007-2009 after the year in which the following 

conditions enacted by the Pension Protection Act of 2006 are 

satisfied, applicable individuals may make additional Roth IRA 

contributions of up to $3,000 per year. Applicable individuals must 

have participated in the section 401(k) plan of an employer that had 

matched at least 50% of employee contributions with employer 

stock and was (or its controlling corporation was) a debtor in a 

bankruptcy case. The employer or another person must have been 

subject to an indictment or conviction resulting from business 

transactions related to the bankruptcy. The employee must have 

been a plan participant on the date 6 months before the bankruptcy 

case was filed. Any such contributions would be in lieu of Catch-up 

contributions based on your age as described above. 

D. Non-Forfeitability: Your interest in your Roth IRA is 

nonforfeitable. 

E. Eligible custodians: The Custodian of your Roth IRA must be 

a bank, savings and loan association, credit union, or a person 

approved by the Secretary of the Treasury. To be a Roth IRA, the 

account must be designated as a Roth IRA when it is set up. 

F. Commingling assets: The assets of your Roth IRA cannot be 

commingled with other property except in a common trust fund or 

common investment fund. 

G. Life insurance: No portion of your Roth IRA may be invested in life 

insurance contracts. 

H. Collectibles: You may not invest the assets of your Roth IRA in 

collectibles (within the meaning of Internal Revenue Code (IRC) 

Section 408(m)). A collectible is defined as any work of art, rug or 

antique, metal or gem, stamp or coin, alcoholic beverage, or any 

other tangible personal property specified by the Internal Revenue 

Service. Specially minted United States platinum, gold, and silver 

bullion coins, palladium bullion and certain state-issued coins are 

permissible Roth IRA investments. 

I. Required minimum distributions calculators - You are not 

required to take minimum distributions from your Roth IRA during 

your lifetime. Below is a summary of the Roth IRA distribution 

rules applicable to your beneficiary(ies) under Treasury Regulations 

Section 1.408-8 after your death. 

1. Your designated beneficiary is determined based on the 

beneficiary(ies) designated as of the date of your death and 

who remains your beneficiary(ies) as of September 30 of the 

year following the year of your death. If you die, 

a. Before your required beginning date, the entire amount 

remaining in your account will, at the election of your 

beneficiary or beneficiaries, either 

i. Be distributed by December 31 of the year containing 

the fifth anniversary of your death, or 

ii. 

Be distributed in equal or substantially equal 

payments over the life or life expectancy of your 

designated beneficiary or beneficiaries. 

Your beneficiary or beneficiaries must elect either option (i) or 

(ii) by December 31 of the year following the year of your death. 

If no election is made, distribution will be made in accordance 

with (i). In the case of distributions under (ii), distributions must 

commence by December 31 of the year following the death. If 

your spouse is the beneficiary, distributions need not commence 

until December 31 of the year you would have attained age 70½, 

if later. If a beneficiary(ies) other than an individual or qualified 

trust as defined by the Regulations is named, you will be treated 

as having no designated beneficiary(ies) of your Roth IRA for 

purposes of determining the distribution period. If there is no 

designated beneficiary of your Roth IRA, the entire Roth IRA must 

be distributed by December 31 of the year containing the fifth 

anniversary of your death. 

A spouse who is the sole designated beneficiary of your entire 

Roth IRA may elect to redesignate your Roth IRA as his or her 

own. Alternatively, the sole spouse beneficiary will be deemed to 

elect to treat your Roth IRA as his or her own by either (1) making 

contributions to your Roth IRA or (2) failing to timely remove a 

required minimum distribution from your Roth IRA. Regardless of 

whether or not your spouse is the sole beneficiary of your Roth IRA, 

a spouse beneficiary may roll over his or her share of the assets to 

his or her own Roth IRA. 

2. These transactions are often complex. If you have any 

questions regarding required minimum distributions, please 

see a competent tax advisor. 




Page 13 of 16 


Income tax consequences of establishing a Roth IRA 

A. Tax-deferred earnings: The investment earnings of your Roth 

IRA are not subject to federal income tax unless and until taxable 

distributions are made (or, in certain circumstances, when taxable 

distributions are deemed to be made). 



B. Tax credit for contributions - For taxable years beginning on 

or after January 1, 2002 through December 31, 2006, you may 

be eligible to receive a tax credit on your traditional or Roth IRA 

contributions equaling a percentage of your qualified retirement 

savings contributions not exceeding $2,000. This credit will be 

allowed in addition to any tax deduction that may apply, and may 

not exceed $1,000 in a given year. You may be eligible for this tax 

credit if you are 

• age 18 or older as of the close of the taxable year, 

• not a dependent of another taxpayer, and 

• not a full-time student 

The credit is based upon your income (see chart below) and will 

range from 0 to 50 percent of eligible contributions. 

Adjusted Gross Income 

Joint Return Head of Household All Other Cases Applicable 

Percentage 

Over Not Over Over Not Over Over Not Over 

30,000 22,500 15,000 50 

30,000 32,500 22,500 24,375 15,000 16,250 20 

32,500 50,000 24,375 37,500 16,250 25,000 10 

50,000 37,500 25,000 0 

* Adjusted gross income excludes foreign earned income and income for Guam, 

America Samoa, North Mariana Islands and Puerto Rico 

In order to determine the amount of your qualified retirement 

savings contributions, you add all of the contributions made to 

your traditional or Roth IRA and reduce these contributions by any 

distributions that you may have taken during the testing period. 

The testing period begins two years prior to the year for which the 

credit is sought. In order to determine your tax credit, multiply the 

applicable percentage from the chart below by the amount of your 

retirement savings contributions that do not exceed $2,000. 



For 2007, you may be able to claim the contribution tax credit if your 

MAGI is not more than $52,000 if your filing status is married filing 

jointly, $39,000 if your filing status is head of household or $26,000 

in all other cases. 

C. Nondeductible contributions: All contributions to your Roth IRA 

are nondeductible. 

D. Taxation on distributions - You do not include in your gross 

income qualified distributions or distributions that are a return of 

your regular contributions from your Roth IRA(s). You also do not 

include distributions from your Roth IRA that you roll over tax 

free into another Roth IRA. You may have to include part of other 

distributions in your income. You report Roth IRA distributions that 

are not qualified distributions on IRS Form 8606, attached to your 

federal income tax return. 

What are qualified distributions? - A qualified distribution is 

any payment or distribution from your Roth IRA that meets the 

following requirements: 

1. It is made after the 5-year period beginning with the first 

taxable year for which a contribution was made to a Roth IRA 

set up for your benefit, and 

2. The payment or distribution is: 

(a) Made on or after the date you reach age 59 ½, 

(b) Made because you are disabled, 

(c) Made to a beneficiary or to your estate after your death, 

or 

3. One that meets the requirements listed under first-time 

home purchase expenses under early distribution penalty 

expectations below (up to a $10,000 lifetime limit). 

Publication 590 summarizes these rules in a flowchart, 

Figure 2-1, Is the Distribution from Your Roth IRA a Qualified 

Distribution? 

Ordering rules for distributions - If you receive a distribution 

from your Roth IRA that is not a qualified distribution, part of 

it may be taxable. There is a set order in which contributions 

(including conversion contributions) and earnings are considered to 

be distributed from your Roth IRA. For these purposes, disregard 

the withdrawal of excess contributions and earnings on them 

(discussed later). The distributions are ordered as follows: 

1. Regular contributions 

2. Conversion contributions, on a first-in-first-out basis (generally, 

total conversions form the earliest year first). See Aggregation 

(grouping and adding) rules, later. Take these conversion 

contributions into account as follows: 

(a) Taxable portion (the amount required to be included in 

gross income because of conversion) first, and then the 

(b) Non-taxable portion. 

3. Earnings on contributions. 

Disregard rollover contributions from other Roth IRAs for this 

purpose. 

Aggregation (grouping and adding) rules - Determine the taxable 

amounts distributed (withdrawn), distributions, and contributions by 

grouping and adding them together as follows: 

• Add all distributions from all your Roth IRAs during the year 

together. 

• Add all regular contributions made for the year after the close 

of the year, but before the due date of your return) together. 

Add this total to the total undistributed regular contributions 

made in prior years. 

• Add all conversion contributions made during the year 

together. For purposes of the ordering rules, in the case of 

any conversion in which the conversion distribution is made in 

2004 and the conversion contribution is made in 2005, treat 

the conversion contribution as contributed before any other 

conversion contributions made in 2005. 

Add any recharacterized contributions that end up in a Roth IRA 

to the appropriate contribution group for the year that the original 

contribution would have been taken into account if it had been 

made directly to the Roth IRA. 

Disregard any recharacterized contribution that ends up in an IRA 

other than a Roth IRA for the purpose of grouping (aggregating) 

both contributions and distributions. Also disregard any amount 

withdrawn to correct an excess contribution (including the earnings 

withdrawn) for this purpose. 

Worksheet 2-3 How Do You figure the Taxable Part? In Publication 

590 may be used if you receive a taxable distribution from your 

Roth IRA. 

Example - On October 15, 1999, Justin converted all $80,000 in 

his traditional IRA to his Roth IRA. His Forms 8606 from prior years 

show that $20,000 of the amount converted is his basis. Justin 

included $60,000 ($80,000-$20,000) in his gross income. On 

February 23, 2004, Justin makes a regular contribution of $3,000 to 

a Roth IRA. On November 7, 2004 Justin takes a $5,000 distribution 

from his Roth IRA. The first $3,000 of the distribution is a return of 

Justin’s regular contribution and is not includible in his income. The 

next $2,000 of the distribution is not includible in income because 

it was included previously. Because the $2,000 is distributed after 

the end of the applicable 5-year period for a qualified distribution, it 




Page 14 of 16 


is not subject to the 10% additional tax on early distributions. Justin 

does not have to file Form 5329 with his return to report an early 

distribution or figure additional tax or claim an exception. 

Distributions after owner's death - If a distribution to a beneficiary 

is not a qualified distribution, it is generally includible in the 

beneficiary's gross income in the same manner as it would have 

been included in the Owner's income had it been distributed to the 

IRA Owner when he or she was alive. 

If the owner of a Roth IRA dies before the end of: 

• The 5-year period beginning with the first taxable year for 

which a contribution was made to a Roth IRA set up for the 

owner's benefit, or 

• The 5-year period starting with the year of a conversion 

contribution from a traditional IRA to a Roth IRA, each 

type of contribution is divided among multiple beneficiaries 

according to the pro-rata share of each. See Ordering Rules 

for Distributions above. 

Recognizing Losses on Investments - If you have a loss on your 

Roth IRA investment, you can recognize the loss on your income 

tax return, but only when all the amounts in all of your Roth IRA 

accounts have been distributed to you and the total distributions are 

less than your unrecovered basis. Your basis is the total amount of 

contributions in your Roth IRAs. You can the loss as a miscellaneous 

itemized deduction, subject to the 2%-of-adjustedgross-income 

limit that applies to certain miscellaneous itemized deductions on 

Schedule A, Form 1040. 

E. Portability of your assets - Your Roth IRA may be directly 

transferred to another Roth IRA or yours, provided that all of the 

applicable rollover rules are followed. Rollover is a term used 

to describe a tax-free movement of cash or other property to 

your Roth IRA from another Roth IRA, or in a conversion, from 

a traditional IRA or SIMPLE IRA. SIMPLE IRA funds may not be 

rolled to your Roth IRA in a conversion during the first two years 

you participate in your employer's SIMPLE IRA plan. The rollover 

rules are generally summarized below. These transactions are often 

complex. If you have any questions regarding a rollover, please see 

a competent tax advisor. 

1. Roth IRA to Roth IRA rollovers - Funds distributed from 

your Roth IRA may be rolled over to any Roth IRA of yours if 

the requirements of IRC section 408(d)(3) are met. A proper 

Roth IRA to Roth IRA rollover is completed if all or part of 

the distribution is rolled over not later than 60 days after the 


Roth IRA to Roth IRA rollover from the distributing Roth IRA 

during the 12 months preceding the date you receive the 

distribution. Further you may roll the same dollars or assets 

only once every 12 months. 

2. IRA to Roth IRA rollovers - If your adjusted gross income is 

not more than $100,000 you are eligible to roll over (or convert) 

all or any portion of your existing traditional IRA(s) into your 

Roth IRA(s). The amount of the rollover from your traditional 

IRA to your Roth IRA shall be treated as a distribution for 

income tax purposes and is includible in your gross income 

(except for any nondeductible contributions). Although the 

rollover amount is generally included in income, the 10 

percent early distribution penalty shall not apply to rollovers 

or conversions from a traditional IRA to a Roth IRA regardless 

of whether you qualify for any exceptions to the 10 percent 

penalty. 

3. Simple IRA to Roth IRA rollovers - Funds may be distributed 

from your SIMPLE IRA and rolled over to your Roth IRA in 

a conversion without IRS penalty, provided two years have 

passed since you first participated in a SIMPLE IRA plan 

sponsored by your employer. As with traditional IRA to Roth 

IRA rollovers, the requirements of Code section 408(d)(3) 

must be met. A proper SIMPLE IRA to Roth IRA rollover is 

completed if all or part of the distribution is rolled over not later 

than 60 days after the distribution is received. You may not 

have completed another SIMPLE IRA to Roth IRA or SIMPLE 

IRA to SIMPLE IRA rollover from the distributing SIMPLE 

IRA during the 12 months preceding the date you receive the 

distribution. Further, you may roll over the same dollars or 

assets only once every 12 months. 

4. Employer-sponsored retirement plans to Roth IRA 

rollovers - For distribution before 2008 you may not roll over 

directly any eligible rollover distribution from an employersponsored 

retirement plan to a Roth IRA. An eligible rollover 

distribution is defined generally as any distribution from 

a qualified plan, tax sheltered annuity, or 457(b) deferred 

compensation plan to a Roth IRA (other than distributions to 

non spouse beneficiaries) unless it is part of certain series of 

substantially equal periodic payments, a required minimum 

distribution, or a hardship distribution. 

If you wish to roll over a pre- 2008 eligible rollover distribution 

to a Roth IRA, you must first roll over the distribution to a 

traditional IRA. Once this has been done, if eligible, you may 

then roll over the traditional IRA funds to the Roth IRA in a 

conversion. 

For distributions after 2007, you may roll over directly an 

eligible rollover distribution from an employer-sponsored 

retirement plan to a Roth IRA. The rollover is subject to the 

restrictions on IRA to Roth IRA Rollovers described in 2. 

above. 

After 2005, you may roll over, directly or indirectly, a distribution 

from a Designated Roth Account to a Roth IRA. A Designated 

Roth Account is an account established in a qualified plan, 

such as a 401(k) plan, or in a 403(b) annuity, to hold nondeductible 

elective deferrals made pursuant to a Qualified 

Roth Contribution Program. 

For every year after 2005, you may roll over, directly or 

indirectly, a distribution from a Designated Roth Account 

to a Roth IRA. A Designated Roth Account is an account 

established in a qualified plan, such as a 401(k) or 403 (b) plan, 

to hold nondeductible elected deferrals made pursuant to a 

qualified Roth contribution program. 

5. Roth IRA to employer sponsored retirement plans - You may 

not roll over any distribution from a Roth IRA to an employer's 

qualified retirement plan, tax-sheltered annuity, or 457(b) 

deferred compensation plan. 

6. Written election - At the time you make a proper rollover to 

a Roth IRA, you must designate to the Trustee/Custodian, in 

writing, your election to teat that contribution as a rollover. 

Once made, the rollover election is irrevocable. 

F. Spousal Roth IRA contributions - If you are married and have 

compensation for a particular year, you may make payments to a 

Roth IRA established for the benefit of your spouse. You must file 

a joint tax return for the year for which the contribution is made. 

The amount you may contribute to your Roth IRA and your 

spouse's Roth IRA is the lesser of 100 percent of your combined 

compensation or $6,000 for 2002-2004, $8,000 for 2005-2007, 

and $10,000 for 2008. This amount may be increased with possible 

cost-of-living adjustments in 2009 and beyond. However, you 

may not contribute more than the applicable limit as mentioned 

previously, to any one Roth IRA. 

G. Carryback contributions - A contribution is deemed to have been 

made on the last day of the preceding taxable year if you make a 

contribution by the deadline for filing your income tax return (not 

including extensions), and you designate that contribution as a 

contribution for the preceding taxable year. For example, if you are 

a calendar year taxpayer and you make your Roth IRA contribution 

on or before April 15, your contribution is considered to have been 

made for the previous tax year if you designated it as such. 

Limitations and Restrictions 

A. Special tax treatment - Capital gains treatment and the favorable 




Page 15 of 16 


five or ten year forward averaging tax authorized by IRC Section 402 

do not apply to taxable Roth IRA distributions. 

B. Income tax treatment - Any taxable withdrawal from your Roth 

IRA is subject to federal income tax withholding. You may, however, 

elect not to have withholding apply to your Roth IRA withdrawal. If 

withholding is applied to your withdrawal, not less than 10 percent 

of the amount withdrawn must be withheld. 

C. Prohibited transactions - If you or your beneficiary engage in 

a prohibited transaction with your Roth IRA, as described in IRC 

Section 4975, your Roth IRA will lose its tax-exempt status and 

you must include the value of your account in your gross income 

for that taxable year. The following transactions are a non exclusive 

list of examples of transactions that can be prohibited transactions 

with your Roth IRA: (1) taking a loan from your Roth IRA; (2) buying 

property for personal reasons; or (3) receiving certain bonuses or 

premiums because of your Roth IRA. 

D. Pledging - If you pledge any portion of your Roth IRA as collateral 

for a loan, the amount so pledged will be treated as a distribution 

and will be included in your gross income for that year. 

Federal tax penalties 

A. Excess contribution penalty - An excise tax of six percent is 

imposed upon any excess contribution you make to your Roth 

IRA. This tax will apply each year in which an excess remains in 

your Roth IRA. An excess contribution is any contribution amount 

which exceeds your contribution limit, excluding rollover (including 

properly converted) and direct transfer amounts. Your contribution 

limit is the lesser of the contribution limits previously discussed 

or 100 percent of your compensation for the taxable year. Rules 

for withdrawing excess contributions are discussed under Early 

Distribution Penalty Exceptions below. 

B. Early distribution penalty - If you receive a distribution that is not 

a qualified distribution, you may have to pay the 10% additional tax 

on early distributions as explained in the following paragraphs. 

Distributions of conversion contributions within 5-year period. 

If, within the 5-year period starting with the first day of your tax 

year in which you convert an amount from a traditional IRA to a 

Roth IRA, you take a distribution from a Roth IRA, you may have 

to pay the 10% additional tax on early distributions. You generally 

must pay the 10% additional tax on any amount attributable to the 

part of the amount converted (the conversion contribution) that 

you had to include in income. A separate 5-year period applies to 

each conversion. See Ordering rules for Distributions, above, to 

determine the amount, if any, of the distribution that is attributable 

to the part of the conversion contribution that you had to include in 

gross income. 

The 5-year period used for determining whether the 10% early 

distribution tax applies to a distribution from a conversion 

contribution is separately determined for each conversion, and is 

not necessarily the same as the 5-year period used for determining 

whether a distribution is a qualified distribution. 

For example, if a calendar year taxpayer makes a conversion 

contribution on February 25, 1999, and makes a regular contribution 

for 1998 on the same date, the 5-year period for the conversion 

begins January 1, 1999, while the 5-year period for the regular 

contribution begins on January 1, 1998. Unless one of the 

exceptions listed later applies, you must pay the additional tax 

on the portion of the distribution attributable to the part of the 

conversion contribution that you had to include in income because 

of the conversion. 

You must pay the 10% additional tax in the year of the distribution, 

even if you had included the conversion contribution in an earlier 

year. You also must pay the additional tax on any portion of the 

distribution attributable to earnings on contributions. 

Other early distributions - Unless one of the exceptions listed below 

applies, you must pay the 10% additional tax on the taxable part of 

any distributions that are not qualified distributions. 

C. Early distribution penalty exceptions 

You have reached age 59½ - The distribution is not a qualified 

distribution because it has not been at least 5 years form the 

beginning of the year in which you first set up and contributed to a 

Roth IRA. 

Death - Payments are made to your beneficiary after your death 

Disability - You are disabled (unable to do any substantial gainful 

activity due to a physical or mental condition expected to result in 

your death or be of long, continued, and indefinite duration). 

Substantially equal payments - The distributions are part of a 

series of substantially equal payments over your life (or your life 

expectancy) or over the lives (or the joint life expectancies) of you 

and your beneficiary. You must user an IRS-approved distribution 

method and you must take at least one distribution annually for this 

exception to apply. The "required minimum distribution" method is 

described in Publication 590. Note that this method calculates the 

exact amount required to be distributed, not the minimum amount. 

Other IRS-approved methods are described in Revenue Ruling 

2002-62 in Internal Revenue Bulletin 2002-42. These methods 

are complex and generally require professional assistance to 

implement. 

Substantially equal payments must generally continue until at least 

5 years after the date of the first payment or until you reach age 

59½, whichever is later. If a change from an approved distribution 

method is made before the end of the appropriate period, any 

payments you receive before you reach age 59½ will be subject to 

the 10% additional tax. This is true even if the change is made after 

you reach age 59½ . The payments will not be subject to the 10% 

additional tax if another exception applies or if the change is made 

because of your death or disability. 

If you are receiving a series of substantially equal periodic 

payments, you can make a one-time switch to the required 

minimum distribution method at any time without incurring the 

additional tax. Once a change is made, you must follow the required 

minimum distribution method in all subsequent years. 

Levy - The distribution is due to the IRS levy of the Roth IRA 

assets. 

Health insurance - Distribution taken by an Roth IRA holder who 

received federal or state unemployment compensation for 12 

consecutive weeks and who is using the distribution(s) to pay for 

health insurance is not subject to the 10% early distribution penalty. 

The distribution must be taken in the year that the unemployment 

was received or in the year following. In addition, the distribution 

cannot be taken more than 60 days after the Roth IRA holder is 

reemployed. 

Medical expenses - Distributions used for unreimbursed medical 

expenses that exceed 7.5 percent of the Roth IRA holder's adjusted 

gross income are not subject to the 10% early distribution penalty. 

Higher education expenses - Under this exception to the 10 

percent early distribution penalty, a Roth IRA holder may take 

distributions from his or her Roth IRA to the extent that such 

distributions do not exceed the qualified higher education expenses 

of the taxpayer or his or her dependents for the taxable year. (IRC 

Sec. 72(t)(2)(E)). Generally, penalty-free distributions may be taken 

to pay for the qualified higher education expenses of the Roth IRA 

holder, the Roth IRA holder's spouse, and any child or grandchild 

of the taxpayer or the taxpayer's spouse at an eligible education 

institution. 

Higher education expenses are defined as tuition, books, fees, 

supplies and equipment applied to education at an eligible 

educational institution. 

First-time home purchase expenses - Distributions from Roth 

IRAs to pay for qualified first-time home purchase expenses may 

be taken penalty free (IRC Sec. 72(t)(2)(F)). A qualified first-time 

home purchase expense distribution is defined as any distribution 

received by an individual to the extent that the distribution is used 

by the Roth IRA holder before the close of the 120th day after the 




Page 16 of 16 


day on which the distribution is received. The distribution may 

be taken to pay the qualified acquisition costs with respect to a 

principal residence of a first-time home buyer who is the Roth IRA 

holder, the Roth IRA holder's spouse, or the Roth IRA holder's 

child, grandchild or ancestor of the Roth IRA holder or his or her 

spouse. 

The aggregate amount of Roth IRA distributions taken by an 

Roth IRA holder that may be treated as qualified first-time home 

purchase expenses can not exceed a lifetime limit of $10,000. 

Under IRC Sec. 72(t)(8)(D)(i), a first-time home buyer is defined 

as an individual (and, if married, the individual's spouse) that had 

no present ownership interest in a principal residence during the 

two-year period ending on the date of acquisition of the principal 

residence. 

Qualified reservist distribution - Under the Pension Protection 

Act of 2006, effective for distributions effective for distributions 

to reservists called to active duty after September 11, 2001 and 

before December 31, 2007, a member of a reserve component of 

the United States armed forces who is ordered or called to active 

duty for a period in excess of 179 days or indefinitely, may take a 

penalty-free distribution at any time before the end of the active 

duty period. Reservists who paid the penalty tax under prior law on 

a qualified reservist distribution may claim a refund or credit. Until 

August 18, 2007, the claim may be made without regard to usual 

time limitations on tax credits or refunds. 

Federally-recognized disasters - Under the Katrina Emergency 

Tax Relief Act and conforming relief granted by the Internal 

Revenue Service, victims of recent Gulf-Coast hurricanes may 

receive up to $100,000 in penalty-free IRA distributions. These 

provisions are explained in IRS Publication 4492, Information for 

Taxpayers Affected by Hurricanes Katrina, Rita, and Wilma. The 

federal government may provide similar relief to the victims of 

future disasters. 

Return of excess contributions - Distributions from Roth IRAs 

that timely return to you excess contributions, as defined above, are 

not subject to the early distribution penalty. Note that the earnings 

on the returned excess contributions will be subject to the 10% 

penalty unless another exception applies. The return of excess 

contributions and related earnings for a tax year is timely if made 

before the due date of your federal income tax return (plus filing 

extensions) for that year. If you have filed your tax return on time, 

a special rule allows you up to 6 months from the original due date 

(usually April 15) to withdraw the excess contributions, without 

penalty. 

D. Penalty reporting - You must file Form 5329 with the Internal 

Revenue Service to report and remit any penalties or excise taxes. 

Other 

A. IRS plan approval - The Agreement used to establish this Roth IRA 

has been approved by the Internal Revenue Service. The Internal 

Revenue Service approval is a determination only as to form. It is 

not an endorsement of the plan in operation or of the investments 

offered. 

B. Additional information - You may obtain further information on 

Roth IRAs from your District Office of the Internal Revenue Service. 

In particular, you may wish to obtain IRS Publication 590, Individual 

Retirement Arrangements. All references made to Tables and 

Schedules in Publication 590 in this Disclosure Statement are to the 

2004 edition. 


Privacy Policy 

from Genworth Financial Wealth 

Management, Inc. and 

Genworth Financial Trust Company 

Important Information. No action required. 

At Genworth Financial and our family of companies, we appreciate your business and the trust you have placed in us. Our 

privacy philosophy reflects the value of your trust. We are committed to protecting the personal data we obtain about you. 

Please know that we do not sell your personal data. In order to provide services or products to you, we may use your personal 

data. To further understand our Privacy Policy, please review the following details. 

What personal data may we collect about you? 

We may collect your personal data to provide you with the products or services you requested. We may obtain it from your 

application, your transactions with us, and outside parties such as consumer reporting agencies. We may collect personal 

data about you to process transactions and to prevent fraud. Where required, we will obtain your consent before collecting it. 

The personal data may include: 

• Name and address 

• Income and assets 

• Accounts at other institutions 

• Social security or taxpayer identification number 

What do we do with your personal data? 

We comply with Federal and State requirements related to the protection and use of your data. This means that we only share 

data where we are permitted or required to do so. We also may be required to obtain your authorization before disclosing 

certain types of personal data. 

We may use your personal data in order to: 

• Process transactions 

• Respond to your requests 

• Prevent fraud 

• Comply with regulatory requirements 

• Share with you related products and services we offer 

We do not sell personal data about current or former customers or their accounts. We do not share your personal data for 

marketing purposes. When affiliates or outside companies perform a service on our behalf, we may share your personal data 

with them. We required them to protect your personal data, and we only permit them to use your personal data to perform 

these services. 

Examples of outside parties who may receive your personal data are: 

• Your agent or representative 

• Your brokerage firm 

• State or Federal authorities 

• Other companies or service providers supporting your policy, contract, or account. 

How do we protect your personal data? 

In order to protect your personal data, we maintain physical, electronic and procedural safeguards. We review these 

safeguards regularly in keeping with technological advancements. We restrict access to your personal data. We also train our 

employees in the proper handling of your personal data. 

Our commitment to keeping you informed. 

We will send you a Privacy Policy each year while you are our customer. In the event we broaden our data sharing practices, 

we will send you a new Privacy Policy 

R142_PrivPol-Ref/PCG (2009/07)

GFWM Disclosure brochure 

(Form adv - Schedule h) 

GFWM Disclsoure brochure (form adv - schedule h)

Effective May 2010 

Form ADV − Schedule H 

DISCLOSURE BROCHURE 

SEC File Number − 801 56323 

IA Firm CRD Number - 109018 

Genworth Financial 

Wealth Management, Inc. 

2300 Contra Costa Blvd., 

Suite 600 

Pleasant Hill, CA 94523 

800 664.5345 

GenworthWealth.com 

R273-SchH-Ref (2010/04) 

This brochure provides Clients with information about the advisory services of Genworth Financial Wealth Management, Inc. This 

information has not been reviewed, approved or verified by any governmental authority. 

Genworth Financial Wealth Management, Inc.

Table of Contents 

Introduction .................................................................................................. 1 

DESCRIPTION OF ADVISORY SERVICES .............................................................................. 1 

OVERVIEW - GFWM Advisory Services ........................................................................... 1 

RISK/RETURN PROFILES ....................................................................................... 1 

ASSET ALLOCATION APPROACHES .............................................................................. 2 

MUTUAL FUND, EXCHANGE TRADED FUND (ETF) AND VARIABLE ANNUITY INVESTMENT SOLUTIONS. ................... 2 

PRIVATELY MANAGED ACCOUNT INVESTMENT SOLUTIONS . ....................................................... 3 

Individually Managed Account (“IMA”) .......................................................................... 4 

Manager Select Account (“MSA”). ............................................................................. 4 

GFAM Principal Return Exposure Strategy (“PRX”) ................................................................ 4 

GFAM Preservation Strategy ................................................................................. 5 

GFAM Fixed Income Accounts ................................................................................ 5 

Consolidated Managed Account (“CMA”). ....................................................................... 5 

UNIFIED MANAGED ACCOUNT (“UMA”) INVESTMENT SOLUTIONS .................................................. 6 

Genworth Multiple Strategies (“GMS”) Accounts ................................................................. 7 

Active Return Opportunities (“ARO”) Accounts ................................................................... 8 

Privately Managed Portfolios (“PMP”) Accounts .................................................................. 9 

SELECTION AND REVIEW OF PORTFOLIO STRATEGISTS AND INVESTMENT MANAGEMENT FIRMS ...................... 10 

GFWM’S ACTIVELY MANAGED PROTECTION (“AMP”) SERVICE ......................................................11 

REVIEW OF ACCOUNTS ....................................................................................... 12 

TRADE EXECUTION AND BROKERAGE ALLOCATION .............................................................. 12 

PROXY VOTING POLICY ....................................................................................... 13 

INVESTMENT IN GE AND GENWORTH SECURITIES ............................................................... 13 

INVESTMENT AND TAX RISKS ................................................................................. 14 

FEES. .......................................................................................................... 14 

OVERVIEW .................................................................................................. 14 

INITIAL CONSULTING FEE (“ICF”) .............................................................................. 14 

ACCOUNT FEES ............................................................................................. 14 

FINANCIAL ADVISOR FEE ..................................................................................... 14 

GFWM ADVISORY FEE SCHEDULES. ............................................................................ 15 

INVESTMENT MANAGER FEE .................................................................................. 16 

SERVICES PROVIDED FOR FEES ................................................................................ 16 

ADMINISTRATIVE FEE FOR ADMINISTRATIVE/NON-MANAGED ACCOUNTS ........................................... 17 

FEES FOR OTHER SERVICES ................................................................................... 17 

OTHER FEE DISCLOSURES .................................................................................... 18 

CUSTODY SERVICES AND FEES ................................................................................ 18 

GENERAL INFORMATION REGARDING CLIENT ACCOUNTS ............................................................ 19 

CLIENT REPORTS . ........................................................................................... 19 

IRA AND ERISA ACCOUNTS ................................................................................... 19 

REASONABLE RESTRICTIONS, PLEDGING AND WITHDRAWING SECURITIES ......................................... 19 

PROSPECTUSES & OTHER INFORMATION ....................................................................... 19 

ACCOUNT LIQUIDITY RESERVE ................................................................................ 19 

DELIVERY OF FUND REDEMPTION PROCEEDS ................................................................... 20 

PARTICIPATION OR INTEREST IN CLIENT TRANSACTIONS ......................................................... 20 

GFWM EDUCATION AND BUSINESS STANDARDS .................................................................... 20 

BACKGROUND OF PRINCIPAL EXECUTIVE OFFICERS & INVESTMENT MANAGEMENT STAFF ........................... 20 

CONFLICTS OF INTEREST AND FINANCIAL INDUSTRY AFFILIATES ...................................................... 21 

BANKING INSTITUTION ...................................................................................... 21 

INVESTMENT COMPANIES .................................................................................... 21 

OTHER INVESTMENT ADVISERS ............................................................................... 22 

BROKER-DEALERS ........................................................................................... 22 

CLIENT REFERRALS .......................................................................................... 22 

OTHER RELATIONSHIPS AND COMPENSATION .................................................................. 22

Introduction 

Genworth Financial Wealth Management, Inc. (“GFWM”) is the sponsor 

of the Genworth Financial Wealth Management Platform (the 

“Platform”) through which it offers its advisory services to its Clients. 

GFWM is an investment adviser registered with the U.S. Securities 

and Exchange Commission providing various investment supervisory 

services to a variety of Clients, including individuals, corporations, 

partnerships, pension and profit-sharing plans, trusts and others. 

GFWM offers various Platform options (“Investment Solutions”) for 

the Client’s investment objectives and financial condition. Each of 

the Investment Solutions may be implemented with a number of options, 

such as a selection of an Asset Allocation Approach, a group of 

available “Portfolio Strategists,” a variety of account “Mandates” and 

a range of “Risk/Return Profiles,” so that the Client can customize a 

strategy by which each of the Client’s accounts under the Platform 

will be managed or maintained. The specific Investment Solution and 

the components of the strategy selected for a Client’s account are referred 

to as the Client’s investment “Strategy.” A Client may establish 

one or more investment accounts (each an “Account”) through the 

Platform, and the Client’s Accounts are collectively referred to as the 

Client’s “Portfolio.” 

GFWM is a wholly owned subsidiary of Genworth Financial, Inc., a 

publicly held insurance holding company. As a manager for certain Privately 

Managed Account and Unified Managed Account Investment 

Solutions, GFWM’s Genworth Financial Asset Management division 

(“GFAM”) will continue to provide services for investment products 

previously offered by Genworth Financial Asset Management, Inc. 

GFWM serves as the investment advisor for the AssetMark Funds, a 

series of sub-advised no-load mutual funds that are available in certain 

Investment Solutions offered under the Platform, and the Genworth 

Financial Contra Fund, a registered investment company used 

by GFWM in risk mitigation strategies in some Investment Solutions, 

and the Genworth Variable Insurance Trust (“GVIT”), a series of noload 

funds made available exclusively to owners of variable annuity 

and variable life insurance contracts (“Variable Contracts”) issued by 

Genworth Life and Annuity Insurance Company (“GLAIC”) and Genworth 

Life Insurance Company of New York (“GLICNY”), both affiliates 

of GFWM. 

DESCRIPTION OF ADVISORY SERVICES 

OVERVIEW - GFWM Advisory Services 

GFWM provides a variety of investment advisory services to Clients. 

The services discussed in this brochure are investment advice and 

management for: 

• Mutual Fund Accounts 

• ETF Accounts 

• Variable Annuity Accounts 

• Privately Managed Accounts (“PMA”), including: 

• Individually Managed (“IMA”) Accounts, 

• Manager Select Accounts (“MSA”), 



• GFAM Fixed Income Accounts, and 

• Consolidated Managed Accounts (“CMA”) 

• Unified Managed Accounts, including: 

• Privately Managed Portfolios (“PMP”) Accounts, 

• Genworth Multiple Strategies (“GMS”) Accounts, and 

• Active Return Opportunities (“ARO”) Accounts 

Schedule H Referrer Model 

Page 1 of 22 


Referral of Financial Advisor Clients 

GFWM receives Client referrals through representatives of broker 

dealer firms and investment adviser firms (these firms are referred to 

in this brochure as “Financial Advisory Firms” and their representatives 

are referred to as the “Financial Advisors”). The Financial Advisors 

consult with Clients to assess their financial situation and identify 

their investment objectives in order to implement Investment Solutions 

and Strategies designed to meet the Client’s financial needs. 

A Financial Advisor referring a Client to GFWM for advisory services 

interviews the Client and makes a determination that an Investment 

Solution is suitable for the Client before making the referral to GFWM. 

Working with the Financial Advisor, a GFWM Client selects an Investment 

Solution for the Client’s Account, and the components of the 

Client’s Strategy, including the Client’s desired and appropriate Risk/ 

Return Profile. Financial Advisors are required to contact Clients at 

least annually regarding the suitability of the Client’s chosen Investment 

Solution(s). Based on a Client’s individual financial circumstances, 

investment needs and goals, and level of risk tolerance, GFWM 

manages each Client Account according to the Client’s selected Investment 

Solution under the terms of the GFWM Investment Management 

Services Agreement (“IMSA”). 

GFWM’s Investment Management Services Agreement 

Pursuant to the IMSA, Clients grant GFWM the authority to manage 

the assets in their Accounts on a fully discretionary basis. The grant 

of discretionary authority to GFWM includes, but is not limited to the 

authority: 

• to take any and all actions on the Client’s behalf that GFWM determines 

to be customary or appropriate for a discretionary investment 

adviser to perform, including the authority to buy, sell, 

select, remove, replace and vote proxies for securities, including 

mutual fund shares and including those advised by GFWM or an 

affiliate, and other investments, for the Account, and to determine 

the portion of assets in the Account to be allocated to each 

investment or asset class and to change such allocations; 

• to select the broker-dealers or others with which transactions for 

the account will be effected; 

• to retain and replace, or not, any person providing investment advice, 

securities recommendations, model portfolios or other services 

to GFWM, including without limitation, Portfolio Strategists 

giving advice with regard to the Mutual Fund, ETF, Variable Annuity 

and CMA Investment Solutions and Investment Management 

Firms giving advice with regard to PMA and UMA Investment 

Solutions, as deemed appropriate by GFWM;and 

• with regard to IMA, MSA and CMA Investment Solutions, to retain 

and replace any person providing discretionary investment 

management of the Account, as deemed appropriate by GFWM. 

Custodial Services 

The assets of each Client Account may be established with Genworth 

Financial Trust Company (“GFTC”), an affiliate of GFWM, or such other 

Custodian that may be agreed upon with GFWM (“Custodian,” which 

term shall include GFTC) for the custody of the Account assets. 

Not all Investment Solutions may be offered at all Custodians. 

RISK/RETURN PROFILES 

In establishing an Account, the Client may complete a questionnaire, 

or otherwise provide information to the Financial Advisor, to enable 

the Client and the Financial Advisor to identify the Client’s risk tolerance 

and rate of return objectives. The Client may provide information 

concerning their investment experience, anticipated need for liquidity, 

R273-SchH-Ref (2010/04)

potential timing of the need for retirement funds, and other investment 

needs and parameters. This information will assist the Client and 

the Financial Advisor in selecting which of the Investment Solutions, 

Risk/Return Profiles and Strategies are most closely aligned with the 

Client’s investment objectives. 

One of the fundamental elements of establishing the Client’s investment 

objective is identifying the appropriate Risk/Return Profile for 

each of the Client’s Accounts in their GFWM Portfolio. These Risk/Return 

Profiles range from most conservative (lowest estimated risk and 

lowest potential return) to most aggressive (highest estimated risk 

and highest potential return). For all Investment Solutions, other than 

certain Individually Managed Accounts (“IMA”s) and Manager Select 

Accounts (“MSA”s), the Client, with the assistance of the Client’s Financial 

Advisor, selects a Risk/Return Profile for the management of 

the Client’s Account. 

The investment objectives for each of the six Risk/Return Profiles are 

listed below: 

Profile 1 – Conservative 

The profile is designed for an investor who wants to focus on preservation 

of capital as a primary goal and wishes to avoid downside 

risk. 

Profile 2 – Moderate Conservative 

The profile is designed for an investor who seeks to preserve capital 

but wishes to earn a return sufficient to preserve purchasing 

power. 

Profile 3 –Moderate 

The profile is designed for an investor who seeks to balance downside 

risks to capital and capital appreciation. 

Profile 4 – Moderate Growth 

The profile is designed for an investor who seeks enhanced capital 

appreciation but is willing to accept greater risk of downside loss 

and volatility of returns. 

Profile 5 – Growth 

The profile is designed for an investor who seeks significant capital 

appreciation and is tolerant of the risk of downside loss and volatility 

of returns. 

Profile 6 – Maximum Growth 

The profile is designed for an investor who seeks the highest level 

of capital appreciation and is willing to accept the risk of downside 

loss and volatility of returns. 

The percentage exposure to equity securities for each Risk/Return 

Profile is likely to be higher for each Risk/Return Profile as the level 

of aggressiveness increases from Conservative through Maximum 

Growth. 

GFWM establishes, and periodically reviews and confirms or adjusts, 

guidelines for each of the Risk/Return Profiles. GFWM provides these 

guidelines to the independent investment management firms, referred 

to as the “Portfolio Strategists,” that provide asset allocations 

for the Mutual Fund, ETF, Variable Annuity and CMA Investment Solutions 

and GFWM’s Genworth Financial Asset Management (“GFAM”) 

division uses these guidelines in its management of the UMA Investment 

Solutions. 


Page 2 of 22 


ASSET ALLOCATION APPROACHES 

The next element of establishing the Client’s investment objective is to 

identify the Asset Allocation Approach. Some Investment Solutions, 

i.e. Individually Managed Accounts and Manager Select Accounts, are 

not categorized into any one of these approaches. The following four 

Asset Allocation Approaches are available. 

Strategic Asset Allocation Approach 

• Seeks to optimize risk adjusted return while adhering to a base 

policy mix. 

• Relative market exposure will be primary determinant of return 

results. 

Tactical Constrained Asset Allocation Approach 

• Seeks to optimize risk adjusted returns while adhering to a base 

policy mix and utilizing tactical deviations from the mix in efforts 

to add additional value. 

• Relative market exposure will be a significant determinant of return 

results with further impact being driven by tactical decision 

making. 

Tactical Unconstrained Asset Allocation Approach 

• Seeks to optimize risk adjusted returns without regard to a base 

policy mix. 

• Relative return exposure will vary over time and, as a result, the 

primary driver of returns will be the decisions made regarding the 

magnitude and types of asset class exposure taken over time. 

Absolute Return Allocation Approach 

• Seeks to capture modest positive returns over time regardless of 

general market direction while managing broad market risk and 

correlation. This objective may or may not be achieved in any specific 

time frame. 

• Return results will be driven by active investment decisions made 

with regard to specific asset class exposures and security selections. 

MUTUAL FUND, EXCHANGE TRADED FUND (ETF) AND 

VARIABLE ANNUITY INVESTMENT SOLUTIONS 

For Clients selecting a Mutual Fund Account as their Investment Solution, 

their Account will be invested in no-load mutual funds (that is, 

funds that do not charge a sales load) and/or mutual funds that generally 

do charge a sales load but where the sales charge has been 

waived. The Account will be invested consistent with allocations provided 

by a Portfolio Strategist for the Risk/Return Profile selected by 

the Client. Certain Portfolio Strategists compose their mutual fund 

asset allocations utilizing only those mutual funds managed by the 

Portfolio Strategist or an affiliate of the Portfolio Strategist, and one or 

more of the Portfolio Strategists will construct their asset allocations 

exclusively using AssetMark Funds. 

For Clients selecting the ETF Investment Solution, their Account will 

be invested in exchange traded funds (“ETFs”) consistent with allocations 

provided by a Portfolio Strategist for the Risk/Return Profile 

selected by the Client. ETFs are traded daily at market determined 

prices on a national exchange in a similar manner to other individual 

equity securities. GFWM’s trading practices are discussed further 

in the Trade Execution and Brokerage Allocation section. A Portfolio 

Strategist may compose their ETF asset allocations utilizing only those 

ETFs managed by the Portfolio Strategist or an affiliate of the Portfolio 

Strategist. 

R273-SchH-Ref (2010/04)

Unless otherwise restricted by the Client and accepted by GFWM, if a 

Mutual Fund or ETF Investment Solution is chosen, the Account may 

also include non-mutual fund or non-ETF investments, as applicable. 

For example, non-mutual fund investments could be cash equivalents 

held by the Account. 

Clients selecting the Variable Annuity Investment Solution have the 

opportunity to select asset allocations developed by GFWM using 

those specific variable annuity sub-accounts included in the Prospectus 

delivered to the Client by the variable annuity issuer. GFWM has 

not selected the sub-accounts available in the variable annuity, and 

GFWM is unable to add or remove sub-accounts; the list of sub-accounts 

may be revised by each variable annuity issuer. 

The Client is entitled to receive a copy of the Prospectus for each 

mutual fund, and confirmations of each security purchased and sold 

for the Client’s account (either separately or as part of the periodic 

custodial statement) and copies of all annual and periodic reports issued 

by the mutual funds the Client holds. The Client retains the 

right to receive shareholder materials if the Account is invested in a 

Mutual Fund, ETF or Variable Annuity Investment Solution or in an Administrative/Non-Managed 

Account. In addition, the Client retains all 

indicia of beneficial ownership, including, without limitation, all voting 

power and other rights as a security holder in each of the funds held 

for the Client. Variable annuity sub-accounts will be held pursuant to 

the terms and conditions contained in a variable annuity Prospectus 

delivered to the Client by the specific variable annuity issuer. 

The standard minimum investment through the Platform will generally 

be $50,000 for Mutual Fund and Variable Annuity Accounts, and 

$100,000 for ETF Accounts. GFWM reserves the right, in its sole judgment, 

to accept certain investments below the standard minimum. 

For Mutual Fund and ETF Investment Solutions, the Client, with the 

assistance of the Client’s Financial Advisor, selects for the management 

of the Account: (1) a Risk/Return Profile; (2) an Asset Allocation 

Approach, as represented by the selected Portfolio Strategist; and (3) 

for some, but not all Mutual Fund and ETF Investment Solutions, a 

Mandate. 

For the Variable Annuity Investment Solution, the Client, with the assistance 

of the Client’s Financial Advisor, selects for the management 

of the Account: (1) a Risk/Return Profile; and (2) an Asset Allocation 

Approach, as represented by the selected Portfolio Strategist. 

Risk/Return Profiles 

The six Risk/Return Profiles, ranging in objectives from most conservative 

to most aggressive, are described above under “RISK/RETURN 

PROFILES.” 

Asset Allocation Approaches for Mutual Fund, ETF and Variable 

Annuity Investment Solutions 

In the Mutual Fund Investment Solution, Strategic Asset Allocation, 

Tactical Constrained Asset Allocation, and Absolute Return Allocation 

Approaches are available. For Strategic Asset Allocation and Tactical 

Constrained Asset Allocation approaches, the Client may choose an 

Investment Solution that invests in shares of 1. the AssetMark Funds, 

advised by GFWM; or 2) third-party mutual funds, not advised by 

GFWM. For the Absolute Return approach, only third-party mutual 

fund options are available. 


Page 3 of 22 


In the Variable Annuity Investment Solutions, GFWM’s investment of 

the Account will be consistent with a Tactical Constrained Asset Allocation 

Approach only. 

GFWM has contracted with Portfolio Strategists, which it may replace 

in its discretion, to provide allocations, by which GFWM intends to invest 

the Account, unless circumstances indicate modified allocations 

or investments are appropriate. GFWM may remove, replace or add 

to the Portfolio Strategists available on your Account in its discretion. 

Additional information about the Portfolio Strategists is provided below 

under “SELECTION AND REVIEW OF PORTFOLIO STRATEGISTS 

AND INVESTMENT MANAGEMENT FIRMS - Portfolio Strategists.” 

Mandates 

Additionally, for some, but not all, Mutual Fund and ETF Investment 

Solutions, the Client may select a Mandate for the Account. 

For some Mutual Fund Investment Solutions, the Client can select 

between the Tax-Sensitive or Standard Mandates described in Section 

A and/or select one of the investment styles, Domestic, Global or 

Hedged, described in Section B below. 

For some ETF Investment Solutions, the Client can choose between a 

Tax-Sensitive or Standard Mandate for the Account, as described below. 

There is no Mandate selection available for a Variable Annuity Investment 

Solution. 

Section A 

Tax-Sensitive. Tax-exempt fixed income investments, tax-managed 

equity investments, holding periods and turnover levels will be considered. 

However, GFWM cannot guarantee that the portfolios will 

behave in a tax sensitive manner over any given time period. 

Standard. Consideration will generally not be given to tax-exempt investments 

or holding periods. 

Section B 

Domestic. Strategy allocations are focused on U.S. asset classes. 

Global. Strategy allocations include a mix of U.S. and international asset 

classes. 

Hedged. Strategy allocations include a mix of U.S. and international 

asset classes. Implementation will include the use of specialty funds 

designed to have a low correlation to traditional asset classes such as 

stocks and bonds. 

PRIVATELY MANAGED ACCOUNT INVESTMENT SOLUTIONS 

A Privately Managed Account (“PMA”) Investment Solution can be 

established as 

• Individually Managed Account (“IMA”), 

• Manager Select Account (“MSA”), 



• GFAM Fixed Income Account, or a 

• Consolidated Managed Account (“CMA”). 

In the ETF Investment Solution, Strategic Asset Allocation, Tactical 

Constrained Asset Allocation, Tactical Unconstrained Asset Allocation 

and Absolute Return Allocation Approaches are available. 

R273-SchH-Ref (2010/04)

Individually Managed Account (“IMA”) 

For Clients selecting a Individually Managed Account Investment Solution, 

their Account will be managed by a “third-party” “Investment 

Management Firm” that is unaffiliated with GFWM, to act as “Investment 

Managers” for Client Accounts consistent with the Strategy selected 

by the Client. The Investment Manager shall provide discretionary 

investment management services to the Account, and the Client 

grants the Investment Manager the authority to buy and sell securities 

and investments for the Account, to vote proxies for securities held 

by the Account and such other discretionary authorities described in 

the IMSA. GFWM may replace the Investment Manager at its discretion. 

The Investment Manager of an IMA Investment Solution is also 

referred to as a “Discretionary Manager.” 

The standard minimum for each IMA Account is generally between 

$100,000 and $1,000,000. GFWM reserves the right, in its sole judgment, 

to accept certain investments below the standard minimum. 

With the exception of IMA Accounts managed by Rochdale Investment 

Management, LLC, there are no Asset Allocation Approaches 

or separate Risk/Return Profiles available for an IMA Account. IMA 

Accounts managed by Rochdale are available in the Tactical Unconstrained 

Asset Allocation Approach and the six Risk/Return Profiles, as 

described above under Risk/Return Profiles. 

Manager Select Account (“MSA”) 

For the MSA Investment Solution, GFWM has contracted with an 

“Overlay Manager” to act as the Investment Manager (or Discretionary 

Manager) for Client Accounts. The Overlay Manager shall provide 

discretionary investment management services to the Account, and 

the Client grants the Overlay Manager the authority to buy and sell 

securities and investments for the Account, to vote proxies for securities 

held by the Account and such other discretionary authorities 

described in the IMSA. GFWM has also contracted with an Investment 

Management Firm to provide recommendations for a specific 

asset class. The Overlay Manger shall generally invest the Account 

consistent with these recommendations unless circumstances indicate 

that modified allocations or investment are appropriate. GFWM 

may replace the Overlay Manager and Investment Manager Firm at 

its discretion. 

For an MSA Investment Solution, the Client, with the assistance of 

their Financial Advisor, shall select a Strategy, which shall be an asset 

class, represented by a single Investment Management Firm. 

The standard minimum for each MSA Account is generally $100,000. 

There are no Asset Allocation Approaches or separate Risk/Return 

Profiles available for an MSA Account. GFWM reserves the right, in 

its sole judgment, to accept certain investments below the standard 

minimum. 

GFAM Principal Return Exposure Strategy (“PRX”) 

For the PRX Investment Solution, the Genworth Financial Asset Management 

(“GFAM”) division of GFWM acts as the Investment Manager 

(or Discretionary Manager) for Client Accounts. GFAM shall provide 

discretionary investment management services to the Account, 

and the Client grants GFAM the authority to buy and sell securities 

and investments for the Account, to vote proxies for securities held 

by the Account (if applicable) and such other discretionary authorities 

described in the IMSA. 

In the PRX Investment Solution, the Client need make no further 

selections, with the assistance of their Financial Advisor, to specify the 

Strategy for the Account. The PRX Strategy follows an Absolute Return 

Allocation Approach and is considered to be Risk/Return Profile 2. 

R273-SchH-Ref (2010/04) 


Page 4 of 22 


The PRX Strategy. The PRX Strategy invests in equity-linked certificates 

of deposit (“CDs”) issued by banking institutions, on a buy and 

hold basis, with the dual investment objectives of return of principal 

at the end of a stated time-horizon, which is generally expected to be 

five years for each CD, and receipt of income at the maturity of each 

CD purchased for a Client Account, such income to be in the form 

of some limited participation in the price return of an Equity Benchmark, 

not including dividends. The Equity Benchmark associated with 

each CD is expected to be a weighted combination of one or more 

price indices on major equity markets, domestic and/or international. 

While fixed for the term of each CD, the Equity Benchmark may differ 

amongst CDs purchased by GFAM for PRX Strategy Accounts. 

Important Investment Considerations 

o Money Market Fund Risk – During the time between when a 

PRX Account is initially funded by the Client and the Account invests 

in one or more CDs, the Account will be invested in a money 

market mutual fund or other cash equivalent. Money market 

mutual funds carry the risk that they will experience a decline in 

value. 

o Suitability Risk – The PRX Strategy will invest in CDs with a maturity 

which is anticipated to be five years for each CD at the time 

of initial acquisition. Withdrawals from a PRX Account before the 

maturity of the CD(s) held in the Account, if possible, may result 

in loss of principal and the Client may not recover the total initial 

investment. The PRX Strategy is not suitable for Clients with an 

investment time horizon of less than five years. The client further 

acknowledges that their time horizon for the assets being 

invested in this advisory service is 5 years or greater regardless 

of what may be indicated as a time-horizon for their overall investment 

plan. 

o Liquidity Risk – No income will be paid by the Account CDs during 

their term. If the Client asks for a withdrawal from the Account 

prior to the next available maturity of a CD, and presuming 

insufficient cash is available in the Account, GFAM will attempt 

to sell all or part of one or more CD(s) held by the Account at 

the prevailing price. Sale of an Account CD prior to maturity and 

payment of the withdrawal request to the Client may not be possible 

due to possible lack of a buyer for any of the CDs held in 

the Account or may be at a price significantly different than the 

price reflected on your Account Statement. The price received 

for a CD sold prior to maturity may be influenced by many factors, 

such as the term structure of interest rates, currency exchange 

rates, the volatility of the Equity Benchmark, the price level of 

the Equity Benchmark, the prevailing dividend rate related to the 

Equity Benchmark, the creditworthiness of the counterparty and, 

most importantly, the availability of a buyer at the time the Client 

wishes to redeem all or part of the Account. Depending on 

the impact of these factors, if withdrawals from the Account are 

made prior to the maturity of Account CD(s), the Client may receive 

significantly less than expected. 

o Participation Rate – The Participation Rate is the rate in which 

a CD will participate in the price return of its Equity Benchmark. 

The Participation Rate will be determined at the time of issuance 

of the CD and is generally based on the term structure of interest 

rates, dividend rates and market volatility prevailing at the date of 

issue. GFAM does not currently plan to purchase CD(s) for PRX 

Strategy Accounts unless the Participation Rate is above 50% 

of the price return of the CD’s Equity Benchmark. The Account 

may invest in a CD with a lower Participation Rate than CD(s) purchased 

for other Accounts in the PRX Strategy at other points in 

time or previously purchased for the Client’s Account. Since the 

Participation Rate is a percentage of the price return of the Equity 

Benchmark, the Account will not fully participate in potential increases 

of the equity markets. 

o Interest Rate Risk – The overall return of the Account may be

less than interest earned by non-indexed debt securities or bank 

deposits that pay interest at a prevailing market rates. 

o Market Risk – If, for the term of a CD, the price return of the Equity 

Benchmark is zero or negative, you will not receive any supplemental 

payment amount at maturity, regardless of the Participation 

Rate. In addition, the Equity Benchmark for any given CD 

may be comprised of two or more equity indices which may not 

be equally weighted. Declines in the level or price of one index 

may offset increases in the level or price of the other index(es). 

o Tax Treatment – If in a taxable account, all principal return and 

Equity Benchmark participation is expected to be treated as “ordinary 

income” for U.S. federal income tax purposes classification. 

Additionally, as principal accretion occurs during the life of the Account, 

interest income may be imputed to the Client and reported 

to the Internal Revenue Service by the Account Custodian (Form 

1099 OID reported income). As such, the PRX Strategy may not 

be suitable for tax-sensitive clients. This information should not 

be interpreted as tax advice, as GFAM does not give tax advice. 

The Client should consult their tax advisor. 

o Counterparty Risk – The equity-linked CD is a bank product and 

may be covered by FDIC insurance, at the terms applicable at 

the time of any insolvency event and only up to a certain dollar 

amount. FDIC insurance levels may change during the time the 

Account holds CD(s). Other Client deposits at the same banking 

institution may be aggregated with the CD held by the Account 

for purposes of applying the FDIC insurance maximum coverage, 

and the Client may be exposed to counterparty risk of the issuing 

bank. It is the Client’s responsibility to monitor their exposure to 

the FDIC maximum at each banking institution. 

Important Operational Considerations 

o Participation Rate – GFAM does not currently intend to invest 

the Account in a CD with a Participation Rate of less than 50%. 

If a CD is not purchased for the Account despite the availability 

of funds to do so, the Account will remain invested in a money 

market mutual fund or other cash equivalent until such time as 

the market conditions allow for, and GFAM is able to purchase, 

a CD with greater than a 50% Participation Rate. Therefore, the 

Account may remain invested in a money market mutual fund or 

cash equivalent for long periods of time. During this period, Account 

Fees will be charged. 

o Timing of Account Funding – The transfer of assets from other 

financial institutions to the Account Custodian will take time. The 

Account will only be invested in a CD if at least 90% of the Initial 

Investment Amount and a minimum of $50,000 has funded the 

Account. Until then, the Account will remain invested in a money 

market mutual fund or other cash equivalent. Account Fees will 

be charged. 

o Value of Account Funding – The Account minimum for the 

PRX Strategy is $50,000. If the value of the Account falls below 

$50,000 before a CD has been purchased, the Account may not 

be invested in a CD. If the Account is not invested in a CD, it will 

remain invested in a money market mutual fund or other cash 

equivalent. Account Fees will be charged. 

The GFAM PRX Investment Solution will have an account minimum of 

$50,000 and an account maximum of $250,000. GFWM reserves the 

right, in its sole judgment, to accept certain investments below the 

standard minimum. 

GFAM Preservation Strategy 


Page 5 of 22 


For the GFAM Preservation Strategy Investment Solution, the GFAM 

division of GFWM acts as Investment Manager, also referred to as a 

Discretionary Manager, for Client Accounts. GFAM shall provide discretionary 

investment management services to the Account, and the 

Client grants GFAM the authority to buy and sell securities and investments 

for the Account, to vote proxies for securities held by the Account 

and such other discretionary authorities described in the IMSA. 

In the GFAM Preservation Strategy Investment Solution, the Client 

need make no further selections, with the assistance of their Financial 

Advisor, to specify the Strategy for the Account. The GFAM Preservation 

Strategy follows an Absolute Return Allocation Approach and is 

considered to be Risk/Return Profile 1. 

The primary investment objective of the Preservation Strategy is to 

avoid losses, measured over the calendar year. Intra-year volatility is 

not managed. The secondary objective is to maximize total return over 

the long term with no preference to income. The Account will be invested 

primarily in mutual funds. 

This strategy may invest in, among other things, “opportunistic” or 

“specialized” asset categories, which may include real estate, commodities, 

precious metals, energy and other less traditional asset 

classes, with no geographic restrictions, and the Genworth Financial 

Contra Fund, which is advised by GFWM. The Contra Fund seeks to 

provide protection against severe and sustained declines in the broad 

based equity markets, and it generally invests in options on stock indices. 

For GFAM Preservation Account, the account minimum is $50,000. 

GFWM reserves the right, in its sole judgment, to accept certain investments 

below the standard minimum. 

GFAM Fixed Income Accounts 

For the GFAM Fixed Income Accounts Investment Solution, the GFAM 

division of GFWM acts as Investment Manager, also referred to as a 

Discretionary Manager, for Client Accounts. GFAM shall provide discretionary 

investment management services to the Account, and the 

Client grants GFAM the authority to buy and sell securities and investments 

for the Account, to vote proxies for securities held by the Account 

and such other discretionary authorities described in the IMSA. 

For a GFAM Fixed Income Account Investment Solution, the Client, 

with the assistance of their Financial Advisor, shall select a Mandate 

for the management of their account. There are no Asset Allocation 

Approaches or separate Risk/Return Profiles available for a GFAM 

Fixed Income Account. 

The available Mandates for the GFAM Fixed Income accounts are as 

follows: 

• Laddered Bond Mandates - These Strategies invest the Account 

in either U.S. Treasury, U.S. Agency, or U.S. Treasury Inflation Protected 

bonds, with an intermediate effective duration, on a buy 

and hold basis. 

• Municipal, Duration-based and the High Yield Mandates - These 

Strategies invest the Account in closed-end funds, exchange traded 

funds or mutual funds to obtain relevant exposure specific to 

desired asset categories. 

For GFAM Fixed Income Accounts, the account minimum is $50,000. 

GFAM reserves the right, in its sole judgment, to accept certain investments 


Consolidated Managed Account (“CMA”) 

For Clients selecting a Consolidated Managed Account Investment 

Solution, GFWM has contracted with Parametric Portfolio Associates 

(“Parametric”) to act as overlay manager (“Overlay Manager”) 

R273-SchH-Ref (2010/04)

and provide limited discretionary investment management services 

to the Account and coordinate recommendations of individual securities 

and asset allocations. Parametric, as an Overlay Manger for CMA 

Accounts, is also referred to as a “Discretionary Manager.” As the 

CMA Overlay Manager, Parametric strives to provide the return of a 

combination of asset managers or styles while maintaining control 

over total portfolio risk and tax consequences. The role extends to 

total coordination and implementation of the Account – from initial 

trading to rebalancing, restrictions, cash flows, and, where relevant, 

the management of portfolio tax liabilities. 

The CMA asset allocations have been constructed by Portfolio Strategists, 

engaged by GFWM, using individual securities recommendations 

developed and maintained by a group of independent Investment 

Management Firms. The Overlay Manager has the limited discretionary 

authority to execute transactions in each CMA necessary to (i) 

track any reallocations or other adjustments to the CMA asset allocations 

constructed by the Portfolio Strategists, (ii) implement changes 

recommended by the Investment Management Firms; (iii) effect tax 

management transactions for any Account for which the Client has 

directed the Overlay Manager to provide tax management services 

(a “Tax-Sensitive Account”); and (iv) implement individual securities 

restrictions imposed on the Account by the Client. 

GFWM may remove, add or replace the Overlay Manager and any 

Investment Manager Firms in its discretion. 

The standard minimum CMA investment is $500,000. GFWM reserves 

the right, in its sole judgment, to accept certain investments 


For a CMA Investment Solution, the Client, with the assistance of the 

Client’s Financial Advisor, selects for the management of the Account 

(1) the Asset Allocation Approach (2) a Risk/Return Profile; (3) a Portfolio 

Strategist; and (4) a Mandate. 

Risk/Return Profile 

With the assistance of the Client’s Financial Advisor, the Client selects 

a Risk/Return Profile for the CMA Account. The six Risk/Return 

Profiles, ranging in objectives from most conservative to most aggressive, 

are described above under “RISK/RETURN PROFILES.” 

Asset Allocation Approach and Portfolio Strategists 

In a CMA Investment Solution, investment of the Account will be consistent 

with a Strategic Asset Allocation or Tactical Constrained Asset 

Allocation Approach, as selected by the Client. 

For the CMA Investment Solution, GFWM has contracted with Portfolio 

Strategists, which GFWM may replace in its discretion, to provide 

asset allocations, consistent with the Asset Allocation Approach and 

Risk/Return Profile, by which the Overlay Manager intends to invest 

the Account, unless circumstances indicate that modified allocations 

or investments are appropriate. The Client may specify the initial Portfolio 

Strategist for the Account and will be given notice of any change 

to that Portfolio Strategist. GFWM may remove, replace or add to the 

Portfolio Strategists on your Account in its discretion. 

Mandates 

With the assistance of the Financial Advisor, the Client may choose 

between Tax-Sensitive or Standard Account as described in Section 

A, and then further refine the Account’s Mandate by selecting one of 

the investment styles, Hedged or Core-Satellite, described in Section 

B below. 


Page 6 of 22 


Section A 

Tax-Sensitive. Tax-exempt fixed income investments, tax-managed 

equity investments, holding periods and turnover levels will be considered. 

However, GFWM cannot guarantee that the portfolios will 

behave in a tax sensitive manner over any given time period. 

Standard. Consideration will generally not be given to tax-exempt investments 

or holding periods. 

Section B 

Hedged. Strategy allocations include a mix of U.S. and international 

asset classes. Implementation will include the use of specialty funds 

designed to have a low correlation to traditional asset classes such as 

stocks and bonds. 

Core-Satellite. Strategy allocations include a mix of U.S. and international 

asset classes. The U.S. Large Cap equity allocation will be 

focused on a broad domestic index objective and will be directly managed 

by Parametric. 

UNIFIED MANAGED ACCOUNT (“UMA”) INVESTMENT 

SOLUTIONS 

The Unified Managed Account Investment Solutions include Genworth 

Multiple Strategies (“GMS”), Active Return Opportunities (“ARO”) 

and Privately Managed Portfolios (“PMP”) accounts. GFWM manages 

UMA Accounts through its Genworth Financial Asset Management 

(“GFAM”) division; therefore, when discussing UMA Investment Solutions, 

reference will be made to GFAM. For the UMA Investment Solutions, 

GFAM serves as “Overlay Manager” and may also be referred 

to as “Discretionary Manager.” 

GFAM acts as Overlay Manager for the UMA Investment Solutions 

providing discretionary investment management services and coordinating 

recommendations of independent Investment Management 

Firms acting as portfolio advisers to GFWM. As Overlay Manager for 

UMAs, GFAM may also select securities directly for Client Accounts. 

GFAM, as Overlay Manager for UMA Accounts, is also referred to as a 

“Discretionary Manager.” 

The standard minimum UMA investment, depending on the strategy 

selected, is between $50,000 and $500,000. GFWM reserves the 

right, in its sole judgment, to accept certain investments below these 

standard minimums. 

Investments for UMA Investment Solutions will be made by GFAM 

using securities recommendations by independent Investment Management 

Firms. In addition, UMA Accounts may hold investments 

selected by GFAM, and these investments may include, but are not 

limited to, some or all of the following types of securities: exchange 

traded funds, closed-end funds, open-end funds, preferred stocks, 

treasury bonds, bills, notes and bank notes. The mutual fund investment 

may include the Genworth Financial Contra Fund, which is advised 

by GFWM. The Contra Fund seeks to provide protection against 

declines in the broad based equity markets, and it generally invests in 

options on stock indices. The asset allocation decisions, Investment 

Management Firm selection decisions and additional security selection 

decisions will all be made solely by GFAM in its discretion based 

on the Strategies selected by the Client. This discretion may include 

the substitution of certain securities included in selected Investment 

Management Firms’ asset allocations in consultation with the Investment 

Management Firm or otherwise, or the selection of individual 

securities in certain designated asset classes. 

For UMA Investment Solutions, GFAM employs comprehensive analysis, 

including specific mathematical, technical and/or fundamental 

R273-SchH-Ref (2010/04)

tools and risk-control criteria in the management of Client Accounts. 

The focus of GFAM as Overlay Manager is to add value to each Client’s 

account through four key avenues: (1) the strategic and tactical 

determination of asset allocation levels; (2) the selection of independent 

Investment Management Firms to advise as to the formation of 

concentrated portfolios of their highest conviction individual security 

preferences; (3) the formation of portfolios with risk management options 

to match the portfolio to the Client’s chosen level of risk tolerance; 

and (4) efficient execution of trade orders resulting from ongoing 

management of the Client’s Account. 

Clients in UMA Investment Solutions have the option to place restrictions 

against investments in specific securities or types of securities 

for their account that are reasonable in light of the advisory services 

being provided under the different Investment Solutions offered on 

the Platform. Requests for such restrictions are reviewed by GFWM 

to ensure that they are reasonable and will not unduly impair GFWM’s 

ability to pursue the Investment Solution and Strategy selected by 

the Client. As may be limited by the Custodian’s policies and procedures, 

Clients may also pledge the securities in their UMA Account 

or withdraw securities from their Account (transfer in-kind to another 

account or custodian), but must do so by giving instructions in writing 

to GFWM or Custodian. 

For GMS and PMP, a risk management strategy may be implemented 

through the use of GFAM’s Actively Managed Protection Service 

(“AMP”), fixed income, other strategies, or a combination of all these 

strategies. Portfolio allocations for these risk management strategies 

will vary based on individual Client objectives within target allocations 

established and monitored by GFAM. 

Genworth Multiple Strategies (“GMS”) Accounts 

GMS Investment Solutions are designed for Clients who have Accounts 

of at least $50,000 and desire the advantages of a separate 

account. These portfolios are offered in three equity Mandates, and in 

four of the six Risk/Return Profiles, which are selected by the Client 

with the assistance of the Client’s Financial Advisor. 

Clients who select the GMS Account as their Investment Solution 

must deposit at least $50,000 into their account, and if multiple deposits 

are made into such an Account, the Account will not be invested 

and will not be considered a Discretionary Account until the Account 

balance reaches the required minimum $50,000. A Client’s Account 

will be held by Custodian in cash or in any assets transferred in-kind 

until such time as the value of the deposits to the account reaches 

the required $50,000 minimum for investment. GFAM reserves the 

right, in its sole judgment, to accept certain investments below the 

standard minimum. 

In a GMS Investment Solution, the Client authorizes GFAM to provide 

discretionary investment management services to the Account. 

The Client grants GFAM the authority to buy and sell securities and 

investments for the Account, to vote proxies for securities held by 

the Account and the other discretionary authorities described above 

under “GFWM’s Investment Management Services Agreement” and 

in the IMSA itself. GFAM may select securities for the Account, to 

a substantial degree, consistent with recommendations provided to 

GFAM by Investment Management Firms that GFWM selects, retains 

and may replace. GFAM retains the right, however, to allocate across 

asset classes, which will include such recommended securities, in its 

own discretion. GFAM may invest the Account in direct securities, 

pooled investment vehicles, such as mutual funds or ETFs, or in other 

securities or investments. 


Page 7 of 22 


GFAM will generally not adjust the holdings in a GMS Account on an 

ongoing basis. Instead, unless a security exceeds a threshold decline 

determined by GFAM in its sole discretion, GFAM will generally only 

sell or readjust Account holdings after a one-year holding period. However, 

since the one-year holding period is generally measured from 

the date of the previous year’s readjustment (and this date may shift 

forward throughout the calendar year over time), Clients may not experience 

a one-year holding period on their Account assets in the first 

and last year of an Account or if withdrawals or contributions are made 

to the Account. If the “Opportunistic” Mandate is chosen, some degree 

of turnover greater than that seen in other GMS Mandates may 

occur as GFAM adjusts the Opportunistic exposure both to enhance 

return and manage risk. However, because of its annual adjustment 

structure, a GMS Account is less able than a non-GMS Account to 

react to market events or opportunities and make changes between 

adjustment dates. 

Additionally, Clients should be aware that a reasonable amount of time 

will be needed to purchase, redeem and/or transfer assets during the 

annual adjustment period, and GFWM will not be held liable for losses 

due to market value fluctuations during the time taken for these transactions. 

The GMS Investment Solution follows the Tactical Constrained Asset 

Allocation Approach. For a GMS Investment Solution, the Client, with 

the assistance of the Client’s Financial Advisor, selects for the management 

of the Account (1) a Risk/Return Profile; (2) the type of risk 

management strategy; and (3) a Mandate. 



for a GMS Account a Risk/Return Profile. The Risk/Return Profiles, 

ranging in objectives from most conservative to most aggressive, are 

described above under “RISK/RETURN PROFILES.” Only profiles numbered 

three (3) through six (6), that is Moderate, Moderate Growth, 

Growth, and Maximum Growth, are available for a GMS Account. 

Risk Management Strategy 

When selecting a Risk/Return Profile for a GMS Account, the Client, 

with the assistance of the Client’s Financial Advisor, also specifies 

whether the risk management strategy should be implemented 

through use of fixed income strategies or through use of GFWM’s Actively 

Managed Protection Service, described below under “GFWM’S 

ACTIVELY MANAGED PROTECTION (“AMP”) SERVICE.” 

Mandates 

The Client may choose between the following Mandates for a GMS 

Account. 

High Dividend. The Account will primarily be exposed to large capitalized 

U.S. companies, with possible significant allocations of exposure 

to real estate and high dividend paying stocks. 

Global – The Account will be exposed to international securities (including 

emerging markets), with allocations that also include exposure 

to large and small capitalization U.S. companies. 

Opportunistic.* The Account will primarily be exposed to stocks of 

companies domiciled in the U.S. and other developed countries, with 

allocations that also include exposure to real estate and high dividend 

paying stocks. The Account may also invest in one or more specialized 

asset categories, including, but not limited to, commodities, market 

neutral strategies, emerging markets, international small capitalized 


R273-SchH-Ref (2010/04)

Active Return Opportunities (“ARO”) Accounts 

In an ARO Investment Solution, the Client authorizes GFAM to provide 

discretionary investment management services to the Account. 

The Client grants GFAM the authority to buy and sell securities and 

investments for the Account, to vote proxies for securities held by 

the Account and such other discretionary authorities described earlier 

in this Agreement. GFAM may select securities for the Account, 

to a substantial degree, consistent with recommendations provided 

by Investment Management Firms that GFWM selects, retains and 

may replace. GFAM may invest the Account in direct securities, 

pooled investment vehicles, such as open end mutual funds, closed 

end investment companies, including ETFs, or in other securities or 

investments. GFAM retains the right, however, to allocate across asset 

classes, which will include such recommended securities, in its 

own discretion. GFAM will generally adjust the holdings in an ARO 

Account on an ongoing basis. 

GFAM’s management of taxable Accounts in the ARO Investment Solution 

will include a “loss-harvesting strategy.” The objective of the loss 

harvesting strategy is to actively realize capital value losses, as they 

occur over time, that exceed certain pre-determined and meaningful 

levels. GFAM will determine, in its sole discretion, what investments 

to sell, or not, in implementing this strategy. This loss-harvesting strategy 

will only be applied with regard to individual stocks, closed-end 

funds, ETFs and their equivalents; GFAM does not plan to apply it to 

mutual fund holdings. GFAM’s management of non-taxable or taxdeferred 

accounts in the ARO Investment Solution will not include a 

loss-harvesting strategy. This loss harvesting strategy is not applied in 

any other UMA Investment Solution. 

Clients should be aware that a reasonable amount of time will be 

needed to purchase, redeem and/or transfer assets, and GFWM will 

not be held liable for losses due to market value fluctuations during 

the time taken for these transactions. GFAM does not represent or 

guarantee that all applicable capital losses will be harvested, that the 

losses will all be long-term or short-term, or that the losses will be 

harvested intentionally against known realized capital gains in a Client’s 

account. 

The ARO Investment Solutions follows the Tactical Unconstrained Asset 

Allocation Approach. For the ARO Investment Solution, the Client, 

with the assistance of the Client’s Financial Advisor, selects for the 

management of the ARO Account (1) a Risk/Return Profile; (2) an Account 

Minimum; and (3) a Mandate. 


When establishing an ARO account, the Client, with the help of the 

Financial Advisor, will select a Risk/Return Profile that GFAM will use 

to implement a risk management strategy in the Client’s Account. The 

six Risk/Return Profiles, ranging in objectives from most conservative 

to most aggressive, are described above under “RISK/RETURN 

PROFILES.” In implementing a risk management strategy in an ARO 

Account, GFAM will, in its discretion, utilize a variety of risk management 

tools. These tools will generally include investments intended 

to act in a manner that is non-correlated or, in some cases, inversely 

correlated to the equity preference selected by the Client. ARO risk 

management tools may include investments in fixed income securities, 

but may also include other asset classes such as vehicles investing 

in commodities, real estate, or other investments that GFAM, in 

its discretion, deems appropriate to mitigate risk. Additionally, GFAM 

may use the Genworth Financial Contra Fund, which is described in 

more detail in the Prospectus for the Contra Fund. The Genworth Financial 

Contra Fund is a proprietary registered investment company 

for which GFWM, through its GFAM division, serves as investment 


Page 8 of 22 


adviser. GFAM will determine when to use each risk management 

tool, and in what proportion, based on its evaluation of current market 

conditions. 

Account Minimums 

ARO Accounts are available in the following Account Minimums: 

$50,000 (ARO-50), $100,000 (ARO-100), $250,000 (ARO-250) and 

$500,000 (ARO-500). The Account Minimum selected by the Client 

will influence the type of investment that GFAM will use for the Client 

Account. Generally, Accounts with larger Account Minimums will invest 

in individual securities more than Accounts with smaller Account 

Minimums, which will invest more in pooled investment vehicles. 

Therefore, Clients who select ARO-50 may have a greater portion of 

their Accounts invested in mutual funds, closed-end funds, and ETFs 

than will Clients who select ARO-500, while Clients selecting ARO-500 

may see a greater portion of their Accounts invested in individual securities. 

However, under certain market conditions, particularly those 

requiring a defensive posture against anticipated equity market downturns, 

the use of pooled investment vehicles may be more proportionately 

consistent across the different Account Minimums than under 

other market conditions. 

Once an Account Minimum is selected, the Account will remain invested 

in investments typically selected by GFAM for Clients selecting 

that Account Minimum, even if Account value is more than the next 

Account Minimum, unless a written request is received to change the 

Account’s selected Account Minimum. 

Clients who select the ARO Account must deposit at least the required 

minimum specified into their Account, and if multiple deposits 

are made into such an Account, the Account will not be invested until 

the Account balance reaches the required Account Minimum. A Client’s 

Account will be held by the Custodian in cash or in any assets 

transferred in-kind until such time as the value of the deposits to the 

Account reaches the required minimum for investment, and the Account 

will not be considered a discretionary Account until such time 

as the Account assets reach the required minimum. GFAM reserves 

the right, in its sole judgment, to accept certain investments below 

the standard minimum. 

Mandates 

The Client may choose between the following Mandates for an ARO 

Account. All of these Mandates allow for the Account to invest in “opportunistic” 

or “specialized” asset categories, which may include, 

among other things, real estate, commodities, precious metals, energy 

and other less traditional asset classes, with no geographic restrictions, 

and the Genworth Financial Contra Fund. The Contra Fund, 

which is advised by GFWM, seeks to provide protection against severe 

and sustained declines in the broad based equity markets, and 

it generally invests in options on stock indices. In addition, all of the 

Mandates allow for the Account to be traded more “opportunistically,” 

which may lead to higher turnover and more frequently realized gains 

and losses than experienced in other UMA Investment Solutions. 

Domestic. Domestic Accounts are managed to an investment objective 

that allows exposure to domestic asset categories. However, 

this geographic restriction does not apply to real estate, commodities, 

precious metals, energy, and ultra high quality large cap growth, 

which may potentially provide domestic, international, or global exposure. 

This investment objective also allows exposure to equities, 

fixed-income, and specialized asset categories. For the purposes of 

this investment objective, specialized asset categories are defined to 

include real estate, commodities, precious metals, energy, and other 

less traditional asset class exposures. The selection of asset class 

R273-SchH-Ref (2010/04)

exposures and the percentage allocations to each is made with the 

objective of bringing the account’s aggregate characteristics into approximate 

alignment with the current and prospective investment and 

economic environments. There is no minimum percentage allocation 

to any asset class exposure. This investment objective focuses exclusively 

on total return and gives absolutely no preference to income 

generation. 

Global. Global Accounts are managed to an investment objective that 

allows exposure to both domestic and international asset categories. 

This investment objective also allows exposure to equities, fixedincome, 

and specialized asset categories. For the purposes of this 

investment objective, specialized asset categories are defined to include 

real estate, commodities, precious metals, energy, and other 

less traditional asset class exposures. The selection of asset class 

exposures and the percentage allocations to each is made with the 

objective of bringing the account’s aggregate characteristics into approximate 

alignment with the current and prospective investment and 

economic environments. There is no minimum percentage allocation 

to any asset class exposure. This investment objective focuses exclusively 

on total return and gives absolutely no preference to income 

generation. 

High Current Income. High Current Income Accounts are managed to 

an investment objective that allows exposure to both domestic and 

international asset categories that have a natural propensity to deliver 

a significantly above average portion of their total return in the form 

of current income instead of capital appreciation. Current income is 

defined as dividends, interest income, and option premiums. This investment 

objective also allows exposure to equities, fixed-income, 

and specialized asset categories. For the purposes of this investment 

objective, specialized asset categories are defined to include real estate, 

commodities, precious metals, energy, and other less traditional 

asset class exposures. The selection of asset class exposures and the 

percentage allocations to each is made with the objective of bringing 

the account’s aggregate characteristics into approximate alignment 

with the current and prospective investment and economic environments. 

There is no minimum percentage allocation to any asset class 

exposure. 

Privately Managed Portfolios (“PMP”) Accounts 

In a PMP Investment Solution, the Client authorizes GFAM to provide 

discretionary investment management services to the Account. PMP 

Investment Solutions are designed for Clients who have Accounts of 

at least $250,000 and desire the advantages of a separate account. 

These portfolios are offered in a variety of equity Mandates, Risk/Return 

Profiles and risk management strategies, which are selected by 

the Client with the assistance of the Client’s Financial Advisor. 

A Client who selects the PMP Investment Solution must deposit at 

least $250,000 into the Client’s Account, and if multiple deposits are 

made into such an Account, the Account will not be invested until the 

Account balance reaches the required minimum $250,000. A Client’s 

Account will be held by the Custodian in cash or in assets transferred 

in-kind until such time as the value of the deposits to the Account 

reaches the required $250,000 minimum for investment. GFAM reserves 

the right, in its sole judgment, to accept certain investments 


GFAM may select securities for the Account, to a substantial degree, 

consistent with recommendations provided by Investment Management 

Firms that GFWM selects, retains and may replace. GFAM may 

select for the Account in individual securities, pooled investment vehicles, 

such as open end mutual funds or ETFs, or other securities or 

investments. GFAM retains the authority, however, to allocate across 


Page 9 of 22 


asset classes, which may include such recommended securities, in 

its own discretion. GFAM will generally adjust the holdings in a PMP 

Account on an ongoing basis. 

Clients should be aware that a reasonable amount of time will be 

needed to purchase, redeem and/or transfer assets, and GFWM will 

not be held liable for losses due to market value fluctuations during 

the time taken for these transactions. 

The PMP Investment Solution follows the Tactical Constrained Asset 

Allocation Approach. 

For a PMP Investment Solution, the Client, with the assistance of the 

Client’s Financial Advisor, selects for the management of the PMP 

Account (1) a Risk/Return Profile; (2) the type of risk management 

strategy; and (3) a Mandate. 



for a PMP Account a Risk/Return Profile, as described under “RISK/ 

RETURN PROFILES.” Only profiles numbered three (3) through six (6), 

that is Moderate, Moderate Growth, Growth, and Maximum Growth, 

are available for a PMP Account. 

Risk Management Strategy 

When selecting a Risk/Return Profile for a PMP Account, the Client, 

with the assistance of the Client’s Financial Advisor, also specifies 

whether the risk management strategy should be implemented 

through use of fixed income strategies or through use of GFWM’s 

Actively Managed Protection (AMP) Service, described below under 

“GFWM’S ACTIVELY MANAGED PROTECTION (“AMP”) SERVICE.” 

Mandates 

The Client may choose between the following Mandates for a PMP 

Account. 

Diversified U.S. The Account will primarily be exposed to large, mid 

and small capitalized companies domiciled in the United States. 

Diversified Global. The Account will primarily be exposed to large, mid 

and small capitalized companies domiciled in the United States and 

other developed countries, with possible significant allocations of exposure 

to real estate and high dividend paying stocks. 

High Dividend Global.* The Account will primarily be exposed to large, 

mid and small capitalized companies domiciled in the United States 

and other developed countries, with possible significant allocations of 

exposure to real estate and high dividend paying stocks. The Account 

may also invest, at a conservative level, in one or more specialized 

asset categories, including, but not limited to, commodities, market 

neutral strategies, emerging markets, international small-capitalized 


Blended Opportunistic.* The Account will primarily be exposed to 

large, mid and small capitalized companies domiciled in the United 

States and other developed countries, with possible allocations of exposure 

to U.S. companies operating in the real estate industry and 

stocks that currently pay high dividend. The Account may also invest, 

at a moderate level, in one or more specialized asset categories, including, 

but not limited to, commodities, market neutral strategies, 

emerging markets, international small-capitalized companies and 

global bonds. 

R273-SchH-Ref (2010/04)

High Dividend Opportunistic.* The Account will primarily be exposed 

to large capitalized companies domiciled in the United States paying 

high current dividends. The Account may also invest, at a moderate 

level, in one or more specialized asset categories, including, but not 

limited to, commodities, market neutral strategies, emerging markets, 

international small-capitalized companies and global bonds. 

Diversified Opportunistic.* The Account will primarily be exposed to 

large, mid and small capitalized companies domiciled in the United 

States and other developed countries, with possible allocations of exposure 

to U.S. companies operating in the real estate industry and 

stocks that currently pay high dividend. The Account may also invest, 

at a moderate level, in one or more specialized asset categories, including, 

but not limited to, commodities, market neutral strategies, 

emerging markets, international small-capitalized companies and 

global bonds. 

*These asset category investments may include exposure to the Genworth 

Financial Contra Fund, which is described in further detail in 

the Prospectus of the Contra Fund. The Contra Fund seeks to provide 

protection against severe and sustained declines in the broad based 

equity markets, and it generally invests in options on stock indices. 

Solutions No Longer Offered – GFAM manages other investment solutions 

which are no longer offered to new clients. These solutions 

continue to be managed in accordance with the respective client 

agreement. 

SELECTION AND REVIEW OF PORTFOLIO STRATEGISTS AND 

INVESTMENT MANAGEMENT FIRMS 


The Portfolio Strategists used in Mutual Fund, ETF, Variable Annuity 

and CMA Investment Solutions are selected by GFWM in order to provide 

a wide range of investment options and philosophies to Clients. 

In constructing their asset allocations, each of the Portfolio Strategists 

will generally utilize the Asset Allocation Approaches described earlier 

in this Disclosure Brochure. Each of the Portfolio Strategists provides 

to GFWM a range of asset allocations that will correspond to some 

or all of the six Risk/Return Profiles, ranging from most conservative 

to most aggressive, as discussed above under “RISK/RETURN PRO- 

FILES.” 

The Portfolio Strategists generally use either technical or fundamental 

analysis techniques in formulating their asset allocations and some 

will incorporate strategies with specific income distribution objectives. 

Each of the Portfolio Strategists nevertheless has its own investment 

style resulting in the use of different asset class and mutual fund, ETF, 

variable annuity sub-accounts, or CMA Investment Management Firm 

allocations within their asset allocations. The asset allocations will be 

comprised of a combination of asset classes, represented by mutual 

funds, ETFs, variable annuity sub accounts or, in the case of the CMA 

Investment Solution, individual securities. These asset classes may 

include, but are not limited to the following: 

• US equities – Large Cap Growth, Large Cap Value, Mid Cap 

Growth, Mid Cap Value, Small Cap Growth, Small Cap Value 

• International equities – Developed Markets, Emerging Markets 

• Fixed Income – US Core, High Yield, Global, International, Emerging 

Markets 

• Other – REITs, Commodities, Absolute Return Strategies, hedging 

strategies and other non-standard sectors 

• Cash 


Page 10 of 22 


The objective is to provide Clients with a variety of asset allocation 

methods for accomplishing the Client’s investment objectives. The 

Clients and the Financial Advisors should review each Portfolio Strategist’s 

investment style prior to selecting the Portfolio Strategist and 

Asset Allocation Approaches to follow for each Client Account under 

the Platform. 

These asset allocation recommendations are implemented by GFWM 

in Client Accounts at the frequency at which they are received from 

the Portfolio Strategists and will result in transactions in the impacted 

Accounts. Portfolio Strategists will guide GFWM with instructions 

to rebalance portfolios (return back to policy mix) and/or reallocate 

(change the target mix), either periodically or as they deem appropriate 

over time, depending on their specific asset allocation approach 

and investment process. 

GFWM may from time to time add, remove or replace a Portfolio Strategist. 

GFWM may periodically add mutual funds, ETFs and CMA Investment 

Management Firms to those available for use in the Portfolio 

Strategists’ asset allocations, and GFWM may periodically remove 

mutual funds, ETFs and CMA investment management firms from the 

list of those available. Variable annuity sub-accounts available to the 

Portfolio Strategists will depend upon the individual variable annuity 

issuer selected by the Client and will be more fully described in the 

Prospectus delivered to the Client by the variable annuity issuer. 

Although some of the Portfolio Strategists creating asset allocations 

composed of mutual funds consider all of the mutual funds available 

under the Platform, certain Portfolio Strategists compose their mutual 

fund asset allocations utilizing only those mutual funds managed 

by the Portfolio Strategist or an affiliate of the Portfolio Strategist. In 

addition, one or more of the Portfolio Strategists will construct their 

asset allocations exclusively using AssetMark Funds. The AssetMark 

Funds are a series of no-load mutual funds advised by GFWM and subadvised 

by a group of unaffiliated institutional investment managers. 

A Prospectus for the AssetMark Funds may be obtained upon request 

from GFWM or the Financial Advisor. 

GFWM makes available to the Financial Advisor and Client written descriptions 

of each of the Portfolio Strategists, including a brief history 

of each firm and an overview of the Portfolio Strategists’ key investment 

management personnel. 

PMA and UMA Investment Management Firms 

GFWM uses independent investment management firms (referred to 

as “Investment Managers” or “Discretionary Managers”) in the PMA 

Investment Solutions, and in the MSA and CMA Investment Solutions 

this Discretionary Manager is also referred to as an Overlay Manager. 

These Discretionary Managers manage individual Client Accounts on 

a discretionary basis consistent with the Strategy selected by the Client. 

For CMA and UMA Investment Solutions (including PMP, GMS and 

ARO Accounts), GFWM also selects and retains independent investment 

management firms (referred to in the discussions of those Investment 

Solutions as the “Investment Management Firms”), in an 

advisory or consulting capacity, to select and recommend to GFAM 

individual securities in a specific asset class according to a predetermined 

mandate and to provide GFAM with model portfolios of securities. 

In IMA Accounts and GFAM Investment Solutions (GFAM PRX, GFAM 

Preservation Strategy and GFAM Fixed Income Accounts), the Discretionary 

Managers have full discretionary authority to invest the assets 

in Client Accounts. In MSA and CMA Accounts, the Overlay Manager 

R273-SchH-Ref (2010/04)

has limited discretionary authority to implement the securities selected 

by the Investment Management Firms. In UMA Accounts, GFAM 

has full discretionary authority to implement the Investment Management 

Firm selections, and generally invests Client assets, to a substantial 

degree, in accordance with these model portfolios, consistent 

with the allocation appropriate to each Client’s Account. For certain 

asset classes in UMA Strategies, GFAM does not utilize the services 

of an independent Investment Management Firm, and instead selects 

the portfolio of securities for that asset class itself. 

The independent investment management firms acting as “Investment 

Managers” or “Discretionary Managers” in their discretionary 

management capacity, and acting as the “Investment Management 

Firms” in their advisory capacity, depending on the Investment Solution 

in question, are all referred to below as “Investment Management 

Firms” in the discussion of their selection and oversight, for the sake 

of clarity. 

Selection of Investment Management Firms. In selecting the Investment 

Management Firms, GFWM evaluates investment firms based 

upon investment style, consistency, and performance relative to peer 

groups and appropriate benchmarks. Key elements in this evaluation 

process include an analysis of investment philosophy and process 

rigor, competitive advantage, organizational stability, historical results, 

and mandate compatibility. 

Investment Management Firm Oversight and Replacement. GFWM 

generally employs both proactive and reactive systems in its ongoing 

oversight of the Investment Management Firms. The proactive 

system involves review of three sets of criteria for each Investment 

Management Firm. GFWM undertakes holdings analyses for each Investment 

Management Firm that examines sector exposure versus 

an appropriate benchmark and the Investment Management Firm’s 

total return versus an appropriate benchmark. GFWM also evaluates 

the consistency of the Investment Management Firm’s investment 

style using a variety of analytical tools. Finally, GFWM engages in an 

ongoing review of Investment Management Firms’ personnel, investment 

mandates and ownership. 

The reactive system involves periodic submission of Investment Management 

Firm performance data to a set of statistical procedures designed 

to identify Investment Management Firms whose performance 

falls outside of tolerance levels. 

In the performance of both its proactive and reactive oversight review 

of the Investment Management Firms, GFWM may use the services 

of external investment management consulting firms (“Consultants”). 

These Consultants are used to help collect and review both quantitative 

and qualitative information, not only with regard to the Investment 

Management Firms currently under contract with GFWM or with its 

proprietary mutual funds, but also those prospective Investment Management 

Firms that might be of use in developing investment recommendations 

for the Platform, either to replace or to supplement 

existing Investment Management Firms. 

Based on the results of both the proactive and reactive oversight systems, 

GFWM’s procedures generally involve a three stage process 

for addressing concerns regarding specific Investment Management 

Firms. Stage one includes an internal discussion within GFWM regarding 

the results of the proactive and reactive system tests, and 

continued monitoring of the Investment Management Firm in question. 

If an issue remains unresolved, then the process proceeds to 

stage two, where additional attribution analysis is performed, and the 

issue is discussed directly with the Investment Management Firm. 

If, after additional monitoring, the issue remains unresolved, then the 

process of replacing the Investment Management Firm is initiated. 

This process may take 30 days or more to complete. 

R273-SchH-Ref (2010/04) 


Page 11 of 22 


GFWM’S ACTIVELY MANAGED PROTECTION (“AMP”) SERVICE 

Overview 

GFAM’s Actively Managed Protection (“AMP”) service is offered by 

GFWM within certain Investment Solutions managed by its GFAM 

division. The goal of the AMP service is to allow Client Accounts to 

participate in the growth of equity markets while also providing risk 

management protection during periods of equity market decline. For 

Clients choosing a GMS or PMP Investment Solution, the AMP service 

is one of the two risk management service elections available, 

the other being fixed income investments. 

AMP Investment Objective 

The investment objective of the AMP service is to help mitigate losses 

in Client Accounts during a calendar year resulting from a sustained 

and severe decline in the broad-based equity markets. During periods 

of rising equity markets, the goal of the AMP service is to allow Client 

Accounts to participate in some portion of that market rise, net 

of the cost of the risk management protection provided by the AMP 

service. 

AMP Investment Strategy 

The AMP service provides its risk management protection by investing 

in any of a number of hedging and other protective investment 

vehicles. At the current time, the AMP service invests primarily in the 

Genworth Financial Contra Fund and in cash equivalents. The Contra 

Fund is a proprietary registered investment company for which 

GFWM, through its GFAM division, serves as investment adviser. The 

Contra Fund primarily invests in derivative instruments, most notably 

equity index put options. The Contra Fund may hold both put and call 

equity index options, and may also invest in cash and other forms of 

derivatives such as equity index futures contracts. 

In GMS and PMP Investment Solutions, the AMP service will be the 

primary source of risk management protection for those Clients who 

have made the election to use AMP for their Accounts. 

Risks of the AMP service 

No Guarantee Expressed or Implied 

The phrase “risk management protection” or simply “protection” 

should in no way be regarded as a guarantee against losses or even 

the mitigation of losses. Similarly, the word “participation” should in 

no way imply positive gains in a Client Account during periods of rising 

equity markets. GFAM may or may not be successful in achieving 

the investment objective of the AMP service in any individual calendar 

year. The primary goal of the AMP service is some degree of mitigation 

of losses during falling equity markets (and participation in gains 

during rising markets), but this is not a guarantee. 

Correlation Risk 

The value of the holdings of the AMP service is intended to rise as the 

broad-based equity market declines. GFAM generally uses the S&P 

500 as a benchmark for the AMP service in determining whether it is 

performing as intended. GFAM may, from time to time and as market 

conditions shift, adjust the benchmark for AMP, in order to target the 

AMP service more closely to the assets generally held in Client Accounts. 

GFAM may adjust the AMP benchmark by incorporating other 

market indices, such as those of smaller capitalization companies and/ 

or of global equity markets. However, not all Client Accounts may 

perform similarly to GFAM’s AMP benchmark. To the extent that the 

assets and performance of Client Accounts differ from GFAM’s AMP

enchmark, Client Accounts may not receive the same degree of risk 

management protection from the AMP service when the AMP benchmark 

declines. 

Performance Measurement of the AMP Service 

The goal of the AMP service is to mitigate the declines in a Client’s 

Account during downturns in the AMP equity benchmark. However, 

consistent with the objective of the AMP service to provide risk management 

protection only against “severe and sustained” declines in 

the equity markets, GFWM measures the performance and success 

of the AMP service on a calendar year basis. The AMP service should 

not be expected to mitigate losses occurring over short periods of 

time, nor should the AMP service be expected to mitigate losses occurring 

from market declines that are relatively small or minor. 

Risk/Return “Drift” in the AMP Service and the Postponement 

Option 

GFAM will periodically review and may subsequently adjust the level 

of exposure to the AMP service in Client Accounts. These reviews 

may be conducted as a result of known changes in the underlying 

concentration of the Contra Fund, or they may be performed simply as 

part of a risk management review of Client Accounts. 

Between the times that the level of exposure to the AMP service 

is adjusted, and usually as the result of a significant equity market 

movement, the risk/return characteristics of the AMP service may drift 

substantially from the characteristics the AMP service had at the time 

it was most recently reset. This is particularly true for the GMS and 

PMP Investment Solutions. 

Clients should be aware that opening an Account in a GMS or PMP 

Investment Solution between the times that the AMP service is reset 

could result in a risk profile significantly different from the risk profile 

of that Account at the time of reset. For example, if the equity market 

declines substantially from the time the AMP service was last reset for 

Accounts in a GMS or PMP Investment Solution, an Account opened 

at that point in time may experience significantly reduced participation 

in any subsequent market rise between the time the Account was 

opened and the time of the next AMP service is reset. Similarly, if the 

equity market has risen significantly since the time of the last AMP 

service reset, an Account opened at that point in time may experience 

significantly reduced protection against any further market declines 

until the next AMP reset. 

Clients opening a new Account in a GMS or PMP Investment Solution 

that have selected the AMP service as their risk management protection 

strategy may elect to postpone the investment of their assets 

until the next periodic reset of the AMP service. Any cash deposits 

received will be invested in cash equivalents until the subsequent 

AMP reset, and any securities received in-kind will be held until the 

subsequent reset as well. This “postponement option” is available 

only for new Client Accounts in the GMS or PMP Investment Solutions 

and is not available for subsequent contributions or additions 

to such Accounts. Account Fees will be charged while application of 

AMP to your account is pending. 

Limiting Circumstances for Participation in Upside Equity Market 

Movements 

The second goal of the AMP service is to allow growth in the equity 

portion of a Client’s Account to increase the value of the overall Account. 

This is the “participation” portion of GFAM’s “participation and 

protection” objective. Clients who elect AMP should know that the 

“cost” of the protection will mute returns when equity markets are increasing 

in value. This drag would generally result because (1) the AMP 


Page 12 of 22 


service acts contrary to the AMP equity benchmark used by GFAM to 

implement the AMP service, and (2) the cost of the hedging vehicles 

used in the AMP service may, from time to time, increase, particularly 

in declining equity market conditions. As a result, a Client’s Account 

will not mirror the performance of the overall equity market. Portfolios 

with AMP may fall while the overall equity market is rising in certain 

time intervals, and may fall more than the overall equity markets in 

certain intervals. It should also be noted that a consistent pattern has 

been observed in the market that the cost of the AMP service rises 

and stays high for extended periods of time following periods of rapid 

or sustained equity market decline. 

Disclosure of Conflicts of Interest 

GFWM will receive management fees as investment adviser to the 

Contra Fund, currently the primary component of the AMP service. 

Such management fees are in addition to the fees GFWM receives 

under the IMSA. 

REVIEW OF ACCOUNTS 

GFWM’s Investment Management (“IM”) Department reviews on an 

ongoing basis the performance of the Strategies within each of the 

Investment Solutions, as well as the individual performance of each 

Portfolio Strategist, Discretionary Manager and Investment Management 

Firm, and the individual securities used in certain GFAM Investment 

Solutions. The Clients and their Financial Advisors may contact 

GFWM to arrange for consultations regarding the management of 

their Accounts. Clients should refer to their Financial Advisors to discuss 

and assess their current financial situation, investment needs 

and future requirements in order to implement and monitor investment 

Portfolios designed to meet the Client’s financial needs. 

TRADE EXECUTION AND BROKERAGE ALLOCATION 

Trading is directed by and is the responsibility of GFWM. Subject to 

the Client’s chosen Investment Solution and Strategies, GFWM gives 

instructions for the purchase and sale of securities for Client Accounts. 

GFWM selects the broker-dealers or others with which transactions 

for Client Accounts are effected. 

GFWM or the Discretionary Manager, if applicable, will generally direct 

most, if not all transactions to the Account Custodian. If the selected 

custodian is GFTC, generally most, if not all transactions will 

be directed to Fidelity Brokerage Services, LLC, and/or National Financial 

Services, LLC (collectively and individually “Fidelity”) or other 

broker-dealers selected by GFWM, and contracted with by GFTC, in 

view of their execution capabilities, and because the selected brokerdealer(s) 

is paid by GFWM or GFTC and generally does not charge Client 

Accounts transaction-based fees or commissions for its execution 

service. In certain circumstances, better execution may be available 

from broker-dealers other than the broker-dealer(s) generally used by 

the Client’s Custodian. GFWM, or other Discretionary Manager in the 

instance of IMA, MSA and CMA Accounts, may trade outside the selected 

broker-dealer(s). 

For accounts custodied at GFTC, GFWM will normally combine purchase 

and sale transactions for a security into a single brokerage order. 

By combining the purchase and sale transactions into a single 

brokerage order, Clients that are buying a security will receive the 

same average price as Clients that are selling the same security and 

Clients selling will receive the same average price as Clients that are 

buying the same security, based on the single net order placed by 

GFWM. This aggregation process could be considered to result in a 

cross transaction among affected Client accounts. 

ETFs are traded daily at market determined prices on a national ex- 

R273-SchH-Ref (2010/04)

change in a similar manner to other individual equity securities. Although 

ETFs are priced intra-day in the same manner as other equity 

securities, GFWM typically directs trades for ETFs once daily. The 

actual timing of trade order execution may vary, depending upon trade 

volume, systems limitations and issues beyond GFWM’s control, and 

the actual fulfillment of trade orders by the broker in the market may 

take place at different prices and different times throughout the day. 

GFWM submits ETF trades for a given day to each broker in a random 

order to provide the most feasibly equivalent execution for all participating 

Clients. On days with heavy trade volumes, GFWM may utlilize 

“not held” and/or “limit order” instructions in an attempt to reduce 

market impact on the price received for the security. With respect to 

ETFs for which it may be impracticable to execute all transactions in 

a single day in response to a Portfolio Strategist’s adjustments and 

rebalancing of its ETF asset allocation, ETF trades may be placed on 

a “not held” basis, with timing and pricing instructions from GFWM 

that the broker can use to execute the trades during subsequent trading 

days. 

Clients should be aware that the arrangement regarding Fidelity described 

above may operate as an incentive for GFWM to utilize that 

broker-dealer regardless of execution quality, in order to avoid incurring 

the charges that may accompany trading with other broker-dealers. This 

incentive may create a conflict of interest to the extent that GFWM utilizes 

Fidelity to execute trades for Client accounts when higher quality 

execution might be available through other broker-dealers. 

PROXY VOTING POLICY 

PMA or UMA Investment Solutions 

If the Account is invested in a PMA or UMA Investment Solution, the 

Client designates the applicable Discretionary Manager as its agent 

to vote proxies on securities in the Account and make all elections 

in connection with any mergers, acquisitions and tender offers, or 

similar occurrences that may affect the assets in the Account. Client 

acknowledges that as a result of this voting designation it is also designating 

the Discretionary Manager as its agent to receive proxies, 

proxy solicitation materials, annual reports provided in connection 

with proxy solicitations and other materials provided in connection 

with the above actions relating to the assets in the Account. However, 

the Client retains the right to vote proxies and may do so by notifying 

GFWM in writing of the desire to vote future proxies. Additionally, this 

designation of the Discretionary Manager to vote proxies and the Client’s 

right to vote proxies may not apply to securities that may have 

been loaned pursuant to a securities lending arrangement despite efforts 

by GFWM to retrieve loaned securities for purposes of voting 

material matters. 

If shares of the Genworth Financial Contra Fund, the AssetMark Funds 

or any other mutual fund or ETF that may be advised by GFWM or an 

affiliate, are held in an Account for which GFWM (including through 

its GFAM Division) acts as Discretionary Manager, GFWM will vote 

100% of the shares over which it has voting authority according to 

instructions it receives from its Clients, which are the Fund’s beneficial 

shareholders. GFWM will vote shares with respect to which is does 

not receive executed proxies in the same proportion as those shares 

for which it does receive executed proxies. This is known as “mirror 

voting” or “echo voting.” 

Mutual Fund, ETFs, and other Accounts 

The Client retains the right to vote proxies if the Account is invested 

in a Mutual Fund, ETF, or Variable Annuity Investment Solution or if 

the Account is an Administrative/Non-Managed Account, including a 

General Securities Account or Cash Alternative Account. 

R273-SchH-Ref (2010/04) 


Page 13 of 22 


Class Actions and similar actions 

In all instances the Client shall make any and all elections with regard 

to participation in class actions, notices regarding bankruptcies and 

similar elections. 

GFWM’s Policies 

Below is a summary of GFWM’s proxy voting policies and procedures. 

To receive a copy of GFWM’s Proxy Voting Policies and Procedures 

or to find out how GFWM voted Client securities, Clients should call 

GFWM Advisor Services at 800 664.5345, Option 1. 

GFWM has adopted Proxy Voting Policies and Procedures (“Policies”) 

designed to fulfill its duties of care and loyalty to its Clients. GFWM 

has adopted a set of voting guidelines provided by an unaffiliated thirdparty 

firm with which it has contracted to vote proxies on its behalf. 

These Policies and the voting guidelines provide that votes will be 

cast in a manner consistent with the best interests of the client. The 

specific guidelines established in the Policies address a broad range 

of issues including board composition, executive and director compensation, 

capital structure, corporate reorganizations, shareholder 

rights, and social and environmental issues. The Policies provide for 

the identification of potential conflicts of interest, determination of 

whether the potential conflict may be material, and they establish procedures 

to address material conflicts of interest. To address voting 

items identified as those in which GFWM may have a material conflict 

of interest, GFWM may rely on the third party firm to vote according 

to the guidelines. GFWM may also refer a proposal to the Client and 

obtain the Client’s instruction on how to vote, or disclose the conflict 

to the Client and obtain the Client’s consent on its vote. GFWM is not 

obligated to vote every proxy; there may be instances when refraining 

from voting is in the best interests of the Client. GFWM may vote the 

securities of different Clients differently. GFWM may consult with the 

Investment Management Firm who recommended a security for the 

Investment Management Firm’s recommendation on the manner in 

which to vote the security. GFWM will generally delegate the voting 

of all proxies by the AssetMark Funds to the Sub Advisors engaged to 

advise the AssetMark Funds. 

INVESTMENT IN GE AND GENWORTH SECURITIES 

GFWM is wholly owned by Genworth Financial, Inc. (“Genworth”). 

GFWM does not invest Client Account assets in securities issued by 

Genworth or its affiliates, even when the Client’s investment objective 

might call for investment in companies having characteristics similar 

to those of Genworth or its affiliates. 

The Discretionary Managers of IMA, MSA and CMA Investment Solutions 

that are not affiliated with GFWM may invest the Account in 

securities issued by Genworth Financial, Inc., or any of its affiliates. 

Genworth was formerly a subsidiary of General Electric Company 

(“GE”). GE no longer has any ownership interest in GFWM’s parent, 

Genworth, and GFWM has determined that, it may invest Client Accounts 

in securities issued by GE and its affiliates. GFWM’s investment 

of Client Accounts in GE securities will be based on the investment 

merits of the securities and the determination that the investment is 

appropriate. Although GE no longer has an ownership interest in Genworth, 

conflicts of interest may still exist in GFWM’s investment of 

Client Accounts in GE securities because GFWM, Genworth and their 

affiliates continue to maintain certain relationships, including service 

agreements, with GE and its affiliates. 

The mutual funds and other collective investment vehicles in which 

Client assets may be invested may invest, depending upon their investment 

objective and decisions by their independent investment

managers, in securities issued by Genworth and/or GE and/or their 

affiliates. GFWM will not have any role in determining whether a fund 

should purchase or sell Genworth or GE securities. GFWM may invest 

Client assets in funds that have held, hold or may hold Genworth or 

GE securities. GFWM’s decision to invest Client assets in such funds 

will be based on the merits of investing in such a fund and a determination 

that such an investment is appropriate for the Client’s selected 

investment objective. 

INVESTMENT AND TAX RISKS 

Clients should understand that all investments involve risk (the amount 

of which may vary significantly), that investment performance can 

never be predicted or guaranteed and that the value of their Accounts 

will fluctuate due to market conditions and other factors. Clients who 

open Accounts by transferring securities instead of opening an Account 

with cash, should also understand that all or a portion of their 

securities may be sold either at the initiation of or during the course of 

management of their Accounts. The Client is responsible for all of the 

tax liabilities arising from such transactions and is encouraged to seek 

the advice of a qualified tax professional. GFWM does not provide tax 

advice. 

FEES 

OVERVIEW 

The fees applicable to each Account on the Platform are: 

1. Initial Consulting Fees; 

2. Account Fees – comprised of the Client Fee plus, if applicable, the 

Investment Manager Fee(s); 

3. Administrative Fees – if applicable; and 

4. Other Fees and Expenses, such as Special Request Services Fees, 

if applicable. 

Unless other arrangements are made, the Custodian will debit these 

fees from the Account. Additional fees may be due pursuant to a separate 

Custody Agreement with the Custodian. 

INITIAL CONSULTING FEE (“ICF”) 

An Initial Consulting Fee (“ICF”) of up to one percent (1.00%) of any 

cash deposit or in-kind investment transfer of $2,000 or more to the 

Account may be assessed and paid to the Financial Advisory Firm. The 

amount of the ICF, if any, will be determined by agreement between 

the Client and the Client’s Financial Advisor. 

ACCOUNT FEES 

The Account Fee consists of: 

- the Client Fee plus, 

- for Accounts invested in IMA or UMA Investment Solutions, applicable 

Investment Manager Fees. 


Page 14 of 22 


deposit multiplied by one quarter (25%) of the applicable annual rate. 

For assets invested in the Account throughout the full, preceding quarter, 

including as of the last day of the preceding quarter, the Account 

Fee shall be calculated on the average daily value of all such Account 

assets, multiplied by one quarter (25%) of the applicable annual rate. 

Each of the Financial Advisor Fee, GFWM Advisory Fee and, if applicable, 

the Investment Manager Fee are calculated on a “tiered” basis 

with the assets on the lowest asset value tier receiving the highest 

percentage rate fee and only assets over the value level for the higher 

tiers receiving the lower percentage rates fees. 

Upon termination of the Account, any prepaid Account Fees are refunded 

pro-rata. 

FINANCIAL ADVISOR FEE 

The Financial Advisor (“FA”) and Client select an annual rate for the 

Financial Advisor Fee, which is paid to the Financial Advisory Firm, by 

choosing: 

1. a Negotiated Rate -- a rate between and including 0 to 1.35% (135 

basis points), as negotiated and agreed between the Client and 

the Financial Advisor; or 

2. the Standard Financial Advisor Fee Rate -- the rate specified below 

for the Account’s Investment Solution. 

For Category I Investment Solutions (for all Investment Solutions, except 

for those listed as Category II below): 

Assets Under Management Standard Financial Advisor Fee Rate 

First $500,000 1.00% 

$500,000 – $1 million 0.80% 



For Category II Investment Solutions (for accounts investing in 100% 

Fixed Income (i.e. GFAM Principal Return Exposure Strategy or GFAM 

Fixed Income): 

Assets Under Management Standard Financial Advisor Fee Rate 

First $500,000 0.50% 

$500,000 – $1 million 0.50% 



In addition to the rates described in the above tables, an additional fee 

of up to 0.10% annually may be deducted from Client Account assets 

and paid to certain Financial Advisory Firms, if the Account is invested 

in a Mutual Fund, ETF, Variable Annuity, Third-Party IMA or CMA Investment 

Solutions. 

The Client Fee consists of: 

- the Financial Advisor Fee plus 

- the GFWM Advisory Fee. 

Account Fees are payable quarterly, in advance, for the upcoming calendar 

quarter, at the annual rates provided below, based on the Account 

assets. 

For the initial deposit to the Account and for any subsequent, additional 

amounts deposited to the Account, the Account Fee for that deposit 

shall be payable upon deposit and shall be equal to the amount of the 

R273-SchH-Ref (2010/04)

GFWM ADVISORY FEE SCHEDULES 


Page 15 of 22 


Following are the GFWM Advisory Fee schedules for the various Investment Solutions. The annual rate of the ongoing GFWM Advisory Fee 

is based on the amount and type of assets under GFWM management. Each fee schedule is tiered so that, subject to certain exceptions, the 

first dollar under management receives the highest fee and only those assets over the breakpoints receive the reduced fees. Assets held in 

one GFWM Investment Solution Account may be considered when determining assets under management for breakpoint purposes relating to 

another Investment Solution Account held for the benefit of the same or a related person. The GFWM Advisory Fee, subject to a minimum fee, 

shall be charged at the rates listed below. 

Mutual Funds, ETFs & Variable Annuity Accounts 



Funds 

Third-Party Mutual 

Funds 

ETF Account: 

Strategic & Tactical 

Constrained 

ETF Account: 

Tactical 

Unconstrained 

First $ 250,000 0.00% 0.45% 0.45% 0.65% 0.65% 

$ 250,000 - $ 500,000 0.00% 0.40% 0.45% 0.60% 0.60% 

$ 500,000 - $ 1,000,000 0.00% 0.35% 0.45% 0.55% 0.55% 

$ 1,000,000 - $ 2,000,000 0.00% 0.30% 0.40% 0.50% 0.50% 

$ 2,000,000 - $3,000,000 0.00% 0.20% 0.40% 0.40% 0.40% 

$ 3,000,000 - $ 5,000,000 0.00% 0.20% 0.35% 0.40% 0.40% 

Over $ 5,000,000 0.00% 0.20% 0.25% 0.40% 0.40% 

Variable Annuity 

Accounts 

CMA Manager Select 


Account Asset Level IMA GFAM Preservation GFAM Fixed Income 

Strategy 

& PRX 

First $ 250,000 0.45% 0.75% 0.45% 0.80% 0.90% 

$ 250,000 - $ 500,000 0.45% 0.50% 0.45% 0.80% 0.90% 

$ 500,000 - $ 1,000,000 0.45% 0.50% 0.35% 0.80% 0.90% 

$ 1,000,000 - $ 2,000,000 0.40% 0.45% 0.25% 0.75% 0.85% 

$ 2,000,000 - $3,000,000 0.40% 0.45% 0.25% 0.75% 0.85% 

$ 3,000,000 - $ 5,000,000 0.35% 0.40% 0.25% 0.70% 0.80% 

Over $ 5,000,000 0.25% 0.30% 0.20% 0.65% 0.75% 

There is no Investment Manager Fee for CMA, MSA, GFAM Preservation, GFAM Fixed Income, and GFAM PRX accounts 

UMA Accounts (GMS, PMP & ARO) 

Account Asset Level GMS I GMS II ARO 50 ARO 100 ARO 250 PMP II 

ARO 500 

PMP I 

First $100,000 0.75% 0.40% 0.75% 0.65% 0.85% 0.45% 

$100,000 to $250,000 0.55% 0.25% 0.75% 0.65% 0.85% 0.45% 

$ 250,000 - $ 500,000 0.45% 0.20% 0.45% 0.45% 0.85% 0.45% 

$ 500,000 - $ 1,000,000 0.40% 0.15% 0.40% 0.40% 0.70% 0.35% 

$ 1,000,000 - $ 2,000,000 0.40% 0.10% 0.40% 0.40% 0.47% 0.15% 

$ 2,000,000 - $3,000,000 0.40% 0.10% 0.40% 0.40% 0.47% 0.15% 

$ 3,000,000 - $ 5,000,000 0.40% 0.10% 0.40% 0.40% 0.47% 0.15% 

Over $ 5,000,000 0.25% 0.00% 0.25% 0.25% 0.25% 0.00% 

R273-SchH-Ref (2010/04)

GFWM Minimum Advisory Fee 


Page 16 of 22 


If on any given quarterly billing cycle, the GFWM Advisory Fee is less than the stated GFWM Minimum Advisory Fee shown below, then the 

applicable minimum fee will be charged to the Account. This minimum fee does not apply to accounts custodied at GFTC. 


Custodian 

Pershing and 

TD Ameritrade 

AssetMark 

Mutual Funds 


Third Party 

Mutual Funds 

AssetMark Funds 

Distribution 

Strategies 

Third Party 

Mutual Funds and 

ETF Distribution 

Strategies 

ETF Accounts 

Strategic 

& Tactical 

Constrained 

ETF Accounts 

Tactical 

Unconstrained 

$25 $45 $112 $225 $90 $130 

Custodian Third-Party IMA GFAM 

Preservation 

Pershing and 

TD Ameritrade 

Unified Managed Accounts 

GFAM PRX CMA Manager Select 

$90 $45 $45 $800 $180 

Custodian ARO 50 ARO 100 ARO 250 ARO 500 

Pershing and 

TD Ameritrade 

$75 $130 $425 $850 

INVESTMENT MANAGER FEE 

For certain IMA Investment Solutions and UMA Investment Solution, 

an Investment Manager Fee is payable to the Account’s Discretionary 

Manager. Each Discretionary Manager has established an independent 

fee schedule for the applicable IMA or UMA Strategy. These fees 

are payable on Account assets at the following annual rates. 

• ING Investment Management – 0.30% (30 basis points). 

• Nuveen Asset Management – 0.35% (35 basis points); fees may 

be negotiated on Accounts over $20 million 

• Parametric Portfolio Associates – 0.35% (35 basis points). 

• Rochdale Investment Management – 0.60% (60 basis points); 

fees may be negotiated. 

• GFAM – UMA Accounts, including GMS, ARO and PMP – 0.60% 

(60 basis points). 

No Investment Manager Fee is payable to the Discretionary Manager 

for Manager Select, GFAM PRX, GFAM Preservation, GFAM Fixed Income 

or the CMA Investment Solutions. 

The Investment Manager Fee may be negotiated at the sole discretion 

of the Discretionary Managers. 

SERVICES PROVIDED FOR FEES 

The fees generally charged Client Accounts are, under the IMSA, the 

Initial Consulting fee, the Financial Advisor Fee, the GFWM Advisory 

Fee and, as applicable for certain IMA and UMA Accounts, an Investment 

Manager Fee and, under the Custody Agreement with GFTC or 

other Custodian, any applicable Custody Fee. Other fees for special 

services may also be charged. The Client should consider all applicable 

Account fees. 

The services provided for those fees charged under the IMSA are 

discussed throughout this Disclosure Brochure. A brief summary of 

those services is described below. 

Initial Consulting Fee and Financial Advisor Fee 

Any Initial Consulting Fee and the Financial Advisor Fee are paid to 

the Financial Advisory Firm with which the Client’s Financial Advisor 

is associated and compensate for the consultation and other support 

services provided by the Financial Advisory Firm through the Financial 

Advisor. These services include obtaining information regarding the 

Client’s financial situation and investment objectives, conducting an 

analysis to make a determination of the suitability of the services to 

be provided by GFWM for the Client, providing the Client with GFWM 

disclosure documents, assisting the Client with Account paperwork 

and being reasonably available for ongoing consultations with the Client 

regarding the Client’s investment objectives. 

GFWM Advisory Fee 

The GFWM Advisory Fee compensates GFWM for maintaining the 

Platform and providing advisory and administrative services to the Account. 

The advisory services include, but are not limited to: selecting, reviewing 

and replacing, as it deems appropriate, the Portfolio Strategists 

providing allocations, Investment Management Firms providing 

securities recommendations, Discretionary Managers providing discretionary 

management services and other Consultants and service 

providers; review and validation of Portfolio Strategists’ recommendations; 

and selecting brokerage for mutual fund and ETF shares. 

The administrative services include, but are not limited to: arranging for 

custodial services to be provided by GFWM affiliate, GFTC (pursuant 

to separate agreement between Client and GFTC, or other Custodian) 

and coordinating with Custodians regarding delivery of comprehensive 

Account services; preparation of quarterly performance reports 

(to complement Account Statements provided by Custodians); maintenance 

and access to electronic or web-based inquiry system that 

provides detailed information on each Client Account on a daily basis. 

R273-SchH-Ref (2010/04)

Investment Manager Fee 

For an Account invested in a third-party IMA Investment Solution or 

UMA Investment Solution, a separate Investment Manager Fee is 

payable to the Discretionay Manager. The Investment Manager Fee 

compensates for services provided by the Discretionary Manager that 

are customary for a Discretionary Manager to take, including but not 

limited to, selecting, buying, selling and replacing securities for the 

Account and selecting the broker-dealers with which transactions for 

the Account will be effected. 

ADMINISTRATIVE FEE FOR ADMINISTRATIVE/NON-MANAGED 

ACCOUNTS 

The Client may establish an Account to hold “non-managed” assets 

(an “Administrative/Non-Managed Account”), and such Account may 

include a Cash Alternative Account or General Securities Account. 

An Administrative/Non-Managed Account is provided as an administrative 

convenience for the Client. Assets in an Administrative/Non- 

Managed Account are not managed or advised by GFWM, and GFWM 

is not responsible for their investment or management. However, the 

assets of an Administrative/Non-Managed Account will be included 

in periodic GFWM reports to the Client. The Client will be solely responsible 

for directing the investments in the Administrative/Non- 

Managed Account. Administrative/Non-Managed assets are subject 

to the terms of the Client’s agreement with their selected Custodian. 

Custodial fees may be applicable. 

Cash Alternative Account 

In the Cash Alternative Account, the Client may select among options 

available at their selected Custodian, which may include investments 

in: 1. a Non-Transaction Fee Money Market Fund, 2. a Non-Transaction 

Fee Treasury Money Market Mutual Fund, or 3. the Custodian’s cash 

sweep vehicle. If the Client does not otherwise specify the investment 

for their Cash Alternative Account, the Account will be invested 

in the same cash equivalent investments last used for cash equivalents 

when the Account was invested pursuant to an Investment Solution. 

General Securities Account 

In the General Securities Account, the Client may move to the Account 

those equity or fixed-income securities acceptable to their selected 

Custodian. No securities may be purchased in this Account. The 

Client will be solely responsible for directing the sale of investments 

in the Account. Administrative Fees will not be charged against the assets 

of a General Securities Account. Any Administrative Fee or other 

fees payable shall be charged to another Account established under 


The Cash Alternative and General Securities Account will be charged 

the following Administrative Fee: 

Non-Managed Accounts 


Cash Alternative and 

General Securities Accounts 

First $ 250,000 0.25% 

$ 250,000 - $ 500,000 0.15% 

Over $500,000 0.10% 

The applicable quarterly minimum fee for Administrative and Non- 

Managed Accounts are shown below. 

Non-Managed Accounts 

Custodian General Securities Cash Alternative 

Pershing and 

TD Ameritrade 

FEES FOR OTHER SERVICES 

$12.50 $25 

Non-standard service fees incurred as a result of special requests 

from Clients, such as wiring funds or overnight mailing services, will 

be an expense of the Client’s Account and may be deducted by the 

Custodians at the time of occurrence. An authorized officer of GFWM 

or the Custodians must approve exceptions. 

OTHER FEE DISCLOSURES 

Negotiated Fees 


Page 17 of 22 


The Financial Advisor and Client select the Financial Advisor Fee rate, 

up to a maximum of 1.35% annually. 

Some of GFWM’s management fees are negotiable, and exceptions 

to the fee schedule detailed above may be made with the approval of 

GFWM’s President and CEO or a senior executive officer, as authorized 

by the President and CEO. Exceptions to GFWM’s Advisory Fee 

schedule for its Investment Solutions include accounts of Genworth 

Financial employees and employees of broker-dealer, investment advisory 

or other firms with whom GFWM maintains an active selling 

agreement, any of which may be offered discounted fees. 

The Investment Manager Fee may be negotiated at the sole discretion 

of the Discretionary Manager. 

Disclosure Regarding Fee Rates 

Clients should be aware that the fees charged by GFWM may be 

higher or lower than those charged by others in the industry and that 

it may be possible to obtain the same or similar services from other 

investment advisers at lower or higher rates. A Client may be able to 

obtain some or all of the types of services available through GFWM on 

an “unbundled” basis through other firms and, depending on the circumstances, 

the aggregate of any separately-paid fees may be lower 

or higher than the annual fees shown above. Clients should also be 

aware that the charge of an Initial Consulting Fee is not standard in the 

investment advisory industry. 

Clients should also be aware that the Financial Advisors recommending 

these advisory services receive compensation as a result of Clients’ 

contracting with GFWM for these services. 

Other Fees and Expenses 

Some expenses are inherent within the investments held in Client 

Accounts. Mutual funds pay management fees to their investment 

advisers, and certain funds and bank money market accounts have 

other types of fees or charges, including 12b-1, administrative or 

shareholder servicing fees, bank servicing or certain other fees, which 

may be reflected in the net asset value of these mutual funds held 

in Client Accounts. Such expenses are borne by all investors holding 

such securities in their Accounts and are separate from GFWM’s fees 

or charges. 

R273-SchH-Ref (2010/04)

Some mutual funds may charge short-term redemption fees. Currently, 

GFWM seeks to avoid investing Client assets in funds that charge 

such fees to the extent practicable, but avoidance of these fees cannot 

be guaranteed. 

When GFAM selects mutual funds used in the GFAM Investment Solutions, 

it generally selects mutual funds that are “no transaction fee” 

funds or “NTF” when available. Generally, NTF funds pay Custodians 

Administrative Service Fees (“ASF”) for services provided. 

In addition to the payments it receives from GFWM for Client custodial 

services, GFTC receives ASFs either directly from certain mutual 

funds, banks and insurance companies, or from their respective service 

providers. Any such income received by GFTC is in payment of 

administrative services it provides. These payments may be used to 

offset the annual custody fees that are otherwise payable by IRA and 

ERISA Clients. 

The Account may also incur expenses related to deposits on small 

accounts and the custody of foreign securities, including fees from 

paying agents of the issuers of foreign securities, such as American 

Depository Receipts (e.g., “ADR Fees”). ADR Fees may appear as a 

separate fee on Account statements. The Account may also incur fees 

for equity transactions known as “SEC fees” or “Section 31 fees.” 

These transactions fees are paid by self-regulatory organizations to 

the U. S. Securities and Exchange Commission to pay the costs incurred 

by the government in supervising and regulating the securities 

markets and securities professionals, and broker-dealers, in turn, recover 

these costs from customers. 

Additionally, GFWM provides the Custodians certain services with respect 

to the custody arrangements. If the Client selects a Custodian 

other than GFTC, the selected Custodian will remit a portion of the fee 

it charges the Client or receives from other parties including mutual 

funds, to GFWM as compensation for these services. The formula under 

which GFWM’s compensation will be calculated is prospectively 

agreed upon by the Custodian and GFWM, and will be a function of 

agreed upon basis points on the average daily value of assets under 

management or custody, or other methodology agreed to by the parties 

annually. The formula is set for a 12-month period, after which a 

new formula may be renegotiated between GFWM and the Custodian 

to take effect on a prospective basis. Further information about the 

compensation paid GFWM, including current and historical compensation 

is available on request. The Client hereby acknowledges and 

agrees that GFWM will receive, as reasonable compensation for its 

services, the sum of (i) the fees applicable to the Account under this 

Agreement and (ii) the amount payable to GFWM by the Custodian. 

CUSTODY SERVICES AND FEES 

GFWM provides access to the following qualified custodians: 

• Genworth Financial Trust Company (“GFTC”), an Arizona trust 

company and affiliate of GFWM, 3200 North Central Avenue, 

Seventh Floor, Phoenix, Arizona 85012. Its mailing address is P.O. 

Box 80007, Phoenix, Arizona 85060. 

• Pershing Advisor Solutions (“PAS”). One Pershing Plaza, Jersey 

City, NJ 07399 

• TD Ameritrade (“TDA”). 1005 North Ameritrade Place, Bellevue, 

NE 68005 

The assets of each Client Account may be custodied at GFWM affiliate 

GFTC or other qualified Custodian, and each Client must contract 

separately with GFTC or other Custodian for custodial services. Pursuant 

to the Custody Agreement, the Client authorizes the Custodian 

to debit Custodial Account Fees from the Account. These fees are for 

custodial services to the Account and are separate, and in addition to, 

other fees that the Custodian may be authorized to deduct from the 

Account, including the fees under the IMSA. 

R273-SchH-Ref (2010/04) 


Page 18 of 22 


All Client accounts are separately maintained on the records of the 

Client’s selected Custodian. With regard to GFTC, Client funds and 

securities may be held in omnibus accounts at various banks, brokerdealers 

and mutual fund companies. The holdings of these omnibus 

accounts reflect book-entry securities, which GFTC allocates to the 

individual Client accounts on its own records. GFTC may use subcustodians 

in fulfilling its responsibilities, including National Financial 

Services Corp., (whose affiliated broker-dealer, Fidelity Brokerage Services, 

LLC, also provides brokerage and clearing services for Client 

accounts), and Bank One. 

The Custodians provide Clients with a quarterly statement of their account, 

with information including Account holdings and fees; full yearend 

tax reporting for taxable accounts and fiscal year-end reporting 

for Accounts held for tax-qualified entities; and access to electronic or 

web-based inquiry system that provides detailed information on each 

Client’s account on a daily basis. 

Custodial Account Fees 

Custodial Account Fees will differ depending upon the Investment Solution 

chosen for the Account. Assets of other Accounts owned by 

the same Client will not be aggregated when calculating Custodial 

Account Fees. Each Client Account is subject to the custodial account 

fees described in their separate custody agreement. Although custodial 

fees may vary at each Custodian, generally, the custodial fees for 

the Investment Solutions, if available, are described below: 

Mutual Fund Accounts – flat quarterly fee 

If the Account is invested pursuant to a Mutual Funds Investment Solution, 

including those in the Distribution Strategies which invest in 

mutual funds, and contains assets as of the last business day of any 

calendar quarter, a Custodial Account Fee shall be due and debited the 

Account, on the first business day of the following calendar quarter, 

in payment of fees for the upcoming calendar quarter. No fees are 

charged upon receipt of assets to an Account. No fees are prorated 

or refunded. 

ETF, IMA, MSA and CMA Accounts – basis points fee on assets 

If the Account is invested pursuant to: 1. an ETF Investment Solution, 

including those in the Distribution Strategies which invest in ETFs, or 

2. an Individually Managed Account (“IMA”) Investment Solution, but 

not including a GFAM PMA (discussed below), or 3. a Manager Select 

Account (“MSA”), or 4. a Consolidated Managed Account (“CMA”) Investment 

Solution, a Custodial Account Fee shall be payable quarterly, 

in advance, for the upcoming calendar quarter, at the following annual 

rates, based on the average daily value of the Account’s “billable assets” 

for the period during which assets were held in custody during 

the preceding calendar quarter. The Custodial Account Fee shall be 

calculated on a “tiered” basis with the assets on the lowest asset 

value tier receiving the highest percentage rate fee and only assets 

over the value level for the higher tiers receiving the lower percentage 

rates fees. No fees are charged upon receipt of assets to an Account 

or during the Account’s first calendar quarter. No fees are prorated or 

refunded, including upon termination of the Account. 

GFAM PMA 

If the Account is invested in a PMA Investment Solution managed by 

GFAM no separate custodial account fee will be charged. Payment for 

custodial and brokerage or trading services is included in the GFWM 

Advisory Fee pursuant to the IMSA. GFAM PMAs include GFAM Principal 

Return Exposure Strategy, GFAM Preservation Strategy (which invests 

generally in mutual funds), and GFAM Fixed Income Accounts.

UMA Accounts – basis points fee on deposits to small accounts 

If the Account is invested pursuant to a Unified Managed Account 

(“UMA”) Investment Solution, payment for custodial and brokerage 

or trading services is included in the GFWM Advisory Fee pursuant 

to the IMSA. No separate custodial account fee will be charged to an 

Account invested in a UMA Investment Solution unless it is a “small 

account” as described below. 

If UMA Account assets plus the value of the deposit being made to 

the Account are valued at less than $250,000, a Custodial Account Fee 

of 0.25% shall be payable on any cash deposit or in-kind investment 

transfer of $2000 or more. 

Administrative/Non-Managed Accounts 

Clients may transfer assets in-kind, to the extent acceptable by the 

Custodian, to the custodial Account established pursuant to the Custody 

Agreement, with instructions that GFWM not exercise discretionary 

authority over those assets (“Administrative/Non-Managed 

assets”). GFWM will not be responsible for these assets. GFWM will 

neither manage these assets nor give any advice with regard to these 

assets. The Custodial Account Fee for an Administrative/Non-Managed 

Account varies at each Custodian and shall be payable quarterly in advance. 

There shall be no refund of any portion of the Custodial Fee 

upon termination of an Administrative/Non-Managed Account. 

All mutual funds and ETFs purchased for the Client’s Portfolio are held 

by the Custodian selected by the Client. Each of the Client’s investments 

is held by the selected Custodian in the Client’s name in a separate 

account. The Client is entitled to receive a copy of the Prospectus 

for each mutual fund, and confirmations of each security purchased 

and sold for the Client’s Account (either separately or as part of the 

periodic custodial statement) and copies of all annual and periodic reports 

issued by the mutual funds the Client holds. The IMSA provides 

that the Client delegate receipt of such materials and confirmations 

to GFWM, but such delegation can be terminated and the Client can 

receive such materials and confirmations by providing written notice 

to GFWM. In addition, the Client retains all indicia of beneficial ownership, 

including, without limitation, all voting power and other rights as 

a security holder in each of the funds held for the Client. Variable annuity 

sub-accounts will be held pursuant to the terms and conditions 

contained in a variable annuity Prospectus delivered to the Client by 

the specific variable annuity issuer. 

GFWM reserves the right, in its sole judgment, to accept certain investments 

below the standard minimum account size. However, an 

account may be charged a GFWM Minimum Account Fee if the average 

daily value of the account is below the minimum account size. 

Each Custodian maintains on its books a separate account for each 

Client Account and segregates in its books each Client’s Account assets. 

GFTC does not take physical custody of Client assets, but holds 

assets by book entry. PAS and TDA have physical custody of assets 

held in Client accounts. 

GENERAL INFORMATION REGARDING CLIENT ACCOUNTS 

CLIENT REPORTS 

The Custodian selected by the Client shall send periodic account statements 

detailing the Client’s individual Account(s), including portfolio 

holdings and market prices, all transactions (such as trades, cash contributions 

and withdrawals, in kind transfers of securities, interest and 

dividend or capital gains payments) for each individual Client Account, 

and fee deductions. Additionally, Clients are able to inquire about 


Page 19 of 22 


their current holdings and the value of their Accounts on a daily basis 

by electronic or web-based access. The Custodian may also send a 

Transaction Acknowledgement to the Client for all cash contributions, 

withdrawals and in kind transfers as they occur. Although the standard 

form of IMSA provides that the receipt of individual transaction 

confirmations is waived by the Client, a Client may elect, by written 

request to GFWM or GFTC, to receive a confirmation of each security 

transaction and such confirmations will thereafter be provided. 

The Custodians will mail a letter of acknowledgement confirming the 

establishment of an Account and receipt of assets, separately to the 

Account’s address of record. Clients are strongly encouraged to review 

all statements, acknowledgements and correspondence sent by 

the Custodian. 

IRA AND ERISA ACCOUNTS 

If a Client is an Individual Retirement Account (IRA) or subject to 

ERISA, the Client and/or their Financial Advisor must inform GFWM in 

writing, and the Client agrees to be bound by the terms of the “ERISA 

and IRA Supplement to GFWM Investment Management Services 

Agreement.” GFWM does not serve as a trustee or plan administrator 

for any ERISA plan, and does not advise such plans on issues such as 

funding, diversification or distribution of plan assets. 

REASONABLE RESTRICTIONS, PLEDGING AND WITHDRAWING 

SECURITIES 

GFWM Clients have the option to place restrictions against investments 

in specific securities or types of securities for their account 

that are reasonable in light of the advisory services being provided 

under the different Investment Solutions offered on the Platform, understanding 

that any restrictions placed on an Account may adversely 

affect performance. Requests for such restrictions are reviewed by 

GFWM to ensure that they are reasonable and will not unduly impair 

GFWM’s ability to pursue the Investment Solution and Strategy selected 

by the Client. Clients may also pledge the securities in their 

account or withdraw securities from their account (transfer in-kind to 

another account or custodian), but must do so by giving instructions in 

writing to GFWM and GFTC. 

PROSPECTUSES & OTHER INFORMATION 

If the Account is invested in a PMA or UMA Investment Solution, the 

Client designates the applicable Discretionary Manager as their agent 

and attorney-in-fact to obtain certain documents related to securities 

purchased on a discretionary basis for their account. Clients waive 

receipt of prospectuses, shareholder reports, proxies and other documents. 

This waiver by the Client may be rescinded at any time by 

written notice to GFWM. 

On request, GFWM will provide Clients with an overview briefly describing 

any Portfolio Strategist or Investment Management Firm participating 

in an Investment Solution. These overviews will focus on 

each Portfolio Strategist’s or Investment Management Firm’s investment 

style. The Genworth Financial Contra Fund and the AssetMark 

Funds prospectus and shareholder reports are also made available to 

those Clients invested in that fund. 

ACCOUNT LIQUIDITY RESERVE 

To properly maintain cash flows for Client needs, a portion of all Client 

accounts is maintained in a short term investment vehicle. This liquidity 

reserve may be invested in a money market mutual fund or other 

short term pooled investment vehicle, as determined by Custodian. 

R273-SchH-Ref (2010/04)

DELIVERY OF FUND REDEMPTION PROCEEDS 

Mutual funds may be included in Client Accounts. Under certain economic 

or market conditions or other circumstances, mutual funds may 

pay redemption proceeds by an in-kind distribution of securities in lieu 

of cash. Mutual funds, broker-dealers or transfer agents may experience 

delays in processing orders, or may suspend redemptions or 

securities trading under emergency circumstances declared by the 

Securities and Exchange Commission, the New York Stock Exchange, 

or other stock exchanges or regulatory agencies. 

PARTICIPATION OR INTEREST IN CLIENT TRANSACTIONS 

GFWM has adopted a Code of Ethics (the “Code”) that is intended 

to comply with the provisions of Rule 204A-1 under the Investment 

Advisers Act of 1940 (“Advisers Act”), which requires each registered 

investment adviser to adopt a code of ethics setting forth standards 

of conduct and requiring compliance with federal securities laws. Additionally, 

the Code is designed to comply with Section 204A of the 

Advisers Act, which requires investment advisers to establish, maintain 

and enforce written policies and procedures reasonably designed, 

taking into consideration the nature of such investment adviser’s business, 

to prevent the misuse of material, non-public information by 

any person associated with such investment adviser. GFWM’s Code 

requires that all “Supervised Persons” (including officers and certain 

affiliated persons and employees of GFWM) in carrying out the operations 

of GFWM, adhere to certain standards of business conduct. 

Specifically, the Code requires that these persons: (i) comply with all 

applicable laws, rules and regulations, (ii) avoid any conflict of interest 

with regard to GFWM and its Clients, (iii) avoid serving their personal 

interests ahead of the interests of GFWM and its Clients, (iv) avoid 

taking inappropriate advantage of their position with GFWM or benefiting 

personally from any investment decision made, (v) avoid misusing 

corporate assets, (vi) conduct all of their personal securities transactions 

in compliance with the Code, and (vii) maintain, as appropriate, 

the confidentiality of information regarding GFWM’s operations. 

The Code contains a number of prohibitions and restrictions on personal 

securities transactions and trading practices that are designed to 

protect the interests of GFWM and its Clients. First, the Code prohibits 

trading practices that have the potential to harm GFWM and/or its 

Clients, including excessive trading or market timing activities in any 

account that GFWM manages, trading on the basis of material nonpublic 

information, and trading in any “Reportable Security” which is 

being purchased or sold, or is being considered for purchase or sale 

by the Accounts managed by GFWM or any GFWM-advised mutual 

funds. Second, the Code mandates the pre-clearance of certain personal 

securities transactions, including transactions in securities sold 

in initial public offerings or private placements. The Code also requires 

the pre-clearance of Reportable Security transactions for certain Access 

Persons. Finally, the Code requires employees to submit, and 

the Chief Compliance Officer (the “CCO”) to review, initial and annual 

holdings, and quarterly transaction reports. 

GFWM utilizes Financial Tracking Technologies to provide enhanced 

tracking of employee transactions and gives GFWM the ability to analyze 

employee trading against certain parameters and transactions in 

its managed Accounts or any GFWM-advised funds. Access Persons 

also utilize this system to annually certify their receipt of, and compliance 

with, the Code and pre-clear their Reportable Security transactions, 

if they are required to do so by the Code. 

All Supervised Persons under the Code are responsible for reporting 

any violations of the Code to the CCO. The Code directs the CCO to 

submit reports to the Board of Trustees of any GFWM-advised funds 

regarding compliance with the Code, and to impose sanctions on violators, 

as warranted. 

R273-SchH-Ref (2010/04) 


Page 20 of 22 


GFWM will provide a copy of the Code to any Client or prospective 

Client upon request. 

GFWM EDUCATION AND BUSINESS STANDARDS 

GFWM requires that employees providing investment advice are required 

to have financial or analytical experience and to have qualified 

for registration as an Investment Advisory Representative as required 

by applicable state securities regulations, either by having passed 

the Uniform Investment Adviser Law Examination (Series 65) or by 

possessing other qualifying designations. In addition to the foregoing, 

members of GFWM’s Investment Management Department (“IM 

Department”) are generally required to have a college education or 

equivalent experience, analytical or portfolio management experience, 

and/or to have obtained the Chartered Financial Analyst (CFA) designation. 

GFWM is a wholly owned subsidiary of Genworth Financial, Inc., a 

publicly held insurance holding company. GFWM was previously 

named AssetMark Investment Services, Inc. (“AIS”), and was renamed 

in connection with the merger of an affiliated registered investment 

adviser, Genworth Financial Asset Management, Inc., into 

AIS in August 2008. GFWM is also the investment adviser for the AssetMark 

Funds, the Genworth Variable Insurance Trust (“GVIT”), and 

the Contra Fund. An affiliate of GFWM, Capital Brokerage Corporation 

(“CBC”) is a broker-dealer registered with the Financial Industry 

Regulatory Authority (“FINRA”) and acts as the distributor for the AssetMark 

Funds, the GVITs, and the Contra Fund. 

BACKGROUND OF PRINCIPAL EXECUTIVE OFFICERS & 

INVESTMENT MANAGEMENT STAFF 

Executive Management Team 

Gurinder Singh Ahluwalia, born in 1965, is President and Chief Executive 

Officer of GFWM. Previously, he was Vice Chairman of GFWM 

and AssetMark Investment Services, Inc. and Director, Chairman of 

the Board, President and Chief Executive Officer of Genworth Financial 

Asset Management, Inc. Mr. Ahluwalia received a B.E. degree in 

1987 from The Cooper Union, New York, New York, a Bachelor’s Degree 

in 1987 from New York University, and Master’s Degree in 1990 

from New Jersey Institute of Technology. 

Daniel Patrick O’Toole, born in 1966, is National Director of Sales & 

Consulting for GFWM. Previously, he was Regional Consultant for 

the U.S. Midwest Region, Senior Vice President and Director of Sales 

and Consulting of AssetMark Investment Services, Inc. Mr. O’Toole 

received a Bachelor’s Degree in Economics in 1988 from San Diego 

State University. 

Carrie Ellen Hansen, born in 1970, is Chief Operations Officer of 

GFWM, and President of the AssetMark Funds, the Genworth Financial 

Contra Fund, and the Genworth Variable Insurance Trust. Previously, 

she was Senior Vice President and Chief Compliance Officer 

of AssetMark Investment Services, Inc. Ms. Hansen received a Bachelor’s 

Degree in Business Administration in 1992 from the University 

of California, Berkeley, and is a Certified Public Accountant. 

Michael Joel Abelson, born in 1970, is Senior Vice President, Business 

Development of GFWM. Previously, he was Senior Vice President, 

Business Development for AssetMark Investment Services, Inc., and 

prior to that for Genworth Financial Asset Management from 2003 to 

2006. Mr. Abelson received a Bachelor’s Degree in Psychology in 1992 

from California State University, Fresno and an MBA in Investments in 

1997 from the University of Southern California. He also earned his 

Chartered Financial Analyst designation in 2000. 

John Wicliffe Murray, Jr. born in 1961, is Senior Vice President and

Chief Information Officer for GFWM. Previously, he was founder and 

Managing Member of Element98 Software, LLC a technology strategy 

and implementation firm. Prior to that Mr. Murray was the Chief 

Technology Officer for Brigade Corporation. Mr. Murray received his 

Bachelor’s Degree in Business in 1982 from the University of Southern 

California, and an MBA in 1987 from the Haas School of Business, 

University of California, Berkeley. 

Mark Paul Schoenbeck, born in 1974, is Senior Vice President and 

Chief Marketing Officer of GFWM. Previously, he was Senior Vice 

President, Professional Development for Genworth Financial, Inc. Prior 

to that, he was Vice President, Corporate Development for Curian 

Capital from 2005-2007, and Vice President, Advisory Services for Mutual 

Service Corporation from 2000-2005. Mr. Schoenbeck received a 

Bachelor’s Degree in Business Administration in 1996 from California 

Lutheran University, and is a Certified Financial Planner. 

Cameron Lee Miller, born in 1973, is Chief Financial Officer of GFWM. 

Previously, he was Principal, Lovell Minnick Partners, LLC. Mr. Miller 

received a Bachelor’s Degree in Economics in 1995 from Pomona College 

and an MBA in Finance from the Wharton School, University of 

Pennsylvania. 

Jane Catherine Lock, born in 1957, is Director of Human Resources of 

GFWM. Previously, she was Director of Human Resources for Whamo, 

Inc. and Howard, Rice, Nemerovski, Canady and Falk, PC. Prior to 

that she was an independent consultant for HR on the Move, a human 

resources consulting firm. 

Investment Management Staff 

Robert J. Bannon, born in 1957, is Senior Vice President, Investments 

of GFWM. Previously, he was Chief Risk Officer for AssetMark Investment 

Services, Inc.from 2007 to 2008, and from 2004 to 2007 

Mr. Bannon was an independent consultant. Prior to that, from 2001 

to 2004, he was CEO of Eureka Investment Advisors. Mr. Bannon 

received a Bachelor’s Degree in Economics in 1980 from Villanova University, 

and a Master’s Degree in Economics in 1983 from the University 

of California, Los Angeles. He also earned his Chartered Financial 

Analyst designation in 1998. 

Timothy B. Knepp, born in 1957, is Chief Investment Officer of Genworth 

Financial Asset Management, a division of GFWM. Previously, 

from January through December 2007 Mr. Knepp was an independent 

consultant. Prior to that, from 2003 to 2006, he was Vice President, 

Director of Manager Research & Due Diligence for Genworth Financial 

Asset Management. Mr. Knepp was a Principal of the Palm Group 

from 1994 to 2002. He received a Bachelor’s Degree in Finance in 

1981 from the University of Maryland, College Park. He also earned 

his Chartered Financial Analyst designation in 1986. 

Zoë Brunson, born in 1972 is Director of Investment Strategies of 

GFWM. Prior to that, she was Director of Investment Strategies, 

for AssetMark Investment Services, Inc. from 2007 – 2008. Prior to 

that, she was Director, Investment Strategy Model Management & 

Fund Selection at Standard & Poor’s Investment Advisory Services 

LLC from 1998 – 2007. Ms. Brunson received a Bachelor’s Degree in 

Business Information Technology from Kingston University, Kingstonupon-Thames, 

UK: She also earned her Chartered Financial Analyst 

designation in 2001. 


Page 21 of 22 


CONFLICTS OF INTEREST AND FINANCIAL INDUSTRY 

AFFILIATES 

BANKING INSTITUTION 

GFWM is under common control with GFTC. GFTC is an Arizona chartered 

trust company that may serve as the custodian for GFWM advisory 

services discussed in this Brochure. 

Clients pay GFTC for custodial services pursuant to their Custody 

Agreement with GFTC. Additionally, pursuant to a contract between 

GFWM and GFTC, GFWM may also pay GFTC for services it provides 

GFWM advisory Clients, especially with regard to GFAM PMA Accounts 

and UMA Accounts. Additionally, GFTC may receive payments 

from mutual fund, mutual fund service providers and other financial 

institutions for services GFTC provides related to investments held in 

Client Accounts. GFTC handles transfer agency functions, shareholder 

servicing, sub-accounting, and tax reporting functions that these 

financial institutions may otherwise have to perform. Such payments 

may be made to GFTC by these financial institutions based on the 

amount of assets GFWM has directed be invested on behalf of Client 

Accounts. GFWM determines whether to initially invest or maintain an 

investment of Client Account assets in these investments. Any such 

payments to the Custodian will not reduce GFWM’s Advisory Fee. 

Some mutual funds, or their service providers, may provide compensation 

in connection with the purchase of shares of the funds, unless 

prohibited by law or self-regulatory organizations. Compensation may 

include financial assistance for conferences, sales or employee training 

programs. Compensation may also be paid for travel and lodging 

expenses for meetings or seminars of a business nature held at various 

locations or gifts of nominal value as permitted by applicable rules 

and regulations. 

INVESTMENT COMPANIES 

AssetMark Funds, Genworth Financial Contra Fund and Genworth 

Variable Insurance Trust 

GFWM receives compensation as the Investment Advisor of the AssetMark 

Funds, which are utilized within certain Investment Solutions. 

When the AssetMark Funds are used in GFWM’s Investment Solutions, 

GFWM waives its GFWM Advisory Fee on the assets in those 

accounts, unless it is in a CMA Investment Solution. GFWM is not 

compensated for management services under two agreements with 

regard to those assets but is compensated only pursuant to its Investment 

Advisory Agreement with the AssetMark Funds. Because of the 

lack of a GFWM Advisory Fee, some Financial Advisors may be inclined 

to charge a higher Financial Advisor Fee for an Account invested 

in the AssetMark Funds than they might for an Account invested in 

other Investment Solutions. With regard to a CMA Investment Solution, 

if the Discretionary or Overlay Manager selects an AssetMark 

Fund, GFWM may receive an Advisory Fee from client assets for its 

management under the CMA Investment Solution as well as an additional 

fee through the AssetMark Fund for that portion of a client’s 

account that is invested in the Fund, effectively receiving two fees, 

under two different management agreements, on the same assets. 

GFWM serves as the investment advisor the Genworth Financial Contra 

Fund, a registered investment company used by the GFAM division 

of GFWM in risk mitigation strategies in some Investment Solutions, 

and is the investment advisor to the Genworth Variable Insurance Trust 

(“GVIT”), a series of no-load funds made available exclusively to owners 

of variable annuity and variable life insurance contracts (“Variable 

Contracts”) issued by Genworth Life and Annuity Insurance Company 

(“GLAIC”) and Genworth Life Insurance Company of New York 

(“GLICNY”), both affiliates of GFWM. GFWM receives ongoing fees 

R273-SchH-Ref (2010/04)

from the AssetMark Funds, the Contra Fund and GVIT for the investment 

advisory services it provides. When the Contra Fund is used in 

GFWM’s Investment Solutions, GFWM may receive an Advisory Fee 

from client assets for its management under an Investment Solution 

as well as an additional fee through the Contra Fund for that portion 

of a client’s account that is invested in that Fund, effectively receiving 

two fees, under two different management agreements, on the same 

assets. 

GLAIC is also the issuer of the LifeHarbor SM Series, AssetMark Group 

Guaranteed Income Annuity Certificate (“LifeHarbor”). LifeHarbor is 

an annuity certificate that may generally be added to any GFWM Risk/ 

Return Profile 3 or 4 Mutual Fund or ETF portfolios that is offered by 

Financial Advisory Firms through the Platform. However, some exceptions 

do exist. Consult LifeHarbor materials for further information. 

Once added, a client receives a group annuity certificate that will guarantee 

income for life beginning at age 65, so long as the client adheres 

to the withdrawal limits indicated in the Annuity certificate. GLAIC 

receives fees for LifeHarbor in the form of an asset charge (“Asset 

Charge”), which is based on the value of the assets in a client’s account. 

GFWM does not receive any additional fees for the addition of 

LifeHarbor to an account. 

OTHER INVESTMENT ADVISERS 

GFWM’s ultimate parent, Genworth Financial, Inc., also indirectly 

owns Genworth Financial Advisers Corp. (“GFAC”), an investment 

adviser registered with the Securities and Exchange Commission. Advisory 

representatives of GFAC may refer Clients to GFWM and GFAC 

receives payment from GFWM for Client referrals as discussed below 

under “CLIENT REFERRALS.” 

BROKER-DEALERS 

Capital Brokerage Corporation 

Capital Brokerage Corporation (“CBC”) is a member broker dealer of 

the Financial Industry Regulatory Authority (FINRA), and is affiliated 

with GFWM by common ownership. CBC is the Distributor of the AssetMark 

Funds, Contra Fund, and GVIT. CBC is not compensated for 

its role as Distributor of the Contra Fund, but CBC is entitled to receive 

12b-1 fee compensation as Distributor of the AssetMark Funds and 

GVIT. The AssetMark Funds and the Contra Fund are utilized within 

certain Investment Solutions. 

Genworth Financial Securities Corporation 

In addition to the compensation payable under the IMSA, GFWM may 

pay compensation from its general revenues to certain Financial Advi- 


Page 22 of 22 


sory Firms, whose representatives act as Financial Advisors and refer 

Clients to GFWM, and/or to those Financial Advisors. Payment of such 

compensation will not directly increase the fees payable under the 

IMSA. 

Under GFWM’s Gold/Platinum Premier Consultant Program, Financial 

Advisors are entitled to receive a quarterly business development allowance 

for reimbursement of qualified marketing/practice development 

expenses incurred by the Financial Advisor. These amounts 

range from $5,000 to $105,000 annually, depending on the value of the 

Account assets of Clients referred to GFWM by the Financial Advisor. 

Additionally, GFWM provides opportunities for Financial Advisory 

Firms to receive compensation and/or allowances in amounts ranging 

from a percentage of the value of Account assets of Clients referred to 

GFWM by Financial Advisors associated with that firm to a percentage 

of the value of new assets invested in such Accounts during a certain 

time period, invested through the Platform. These arrangements are 

entered into between GFWM and the Financial Advisory Firm on an 

individually negotiated basis. A Financial Advisory Firm may agree to 

provide GFWM with introductions to and information concerning its 

representatives, provide the representatives with information concerning 

GFWM’s advisory services, and permit GFWM to participate 

in meetings and workshops. In addition to the compensation and/ 

or allowances granted the Financial Advisory Firm by GFWM, GFWM 

may agree to provide the Financial Advisory Firm or its representatives 

with organizational consulting, education, training and marketing 

support. 

GFWM may sponsor annual conferences for participating Financial 

Advisory Firm and/or Financial Advisors designed to facilitate and 

promote the success of the Financial Advisory Firm and/or Financial 

Advisor and/or GFWM advisory services. GFWM may offer Portfolio 

Strategists, Investment Managers and Investment Management 

Firms, who may also be Sub-Advisors for the AssetMark Funds, the 

opportunity to contribute to the costs of GFWM’s annual conference 

and be identified as a sponsor of a portion of the conference. GFWM 

may also bear the cost of airfare for certain Financial Advisors to attend 

GFWM’s annual conference or to conduct due diligence visits 

to GFWM’s offices. Financial Advisors may also receive discounted 

pricing on affiliate coaching programs. In addition, GFWM may, from 

time to time, contribute to the costs incurred by participating Financial 

Advisory Firms in connection with conferences or other Client events 

conducted by the Financial Advisory Firms and their Financial Advisor 

representatives. These payments will not directly increase the fee payable 

under the IMSA. 

Genworth Financial Securities Corporation (“GFSC”) is a member broker 

dealer of FINRA, and is affiliated with GFWM by common ownership. 

GFSC previously had a Selling Agreement with GFWM, but 

referrals by Financial Advisors associated with a GFWM affiliate are 

now made under GFWM’s Selling Agreement with GFAC, discussed 

above. 

CLIENT REFERRALS 

Financial Advisory Firms, which are registered as investment advisers 

and/or broker-dealers or exempt from such registration, receive fees 

for their services and compensation from GFWM for referrals of Clients, 

as described previously in the Fees section under Initial Consulting 

Fee and Financial Advisor Fee. 

OTHER RELATIONSHIPS AND COMPENSATION 

R273-SchH-Ref (2010/04)

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