The information that follows is important information for any customer or potential customer of Foresters Financial Services, Inc.
Master Account Agreement Terms and Conditions (and Other Important Information)
This document is incorporated into and a part of the Master Account Agreement that a new customer signs when opening an account. This document and the Master Account Agreement are described herein collectively as the “Master Account Agreement” or “Agreement.” Please read this document and keep it with your important records. It defines the terms and conditions which govern our respective responsibilities with respect to your overall Master Account and each of the underlying securities and variable products that we may offer to you or service for you. Because the variable life and variable annuity products that we offer are considered securities under the federal securities laws they are covered by this Agreement and the terms “securities” and “securities products” cover any variable life and variable annuities that we may offer or sell to you. This Agreement also covers any brokerage account associated with an investment advisory relationship with any of our affiliates unless otherwise indicated. By contrast, this Agreement does not apply to any traditional (i.e., non-variable) insurance or fixed annuity products that we may offer or sell to you. At the end of this document, you will find other important information about our business practices and policies.
- Purpose and Scope of the Master Account Agreement.
Foresters Financial Services, Inc. is a broker-dealer that serves as the principal underwriter of its proprietary family of mutual funds and variable insurance products (the First Investors mutual funds and variable insurance products). We attempt to help our customers achieve their financial goals by recommending appropriate mutual funds and variable insurance products from within our own product line. We also have agreements to sell a variety of non-proprietary products (“outside products”) as an accommodation to customers who wish to purchase such products. As a matter of practice, we generally do not hold our customers’ mutual funds and variable insurance products in a traditional brokerage account. We register them directly in the names of the customers with the issuers or product vendors. This enables our customers to communicate directly with issuers and sponsors and to take advantage of services that they offer.
This Master Account Agreement establishes a customer relationship between you and Foresters Financial Services, Inc. in its capacity as a broker-dealer. The terms and conditions set forth herein apply to the securities products and services that are furnished to you by Foresters Financial Services, Inc., whether or not they involve proprietary or non-proprietary securities products. Additional applications may be required for a particular product you purchase through us. For example, an additional application must be completed if you wish to open a general securities account through us. We offer general securities services through an unaffiliated clearing firm as an accommodation to customers who wish to buy or sell individual stocks and bonds. We do not offer research or security-specific advice or recommendations concerning individual stocks, bonds, or other general securities. The general securities application governs activity in a general securities account to the extent its terms and conditions differ from those in this Agreement.
We have found that most of our individual customers prefer the simplicity of having one customer agreement covering both their retirement and non-retirement accounts. Therefore, if you are opening an individual customer account, your Master Account Agreement is designed to cover both your individual retirement and non-retirement accounts. If you would like to have different risk profiles or investment objectives for your retirement and non-retirement accounts, you must complete a separate Master Account Agreement for each account. If you are establishing both an individual and a joint account, you will have to complete an additional Master Account Agreement for the joint account since it constitutes a separate relationship.
The following definitions apply to the terms used in this Agreement, unless the context otherwise requires.
a. The terms “we” “us” and “our” refer to Foresters Financial Services, Inc., its officers, directors, employees, representatives, and agents, and to our affiliates (including, but not limited to, the First Investors Funds, Foresters Investor Services, Inc., Foresters Investment Management Company, Inc., Foresters Life Insurance and Annuity Company and Foresters Advisory Services, LLC), and their officers, directors, employees, representatives, and agents.
b. If you are opening an individual account, the terms “you” and “your” refer to the person who is opening the account. If you are opening a joint account, “you” and “your” refer to each of the joint tenants on the account. If you are opening an account for a legal entity, such as a corporation, partnership, or trust, to the extent applicable and depending upon the context in which they are used “you” and “your” refer to the entity, the beneficial owner or owners of the entity, any individual or individuals identified as having significant responsibility to control, manage or direct the entity, and the person or persons who are acting on behalf of the entity in opening the account. If you are opening an account or being added as an authorized person to an account for a person who lacks legal capacity, such as a minor or for an entity that is not a legal person, such as a civic club, to the extent applicable and depending on the context in which they are used “you” and “your” refer to the person who is opening or being added to the account.
c. “Customer” refers to the person, group of persons, or entity specified as the customer in the Master Account Agreement.
d. “Master Account” refers to all securities products that are purchased from us or serviced by us for the same customer.
e. The term “Representative” refers to the Foresters Financial Registered Representative who is assigned to a customer’s account.
f. The term “security” or “securities” refers to any proprietary or non-proprietary mutual funds, variable annuity contracts, variable life insurance policies, 529 college savings plans or other securities.
g. The term “account” may, depending on the context, refer to your overall Master Account or to an individual account that is established by a mutual fund transfer agent or insurance company in connection with a security purchased by you as a customer.
h. The term “product vendor” refers to the issuer or sponsor of any proprietary or non-proprietary retirement account, mutual fund, variable annuity contract, variable life insurance policy, or any other type of security that we offer or service.
i. “UGMA” and “UTMA” refer to the Uniform Gifts to Minors Act and Uniform Transfers to Minors Act, respectively.
j. In defining your investment objectives, “Growth” means the investment objective of increasing the value of your securities (e.g., capital appreciation); “Income” means the investment objective of receiving income generated by your investment, primarily through interest payments and dividends; and “Tax Reduction” means the investment objective of reducing or deferring taxes through investments that are tax-exempt or tax-deferred.
k. In defining your financial profile, “Net Worth” means your total assets minus your total liabilities, “Liquid Net Worth” means your Net Worth minus the net value of your principal residence and other assets that cannot be readily sold, “Annual Income” means the income you receive from all sources during a year, and “Marginal Tax Rate” means the federal tax rate that is paid on the last dollar of income that you earn. “Liquidity Needs” means whether or not you have a need to access the cash value of the investment in the foreseeable future.
- Our Respective Responsibilities.
We agree to serve as your broker-dealer and to maintain a customer account for you on our books. Subject to our acceptance of an order from you, we agree to buy, sell, or otherwise dispose of securities and variable products for you according to your instructions. Foresters Financial Services, Inc. cannot exercise discretion over your securities; nor can your Representative exercise discretion over your account. We must obtain your prior consent, in oral, written or other form, before effecting any transaction for you (except in limited circumstances where your consent is not required by law or it is implied).
We assume responsibility for ensuring that all securities recommendations that we make for you are suitable taking into consideration your particular customer profile. We use the information that you provide in the “Suitability” section of your Agreement (and any updates thereto that you may provide) in making our recommendations. If you have not prioritized your “Investment Objectives,” we will assume that you consider them of equal importance. We further note that we use the risk tolerance percentages in each customer’s risk profile as tools to gauge the customer's overall tolerance for risk (i.e., to ensure that the customer is not taking on more risk than is appropriate). They are not designed to ensure that the customer's investments are allocated precisely to the different categories: conservative, moderate, or aggressive. “Financial Information” for an individual customer may reflect the “household” income and net worth of the individual and his or her spouse. If you are opening a joint account, we will assume that your “Financial Information” reflects the aggregate assets and income of the joint tenants and the “Risk Profile” and “Investment Objectives” reflect those of the joint account. If you are opening a UTMA, UGMA, conservatorship, or guardianship account, we will assume that the “Financial Information,” “Risk Profile” and “Investment Objectives” reflect those of the minor or ward, and the “Investment Experience” reflects that of the custodian, conservator, or guardian. If you are opening a trust account, we will assume that the “Investment Experience” reflects that of the trustee(s) and the “Financial Information,” “Risk Profile” and “Investment Objectives” reflect those of the trust.
You understand that the mutual funds and variable insurance products that are sold by us are long term investments and that you should have a minimum time horizon of at least 3 years for any investment that you make in a mutual fund, other than a money market fund, and at least 10 years for any investment in a variable insurance product. You understand that you may incur deferred sales charges or surrender charges if you redeem investments in certain classes of mutual funds and variable products prior to certain holding periods. These periods are described in the prospectus for the mutual fund or variable product. You also understand that investments in retirement products, such as IRAs and 403(b) plans, and variable annuities should also be held until age 59 ½ and that such investments generally cannot be redeemed prior to that age without tax penalties. You represent that you have no foreseeable Liquidity Needs that would require you to prematurely liquidate an investment that you make prior to your intended holding period.
Your Master Account will be assigned to a Representative(s) for ongoing servicing as long as you want a Representative(s) on your Master Account. Initially, your Representative(s) will be the Representative(s) who establishes your Master Account. In certain circumstances, your Master Account may be serviced by more than one Representative. We encourage you to schedule a service call with your assigned Representative on at least an annual basis. This will allow your Representative to review your customer profile and financial circumstances, and determine if additional recommendations or changes are appropriate for you. It is your responsibility to notify us if your financial circumstances or your investment objectives change in between service calls. You acknowledge that Foresters Financial Services, Inc. does not have any duty to monitor your securities or variable insurance holdings or make recommendations to you between service calls.
You agree that you also have certain responsibilities as a customer of Foresters Financial Services, Inc., including the following: ensuring the accuracy of all information, representations, and instructions that you provide to us; maintaining the security of your account confirmations and statements, your account numbers, your social security or taxpayer identification number, and any password that you receive or establish for purposes of gaining access to your accounts; reading the prospectus for each mutual fund, variable annuity, or variable life insurance product that you invest in through us to ensure that you understand its principal objectives, policies, principal risks and the applicable sales charges and fees; monitoring your accounts to ensure that all transactions have been effected properly, there is no suspicious activity, and you are receiving transaction confirmations, account statements, and other expected communications; and notifying us any time there is an error or discrepancy in your account statements or a material change in your financial circumstances, investment objectives, or the information or instructions you have provided to us. You also represent that no person has any interest in your account other than you and any other person whose identity is revealed in your Agreement and accompanying applications (if any).
4. Instructions and Confirmations.
a. Transactions Effected by You through Us
All Accounts. We are authorized to accept instructions from you or your assigned Representative in written, oral or such other form as we may permit, including but not limited to instructions concerning any securities product to be purchased or sold for you, the amount, the class of shares, the registration of the account, your intention to purchase under a statement or letter of intent, and a change of address. Because your investments in our proprietary mutual funds (“funds”) and variable insurance products are registered directly in your name, you can communicate your instructions directly to our funds through their transfer agent and to our insurance company affiliate at its home office. Our funds offer telephone privileges that enable shareholders to make redemptions and exchanges by calling the funds directly through their transfer agent. Telephone privileges are automatically available to most shareholders. It is your responsibility to decline telephone privileges with the First Investors funds if you do not want them. If you decline telephone privileges with our funds, you will still be able to call your Representative (or his or her supervisor) to place purchase, redemption or exchange orders and we will still be authorized to accept such telephone instructions from you through your Representative as long as you have a Representative on your account. If you do not want us to accept telephone instructions from you directly or indirectly through your Representative, you must provide us with specific written instructions to restrict your account. If we agree to administer your account on such a restricted basis, we will treat your account as a “restricted account” and only accept written instructions that are signed by you. You should be aware that this could significantly delay your ability to effect transactions, result in losses, and increase your costs. For our protection, we reserve the right (but have no obligation) to require that instructions for any transaction be in writing, signed by all owners, and signature guaranteed.
Regardless of how you communicate your instructions to us, you will receive a confirmation for any securities transaction that we execute on your behalf. Transactions in mutual funds are generally confirmed within three business days. However, certain routine transactions, such as systematic investments, systematic redemptions, and dividend or capital gains re-investments may be confirmed quarterly. We are authorized to rely on mutual funds and other product vendors to send such confirmations and statements to you. As long as confirmations and statements are sent to you at the physical or electronic address of record given on your Agreement, or to any other address given to us by you or an authorized person on your behalf, they are legally presumed to have been delivered to you, whether you have actually received them or not. In addition, confirmations and statements are legally presumed to be accurate unless you specifically tell us otherwise. It is your responsibility to review each confirmation and statement carefully to ensure that all transactions in your accounts are authorized, that your instructions have been followed correctly, and there are no errors or omissions. If you fail to notify us of any errors or omissions within 30 days of the date of a confirmation or statement, you agree that you may not later assert that you did not authorize any transaction reported in it, that it omitted any transaction, or that it was otherwise inaccurate.
Joint Accounts. If you open a joint account, we are authorized to accept instructions, in written, oral, or other form as the product vendor and we may permit, from any one of the joint tenants with respect to your Master Account and any of your underlying joint securities products. This applies to any type of joint account, including but not limited to a joint tenancy with rights of survivorship, a tenancy by the entirety, and a tenancy in common. Each owner may therefore act as if he or she were the sole owner of the Master Account, and any underlying joint securities products, without any requirement to notify the other joint tenant(s). For example, any one joint tenant of a joint mutual fund account can write checks, buy and sell shares of the fund, withdraw funds, transfer funds or ownership of shares, arrange for account statements to be sent only to him or her or a designated third party, or change the account’s features and services. In addition, the principle of “notice to one is notice to all” applies. Thus, to the full extent permitted by law, we are legally considered to have fulfilled our obligations to all joint tenants if we fulfill them with respect to just one joint tenant. For example, we may send confirmation statements to just one joint tenant. We have no obligation to question the purpose or propriety of any instruction of a joint tenant or to let other joint tenants know about any changes a joint tenant has made to the account (except as expressly required by law). Therefore, each joint tenant is responsible for any actions and any losses that are caused by any other joint tenant. If you do not want us to administer your account in this manner, you must ask us in writing to restrict your account as described above in “All Accounts.” Each joint tenant shall also be liable, jointly and individually, for any fees or charges that are due to us and/or the product vendor relating to the account.
It is your obligation to specify the type of joint account that you want to establish and to verify that it is valid in your state. The laws governing joint or community property vary by state of residence. You may want to consult a lawyer about your registration choice. For joint tenants with rights of survivorship and tenants by the entirety, on the death of an account owner the entire interest in the account generally goes to the surviving account owner(s). For tenants in common, a deceased account owner’s interest generally goes to that account owner’s estate. Tenants in common are responsible for maintaining records of the percentages of their ownership in the account. Irrespective of the type of joint account that you select, each joint tenant is responsible for notifying us immediately of the death of any other joint tenant. You agree that we are not liable for any transactions, payments, or distributions that we process prior to our receipt of such notice (as long as any one joint tenant has authorized the transaction). When we are notified of the death of a tenant in common, we may require that any subsequent transaction in the account be approved by his or her legal representative.
Accounts Established for Trusts, Partnerships, Corporations and Other Entities. If you are opening an account for a trust, partnership, corporation, or other legal entity, we are authorized to accept instructions, in written, oral or such other form as we may permit, with respect to the Master Account or any of the underlying securities, from any of the persons designated in your Agreement and/or related forms as having authority over your account. You represent that you are authorized to open the account for the entity, that the entity is authorized to invest in the securities products that you are purchasing through us, and that any one of the persons listed in your Agreement is authorized to provide us with instructions of any type without limitation, including instructions to redeem or transfer the Master Account and the underlying securities to other persons. We have no responsibility for reviewing trusts, partnership agreements, articles of incorporation, by-laws or similar documents, whether provided to us or not, to verify the accuracy of your representations. We may send confirmations, statements and other required information to any one of the authorized persons at the address of record for the account. We have no obligation to question the purpose or propriety of any instruction of any authorized person or to let other authorized persons know about any transactions or changes that have been made to the account. If you do not want us to administer your account in this manner, you must ask us in writing to restrict your account as described above in “All Accounts.”
Custodial Accounts. For accounts opened under a UGMA or a UTMA, you agree that all assets belong to the minor and that you will only use them for the minor’s benefit – even after the assets have been removed from the account. We have no obligation to monitor your instructions concerning the account or how you use the assets held in the account. In addition, you consent to re-registering the account in the name of the minor once the minor reaches the age at which the custodianship ends.
b. Transactions Effected by You Directly with Outside Product Vendors
Because we generally register the ownership of each of your mutual fund and variable insurance products directly in your name with the product vendor, you may be able to effect transactions yourself directly with a product vendor by writing to it or calling its service center. For example, you may be able to make redemptions from a First Investors fund account or a non-proprietary fund account that we service by contacting the fund or its transfer agent directly and providing written or oral instructions. We are not responsible for transactions that are effected by you directly with any product vendor. The product vendor may also disclaim any liability for transactions that are effected directly by a shareholder or owner. For example, mutual funds typically disclaim any liability for accepting telephone exchange or redemption instructions that they reasonably believe to be genuine as long as they follow reasonable verification procedures that are disclosed in their prospectuses.
c. Beneficiary Designations
Because we do not hold your mutual fund or variable insurance products in a brokerage account, you generally must make a designation of beneficiaries for each securities product that offers such a feature. This creates additional flexibility for you and enables you to have different beneficiaries for different products. Beneficiary designations must generally be made in writing and are not effective until they are received in good order by the product vendors or their custodians. It is your responsibility to ensure that product vendors and their custodians have received your beneficiary designations and that they have sufficient information to identify your designated beneficiaries. You are also responsible for ensuring that your beneficiary designations remain current and that product vendors or their custodians receive any updates to your beneficiary designations. You are also responsible for ensuring that your beneficiary designation(s) complies at all times with applicable state law and federal laws, as well as any court order. You are also responsible for periodically reviewing and, if necessary, updating your beneficiary designation(s) as your circumstances change.
5. Fees and Charges.
The fees and charges that you will pay when you purchase, redeem or surrender any mutual fund or variable insurance product from us are set forth in the corresponding prospectus, offering statement, policy or contract for the product. Such fees may include the applicable sales charge, Rule 12b-1 fee (if any), management fee charged by the investment adviser in the case of a mutual fund, variable insurance, investment advisory product, custodial fee, low balance fee and insurance-related fees and charges in the case of a variable insurance product. We generally make more money by selling our own proprietary mutual fund and variable insurance products than we do by selling those of other companies. For more information on our training and compensation policies, see the heading “Our Training and Compensation Policies” at the end of this document under “Other Important Information.” We reserve the right to change our training and compensation policies at any time. We will provide current information about such policies on our website or upon request.
You should be aware that each fund group sets its own sales charge rate and Rule 12b-1 fee structure, and certain classes may only be available to certain types of investors. Fund groups may also offer different classes of shares, each with its own sales charge and cost structure. Most funds also offer to waive sales charges in certain situations, to provide sales charge discounts on large investments, and to offer discounts through rights of accumulation (“ROAs”) and statements or letters of intention (“SOIs” or “LOIs”). An SOI or LOI is a non-binding commitment to purchase a sufficient amount of shares to reach a discount level over a period of time. Funds may also count purchases made by certain groups of investors towards achievement of a sales charge discount level, an ROA, an SOI or an LOI. The waiver and discount policies of funds generally vary from fund group to fund group. The policies of a particular fund are set forth in its prospectus. If you are planning to invest in a fund and you are aware that a relative or a person who lives with you at your address of record has an investment in the same fund or fund family, you should ensure that your Representative is aware of this fact. Your Representative may be able to obtain a sales charge discount for you based on the information. If you elect to invest through an SOI or LOI, you authorize us to accept instructions from you or your assigned Representative, in written or oral form, to enter into an SOI or LOI on your behalf. To the extent that your SOI or LOI includes purchases made by other eligible shareholders, you represent that you control their accounts or that such other parties have agreed to the terms of the SOI or LOI. If you open a general securities account which is maintained by our unaffiliated clearing firm, the commissions, fees, charges and other relevant information relating to that account will be provided to you at the time the account is established.
6. Other Policies.
a. Anti-Money Laundering/USA PATRIOT Act Compliance. We are required by the USA PATRIOT Act and related regulations to ensure that we have obtained and verified certain information about you, including, but not limited to, your name, residential street address, date of birth (in the case of a natural person), social security or taxpayer identification number, citizenship status, and other information that will allow us to verify your identity. We may also ask to see your driver’s license or other identifying documents. Thus, before we can establish an account for you, we must review your Agreement and determine that it contains all of the required information. We are also required by the USA PATRIOT Act and related regulations to verify your identity within a reasonable time before or after opening your securities account, which we do using documentary evidence, and/or information obtained from a consumer reporting agency, public database or other source. If we cannot verify your identity, we may prohibit you from making additional investments or redeem those that you have made. Alternatively, we may decline to open certain types of accounts or act on certain instructions regarding existing accounts until we verify your identity. Like other financial institutions, we are also subject to anti-money laundering regulations that require us to monitor transactions and accounts for suspicious activities and to file reports with the U.S. government if any are detected.
b. Product Vendor Applications and Policies. You may be required by the policies of a product vendor to complete a written application before you can make certain types of investments with us. For example, you will generally be required to complete a written application to establish a retirement account. This may be in the form of a separate written application or as part of the application booklet that you sign when you open your Master Account. The product application and related agreements or documents (e.g., the custodial agreement in the case of an Individual Retirement Account) may contain policies and procedures that govern that particular product. These policies and procedures may include requirements that you provide written instructions to the product vendor for certain or all types of transactions. Furthermore, product vendors generally have policies and procedures that are described in a prospectus or statement of additional information. One product vendor’s policies will not govern investments that you make through us with another product vendor.
c. Householding of Disclosure Documents, Confirmations and Statements. It is the policy of the First Investors funds to mail only one copy of a fund’s prospectus, annual report, semi-annual report and proxy statements to all shareholders who share the same mailing address and share the same last name and have invested in a fund covered by the same such document. You consent to this policy by signing your Master Account Agreement. You may revoke your consent at any time by requesting that separate copies of such documents be mailed to you. In such case, you will begin to receive your own copies within 30 days after our receipt of your revocation. It is the policy of the First Investors funds to mail confirmations and account statements separately to each shareholder who shares the same mailing address. The funds will, however, mail quarterly statements for different shareholders who share the same mailing address in one envelope if each shareholder consents to this procedure. We are not responsible for any losses that result from your use of this procedure. You may revoke your consent to our householding policies and/or request that separate copies of these disclosure documents be mailed to you by contacting us at the number or address listed below under “How to Contact Us.”
d. Credit and Debit Balances. We generally do not maintain credit balances for our customers. However, occasionally, a credit balance in your favor may be created because there is a difference between the amount of money that you pay to us and the amount we need to settle a transaction in your account. This amount is reflected on our books but is not segregated from our other assets and may be used in our business. Any balance held on your behalf will be returned to you on demand. We have the right to use the assets you have invested with us to satisfy any debt or balance that you owe to us.
e. Telephone Consent. You agree that for as long as you remain a customer of Foresters Financial Services, Inc., a shareholder of a First Investors fund, or an owner of a Foresters Life Insurance and Annuity Company policy or variable annuity, we may call you via any telephone number that you provide to us, even if the number is listed on a national, state, or local “do-not-call" list. You may revoke this consent by contacting us and asking that your telephone number be placed on our firm’s do-not-call list.
f. Authority to Record Conversations. We may record telephone conversations with our customers to ensure that we are accurately following their instructions and to verify that the instructions are genuine. You consent to this procedure.
7. Limitations on Our Liability.
While we strive to ensure the quality and reliability of our products and services, we are not willing to assume liability for losses that are out of our control, are caused by your failure to satisfy your responsibilities under this Agreement, or are the result of the application of our normal policies and procedures. Accordingly, you agree that we are not responsible for any losses (including damages, investment losses, lost investment opportunities, costs, charges, attorneys’ fees, taxes, tax penalties, or other fees and expenses) that you may incur as a result of any of the following:
- A delay in executing your instructions that results from the fact that your instructions are not in good order;
- Actions taken by us in reliance on any information, representations, or instructions that you, or any authorized person on your behalf, may have provided to us that are inaccurate or stale;
- Our acceptance of instructions that are provided to us orally or in writing by any single joint tenant on a joint account or any single authorized person on an account established for an entity (unless you have instructed us in writing not to accept instructions from any one joint tenant or authorized person and we have agreed to administer your account on such a restricted basis);
- Distribution decisions upon your death that are attributable to your failure to name a beneficiary, your failure to provide sufficient information to identify your intended beneficiary, your failure to update a beneficiary designation as your circumstances change, or, if you have named a trust as a beneficiary, your failure to create the trust, provide a copy of the trust, or to properly identify a beneficiary of the trust;
- The acceptance of telephone exchange or redemption instructions by the First Investors funds (via their transfer agent) from someone who represents that he or she is you or an authorized person with respect to your account, provided that the funds believe such instructions are genuine and that they have followed reasonable procedures, as described in their prospectuses or statements of additional information, for verifying the identity of the caller to ensure that the instructions are genuine;
- Redemptions or surrenders that are caused by your failure to safeguard your account information, social security number, or any password that we furnish to you to access your accounts;
- Redemptions, dividends, distributions, or surrenders that are deposited into a bank account that you individually or jointly own or control or a bank account that you have pre-designated in an application or form as a proper account for deposits of monies from such transactions;
- Redemptions, transfers, surrenders, or restrictions that we may decide to make or impose because we cannot verify your identity as required by the USA PATRIOT Act and related rules or because of other regulatory or legal requirements;
- Your failure to review your account statements and confirmations carefully, or to notify us of any error within 30 days of the date of such statements or confirmations;
- A forfeiture of any securities product, cash, or other asset in any of your accounts to any state in accordance with the state’s abandoned or unclaimed property laws, provided we have complied with the requirements of such laws; and
- Circumstances, occurrences, events or forces that are beyond our control, such as wars, earthquakes, power outages, unusual weather conditions, natural disasters, the unavailability of telephone or telecommunications systems, computer systems failures, market closings, and government restrictions on travel.
You agree on behalf of yourself, any person or entity that you represent and your co-owners, successors, assigns, heirs, beneficiaries, estate and legal representatives that you will indemnify us and our successors and assigns and hold us harmless from any and all claims for losses that result from your failure to satisfy your responsibilities as specified in this Agreement.
9. Pre-Dispute Arbitration Notice.
This Agreement contains a pre-dispute arbitration clause, which is located in paragraph 10 below. By signing an arbitration agreement the parties agree as follows:
- 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.
- Arbitration awards are generally final and binding; a party’s ability to have a court reverse or modify an arbitration award is very limited.
- The ability of the parties to obtain documents, witness statements and other discovery is generally more limited in arbitration than in court proceedings.
- The arbitrators do not have to explain the reason(s) for their award unless, in an eligible case, a joint request for an explained decision has been submitted by all parties to the panel at least 20 days prior to the first scheduled hearing date.
- The panel of arbitrators will typically include a minority of arbitrators who were, or are, affiliated with the securities industry.
- 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.
- The rules of the arbitration forum in which the claim is filed, and any amendments thereto, shall be incorporated into this agreement.
10. Pre-Dispute Arbitration Clause.
You agree to submit to binding arbitration any claim of any nature whatsoever (including any claim for damages, equitable relief, declarative relief or any other form of relief) that you may have against us, irrespective of the nature of the claim, whether it arises from events that occur before or after the date that you sign your Master Account Agreement, whether it involves proprietary or non-proprietary securities products or services, and whether or not it involves investments, variable insurance, or general brokerage services. Your agreement to arbitrate covers not only any claim against Foresters Financial Services, Inc. but also any claim against our parent company, our corporate affiliates, the First Investors funds, the transfer agent of the funds, and our and their respective officers, directors, employees, agents, and representatives. You also agree to submit to binding arbitration any controversy or dispute over the arbitrability of any claim. Conversely, we agree to submit to binding arbitration any dispute that we may have with you. Any arbitration between us shall be submitted to, and conducted under the rules of, the Financial Industry Regulatory Authority (“FINRA”), or any successor national securities exchange or organization of which we are a member. If such claim is not eligible for arbitration under FINRA’s rules, or the rules of any successor organization of which we are a member, the claim will be conducted by, and according to the applicable rules of, the American Arbitration Association (or its successor). You agree that this agreement to arbitrate shall be effective upon your signing of your Master Account Agreement, that it shall apply even if your Master Account is not opened or is rejected, and that it shall survive the termination of your relationship with Foresters Financial Services, Inc., the redemption or surrender of any investments that we offer or service, and the transfer of any investment or account to another broker-dealer. This agreement to arbitrate shall also be binding upon and inure to the benefit of your and our successors and assigns, your and our legal representatives, and any other parties claiming to have a legal interest in the subject of any investment or account that is covered by your Master Account Agreement.
No person shall bring a putative or certified class action to arbitration, nor seek to enforce any pre-dispute arbitration agreement against any person who has initiated in court a putative class action or who is a member of a putative class who has not opted out of the class with respect to any claims encompassed by the putative class action until: (i) the class certification is denied; or (ii) the class is decertified; or (iii) the customer is excluded from the class by the court. Such forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any rights under this agreement except to the extent stated herein.
11. Amendments and Other Agreements.
This Agreement supersedes any prior agreement that you may have entered as a customer of Foresters Financial Services, Inc. We reserve the right to amend this Agreement without your prior consent to the full extent permitted by law. This Agreement may only be amended in writing. Notwithstanding, to the extent you establish a brokerage account with Foresters Financial Services, Inc. in connection with your participation in a wrap fee program or any other investment advisory services available through our affiliated investment advisers including, Foresters Advisory Services, LLC, the applicable advisory account agreement and adviser’s Form ADV will control in the event of any conflicts with this Agreement.
12. Successors, Assigns, and Legal Representatives.
This Agreement shall inure to the benefit of our successors and assigns, whether by merger, consolidation, or otherwise. It will also be binding on your executors, administrators, heirs, beneficiaries, successors, assigns, and your and their legal representatives.
13. Conflict with Applicable Laws.
If any provision of this Agreement is found to be in conflict with any applicable law, rule, or regulation, whether currently existing or created in the future, that provision will be enforced to the maximum extent allowable, or made to conform, as the case may be. The remainder of this Agreement will remain fully in effect.
14. Effective Date and Survival of this Agreement.
This Agreement is effective when you sign your Master Account Application, whether or not we approve the opening of your account or whether or not you invest in any products through us. It shall survive the termination of your customer relationship with Foresters Financial Services, Inc., the total redemption or surrender of all securities products acquired while a customer of Foresters Financial Services, Inc., the termination of all services provided by us, and a change of representatives on your accounts. In the event that you change your agent or dealer on any securities products that we offer from Foresters Financial Services, Inc. to another financial institution, you will be required to process transactions through your agent or dealer in accordance with its requirements. However, as long as your First Investors mutual funds or variable insurance products continue to be registered with us directly in your name, we are authorized to accept telephone, written, and other instructions directly from you in accordance with the terms of this Agreement. The requirements of any product applications that you have signed will also continue to govern such products to the extent they remain applicable. We may also continue to rely on instructions that you have previously provided to us unless and until they are modified by you or your new firm.
15. Governing Law.
This Agreement shall be governed by and construed in accordance with New York law.
Other Important Information
The following notices are intended to provide customers of Foresters Financial Services, Inc. with additional information about the practices and policies of Foresters Financial Services, Inc. and its affiliates. These notices are subject to change. You may obtain a current version of any of these notices by visiting us at www.foresters.com and clicking on “Legal Notices” at the bottom of the page or by calling or writing to us at the number or address listed below in “How to Contact Us.”
Our Training and Compensation Policies. Foresters Financial Services, Inc. is a broker-dealer that serves as the principal underwriter of its own family of mutual funds and variable life insurance products. We have been in the business of helping investors since 1930. We still do business the old-fashioned way. Our Representatives meet with customers in-person, generally in their homes or places of business, develop detailed profiles of their financial situations, investment experience, goals and tolerance for risk, and recommend securities products that are suitable for them.
We focus the training that we provide to our Representatives and Sales Managers on our own family of mutual funds and variable insurance products. The training of our Representatives and Managers centers primarily on developing suitable investment portfolios for our customers based on the proprietary products that we offer. We believe that our own family of funds and variable insurance products is sufficiently diverse to meet the needs of most of our customers. We also know more about our own products and have better supervisory control over them. Although we allow our Representatives to sell a variety of non-proprietary funds, we do so solely as an accommodation to customers who wish to invest outside of our fund family. In most of our offices, non-proprietary funds represent a small percentage of fund business. Indeed, many of our Representatives do very little business in non-proprietary funds.
The compensation that a Representative or Manager earns on the sale of a particular product depends upon a variety of factors, including the type of product, the sales charge rate, whether a breakpoint or discount is available, the class of shares being sold, and the concession that is received by the dealer.
Our Policies Regarding the Sale of Mutual Fund Share Classes. The mutual funds that are sold by Foresters Financial Services, Inc. may have different classes of shares, including shares that are sold with a front-end sales charge (generally called Class A shares), shares that are sold with a contingent deferred sales charge (generally called Class B shares), and shares that have an ongoing, level load that is deducted from the value of the shares (generally called Class C or R shares). Foresters Financial Services, Inc. may also sell other share classes of mutual funds with respect to institutional accounts and investment advisory accounts. Foresters Financial Services, Inc. permits its Representatives to recommend Class A shares, where available because it believes that mutual funds should be purchased for the long-term and Class A shares are appropriate for long-term investors. Foresters Financial Services, Inc. does not permit its Representatives to recommend Class B shares. They may only sell such shares on an unsolicited basis. This policy applies to sales by Foresters Financial Services, Inc. Representatives of Class B shares of all fund companies that offer such shares. It is designed to address regulatory concerns that investors who purchase Class B shares may not be aware that they are, directly or indirectly through a Rule 12b-1 distribution fee, paying a sales charge and that Representatives may have potential conflicts of interest if they have a choice of whether to recommend Class A or Class B shares. Foresters Financial Services, Inc. also does not permit its Representatives to offer or sell Class C or R shares except in limited circumstances (e.g., the customer already owns such shares or they are the only shares that are available). This policy is based on Foresters Financial Services, Inc.'s concern that there is generally no cap or limit on the aggregate amount of sales charges that a long-term investor may pay if he or she purchases Class C or R shares.
We employ physical, electronic and procedural safeguards to protect your information. These safeguards are designed to comply with federal and state laws. At Foresters Financial Services, Inc., we restrict access to personal information to those who require it to develop, support, offer and deliver products to you. We train our associates regarding the proper and secure handling of personal information.
As a general matter, we do not share your personal information with anyone except as required or permitted by law. We share your personal information with both affiliated and unaffiliated companies when it is necessary to process your transactions, service your accounts, or maintain your records. For example, we may share your personal information with: i) unaffiliated service providers that may provide services at our direction (service providers are obligated to keep the personal information we share with them confidential and use it only to provide services specified by Foresters Financial Services, Inc.); ii) government, or regulatory bodies/agencies, as well as law enforcements/authorities; and/or iii) other third parties as required by law with your consent. We do not share personal information about you with unaffiliated third parties for use in marketing their products and services. Nor do we share your personal information with our affiliates for their use in marketing their products and services, except with your consent and as allowed by law.
You may call or write to Foresters Life Insurance and Annuity Company (“FLIAC”), if you have any questions about the medical and other personal information that it may have about you. See “How to Contact Us”. You may also contact FLIAC with any questions about the identity of persons to whom it may have disclosed your information during the last two years. If you wish, you may review this information in person. You may also receive a copy of such information from FLIAC at a nominal charge. You can contact FLIAC in writing if you believe any medical or other information that it maintains should be corrected, changed, or deleted. FLIAC will review your request and will either make the change or explain why it did not do so. If FLIAC does not make the change, you may submit a short written statement describing the disputed information, which will be included in all future disclosures of your information.
Our Business Continuity Plan (“Plan”). We have developed a Plan on how we will respond to events of varying degree and scope that may significantly disrupt our business and operations. Our Plan is designed to allow our firm to resume operations as quickly as possible depending on the scope and severity of the business disruption. Since the timing and impact of a disruption (e.g., power outage, weather-related occurrence, pandemic, etc.) are unpredictable, we will have to be flexible in how we respond to actual events as they occur. If a significant business disruption occurs and you are unable to contact us as you would normally do (i.e., calling our shareholder services number, contacting your local sales offices, etc.), you should visit our website at www.foresters.com.
Our Plan addresses the following: i) how we plan to recover and resume business operations as quickly as possible; ii) how we plan to safeguard your assets and information; iii) how we plan to protect our assets and property; iv) how data backup and recovery will be utilized and handled; v) how we will secure our books and records; vi) accessibility of our mission critical systems and telecommunications; vii) our assessments of financial and operational risks; viii) our alternative means of communications with customers, employees, and regulators; ix) our alternate physical location(s) of associates, critical supplier, contractor, bank and counter-party impact and regulatory reporting; x) how you can continue to conduct transactions; and xi) how we will ensure that you have prompt access to your funds and securities if we are unable to continue our business.
Significant business disruptions can vary in their scope and thus could have an impact on our firm only, a single building housing our firm, the business district where our firm is located, the city where we are located and/or the whole region, and the severity of the disruption can also vary from minimal to severe. In a disruption to only our firm or a building housing our firm, we will transfer our operations to a local site when needed and expect to recover and resume business within 24 hours. In a disruption affecting our business district, city or region, we will transfer our operations to a site outside the affected area, and expect to recover and resume business within 24 hours. In either situation, we plan to continue our business, keep you apprised of the situation and provide information on how you may contact us through our website, www.foresters.com. If the significant business disruption is so severe that it prevents us from remaining in business, we will ensure that you have prompt access to your funds and securities.
Pershing, LLC, our clearing firm for general securities business and brokerage accounts associated with investment advisory relationships with Foresters Advisory Services, LLC only, backs up important records regarding our general securities customers in a geographically separate area. While every emergency situation poses unique problems, such as time of day and severity of the disruption, we have been advised by our clearing firm that its objective is to recover within 4 hours and be able to resume operations (such as complete existing transactions, and accept new transactions and payments) within the same business day. However, you should keep in mind that your orders and requests for these transactions could be delayed during this period.
If you have any questions about our Plan or if you would like a current copy of this notice, you may contact us at, InvestorServices@Foresters.com, call 1-800-423-4026, or visit our website at www.foresters.com.
Our SIPC Membership. Foresters Financial Services, Inc. is a member of the Securities Investor Protection Corporation (“SIPC”). SIPC insurance provides customers of member firms with protection against the risk that such firms may fail. It does not protect customers against the investment risks of securities held at a brokerage firm. For example, it does not provide protection against the risk that mutual funds or variable insurance products purchased from us may decline in value. You may obtain information about SIPC, including a copy of the SIPC brochure, by contacting SIPC. SIPC’s website address is www.sipc.org and its telephone number is 202-371-8300.
Requests for Dealer Changes on Mutual Fund and Variable Insurance Accounts. Foresters Financial Services, Inc. does not hold the mutual funds or other investments of its customers in traditional brokerage accounts (with minor exceptions described below). It registers these products with the issuers and product vendors directly in the names of its customers, rather than placing them in brokerage accounts. This allows our customers to communicate directly with the issuers and product vendors and to take advantage of services that they offer.
The mutual funds that are sold by Foresters Financial Services, Inc. are generally “directly held” with the issuer, however they are eligible for transfer to other broker-dealers via the NSCC’s Automated Customer Account Transfer System (“ACATS”) provided the broker-dealer participates in ACATS. When a customer wishes to change the broker-dealer designation on his or her fund accounts, the customer (directly or through the new firm) must follow its procedures for dealer changes. Non-ACAT transfers is a manual rather than an automated process, and sometimes takes a longer period of time to process as a result. Moreover, dealer changes are limited to firms that have signed agreements authorizing them to sell shares of the particular funds that are being transferred.
In the case of First Investors mutual funds held directly in a customer’s name, a customer can request a dealer change by contacting us at the number or address listed below under “How to Contact Us”. We will provide details concerning our procedures for dealer changes and let you know whether or not your new firm has signed an agreement authorizing it to sell First Investors funds. If your new firm has an agreement to sell our funds, we will promptly process your dealer change request upon receipt of the required information and paperwork in good order. If your new firm does not have a selling agreement with our funds, your new firm may recommend that you redeem your First Investors funds rather than leave them with us. Redeeming your funds may result in costs and taxes for you. Consistent with industry practice, our variable insurance products are not transferable to another firm.
There are several exceptions to the dealer change procedure described above. For example, we do not accept requests for dealer changes on Foresters Financial 403(b) accounts that would result in the transfer of the accounts from Foresters Financial to other broker-dealers. This policy is based on the fact that current 403(b) regulations impose far greater administrative responsibilities on sponsors of 403(b) accounts than prior regulations. Thus, we do not wish to accept responsibility for accounts that are no longer serviced by Foresters Financial Services. Also, if a Foresters Financial Services, Inc. customer wishes to hold individual stocks and bonds, the customer may open a general securities account with us that is carried by an unaffiliated clearing firm. These general securities accounts may also hold mutual fund positions, including, but not limited to, those purchased in connection with an investment advisory relationship with Foresters Advisory Services, LLC. Our clearing firm does participate in ACATS. Therefore, if a customer has such an account, the customer can transfer all ACATS eligible securities in the account, including mutual funds, to another firm via the ACATS system. The customer’s new firm can work directly with our clearing firm to implement the transfer.
Cost Basis Regulation. The U.S. Treasury Department and the Internal Revenue Service (“IRS”) adopted regulations which require cost basis reporting to the IRS on many of the types of investments made available by Foresters Financial. Investment product vendors will rely on a default method of determining average cost unless instructed otherwise by the account owner. For more information, please contact product vendors directly.
How to Contact Us. Our goal is to ensure that every customer is satisfied with the service that he or she receives from us. If you have a question, a need for information or service, or a complaint, please contact us. We recommend that you first contact your Foresters Financial Representative or his or her Manager. However, you can contact us directly by calling 1-800-423-4026 or writing to the following address: Foresters Financial Services, Inc., Raritan Plaza 1, PO Box 7837, Edison, NJ 08818-7837, Attention: Correspondence Department. If you need information or assistance from our insurance company, you can write to it at the following address: Foresters Life Insurance and Annuity Company, Raritan Plaza 1, P.O. Box 7836, Edison, NJ 08818-7836 or call it at 1-800-832-7783.