OneDigital - retirement Plan Investment Management Agreement - 06.01.2026 - SIGNED
Open official source ↗ · Source page 18
OneDigital Page 6 Form ADV, Part 2A OneDigital uses a sub-adviser to make investment allocation decisions and trades in the participants’ accounts, it also pays a portion of the management fee to the sub-adviser. OneDigital’s advisory fee does not include any applicable taxes; confirmation fees for trades; custodial fees; brokerage commissions; transaction fees; charges imposed directly by a mutual fund, index fund, or exchange traded fund (as disclosed on the fund’s prospectus), including embedded investment advisory fees paid to unaffiliated third-party asset managers for management of the fund; and other fees imposed by the plan’s recordkeeper/custodian for securities transactions. The plan’s administrator is required to provide participants with a disclosure of the costs associated with the investment options offered under the plan, pursuant to §404a-(5) of ERISA. Retirement plan clients can decide whether the fees will be paid directly by the plan sponsor or deducted from plan assets and whether fees will be paid in advance or arrears. When OneDigital’s advisory fees are paid from plan assets, it must rely upon the plan’s recordkeeper to collect that fee and the recordkeeper’s policies will determine the amount of applicable assets upon which OneDigital’s fee will be based on. This is also true for OneDigital’s Personalized Portfolios program. However, if the plan sponsor pays OneDigital’s fee directly, OneDigital will charge a flat fee and the parties can negotiate when those payments will be due. Either party can terminate the agreement upon 30 days' prior written notice to the other. If the advisory fee had been collected in advance and the agreement is terminated in the middle of a calendar quarter, any unearned fees paid in advance will be refunded to the client on a pro-rata basis. Because it would likely be deemed a prohibited transaction under ERISA, OneDigital and its investment adviser representatives (“IARs”) are not permitted to accept any compensation for the sale of any securities or investment products when they are acting as a fiduciary investment adviser or investment manager for a retirement plan or participant, except to the extent such compensation is used to offset OneDigital’s fees. For that reason, while some IARs are also registered representatives of broker-dealers that are unaffiliated with OneDigital, they rarely offer securities or insurance brokerage services to retirement plan clients. There are, however, some exceptions to this rule. For example, when IARs who had previously serviced their retirement plan clients on a brokerage basis join OneDigital, it may take time for them to transition those accounts to an investment advisory platform. In those cases, the IAR can be paid on a commission basis through the broker-dealer with whom they are registered, but those commissions are typically used to offset OneDigital’s advisory fee. In addition, some IARs assist sponsors of “frozen defined benefit plans” to offload some or all of their liability for making future payments to beneficiaries through the purchase of an insurance annuity. (A “frozen defined benefit plan” is one that is no longer enrolling new participants but has a continuing duty to pay previously vested benefits.) As compensation for providing these services, the employee and/or investment adviser representative may collect a consulting fee from the client and/or a commission for the sale of the insurance annuity. Finally, some employees and/or IARs of OneDigital assist employers in establishing non- qualified, executive benefit plans. Because these activities involve the sale of insurance and/or securities products, those employees and/or IARs will typically receive a commission on the sale