Advisory agreement.

The agreement in brief

This is the contract between you (the client) and Stratum Capital Management LLC (the firm, we, us). By signing, electronically, in the onboarding process, you appoint us as your investment adviser with discretionary authority over the account you designate, and you agree to the fee schedule below. Read the complete agreement. This summary does not replace its terms.

1. Appointment and services

You appoint the firm as your investment adviser. We accept the appointment and agree to manage the assets you place with us (the account) on a discretionary basis, in accordance with the Stratum Capital portfolio: target weights of 30% Stratum Core and 70% Stratum Alpha. Core is executed by written rule. Alpha is executed by our judgment under a written methodology. Trades execute at the times set out in our brochure.

Discretionary means we decide which securities to buy and sell, in what amounts, and when, without asking you first. We manage within the Stratum Capital portfolio. The portfolio is the same for every client, so we do not accept client-specific restrictions. We will not accept an instruction to approve each trade individually; that is not discretionary management.

Our service is the management of the Stratum Capital portfolio and its quarterly position reviews. It does not include financial planning.

We do not provide legal, tax, or accounting advice. We encourage you to consult your own professionals.

2. Your responsibilities

You represent that you have full authority to enter this agreement, that the assets you place with us are yours to invest, and that doing so does not violate any other obligation you have.

You agree to give us accurate information about your financial situation, objectives, time horizon, liquidity needs and capacity for loss, including in the fit questions you answer when you apply. You agree to confirm your profile once a year and to tell us promptly when anything material changes. Accurate information is necessary to assess whether the portfolio suits you. A person at the firm reviews every application and may decline it.

You agree to open and maintain the custodial account we designate (Interactive Brokers, or a successor qualified custodian we name) and to fund it as agreed. The custodial account must provide the access required for the agreed services.

3. Fees

You agree to pay the firm the asset-based management fee set out below. This is our only compensation from you.

Stratum Capital: 1.00% per year on all assets.

Fees are billed quarterly in arrears, based on the market value of assets under management at quarter end.

Partial quarters are pro-rated by days under management.

Fees are deducted directly from your custodial account. You authorize this deduction in the advisory agreement.

We charge no performance-based fees. We charge no commissions.

Custodial and brokerage expenses are separate and appear on your custodial statements. They are not our fees.

Either party may terminate the agreement as described in the advisory agreement. Fees for a final partial quarter are pro-rated and any unearned prepaid fee is refunded.

Before your account opens, the onboarding process shows your estimated annual fee in dollars for the amount you enter. The percentage above is the binding term; the dollar figure is the illustration.

4. Custody and trading authority

Your assets are held at the qualified custodian in your name, not ours. You grant us limited authority to place trades in the account and to deduct our fee as described above. We have no authority to withdraw your funds to ourselves or to any third party except for our fee.

You will receive statements directly from the custodian. Compare them with our reports; if anything differs, tell us immediately.

5. Term and termination

This agreement begins when your account is opened and continues until terminated by either party.

You may terminate at any time by written notice (email suffices). We may terminate with thirty days’ written notice. Termination does not affect trades already placed or fees already earned.

On termination, fees for the final partial quarter are pro-rated to the termination date. Any unearned fee is refunded. We will work with you and the custodian to settle outstanding trades and, at your instruction, liquidate or transfer the account.

6. Standard of care and liability

We owe you a fiduciary duty: we must act in your best interest and not put our interests ahead of yours. We will manage your account with the care, skill, and diligence expected of a professional investment adviser.

We do not guarantee results. Investing involves risk of loss, including loss of principal. You acknowledge that you have read the risk disclosures in our brochure and the risk statement shown at account creation. These include concentration, lag in strong markets, a drawdown brake that can sell at low prices and miss a recovery, judgment risk in Alpha, data risk, and loss of principal. You also acknowledge that quarterly and January trading produces turnover and taxable gains in a taxable account, and that we do not provide tax advice.

Except for losses caused by our willful misconduct, fraud, or gross negligence, we are not liable for market losses or for losses resulting from your instructions, from changes in your circumstances you did not tell us about, or from events outside our control.

7. Conflicts of interest

Our fee is a percentage of assets under management, which gives us an incentive to encourage larger account balances. We address this by offering the portfolio only where it fits your goals and by disclosing the fee before you invest.

We receive no commissions, no third-party payments, no referral fees, and no soft-dollar benefits. Our personnel may invest personally in the same securities we buy for clients, which is a conflict of interest. Our Code of Ethics, available on request, governs personal trading by our personnel: client trades take priority, always.

8. Confidentiality

We treat your information as confidential and use it only to serve you, as described in our privacy policy. We do not sell your information. We disclose it only as required to operate your account (to the custodian, for example), with your consent, or as required by law.

9. Proxy voting

We vote proxies for securities we manage, in your best interest, under our written proxy voting policies (available on request). You may direct us in writing not to vote your proxies.

10. Assignment

We may not assign this agreement without your written consent. You may not assign it without ours.

11. Governing law

This agreement is governed by the laws of the State of Texas, without regard to conflict-of-law principles. Nothing in this agreement limits any right you have under federal or state securities law that cannot lawfully be waived.

12. Amendments and entire agreement

This agreement, together with our brochure, Form CRS, and privacy policy, is the entire agreement between us about investment advisory services. We may amend the agreement only in writing signed by both parties, except that we may update the fee schedule only with your written consent, and any fee increase requires at least thirty days’ advance written notice.

13. Notices

Notices under this agreement may be sent by email. Our address for notices is ask@stratumcapitalclub.com. Your address for notices is the email you provide in onboarding.

14. Electronic signature

You sign this agreement electronically during onboarding by checking the consent box and submitting your application. Your electronic signature carries the same legal effect as a handwritten one. We record the version of the agreement you signed, the time of your consent, and the identity used to sign, and we keep that record.

Related documents

Firm brochure (Form ADV Part 2A) · Form CRS · Privacy policy · Fee schedule