Description of Firm
Vested Finance Inc., doing business as "Vested Finance", is a registered investment adviser based in
El Segundo, California. We are organized as a corporation under the laws of the State of Delaware.
We have been providing investment advisory services since November 2018. We are wholly owned by
Vested Holding Corp. Vested Finance is a financial technology company focused on creating a
platform for foreign investors to invest in US equities. Our mission is to help investors grow their wealth
by providing access to diverse investment options.
As used in this brochure, the words "we," "our," and "us" refer to Vested Finance and the words "you,"
"your," and "client" refer to you as either a client or prospective client of our firm. Also, you may see the
term Associated Person in this brochure. Our Associated Persons are our firm's officers, employees,
and all individuals providing investment advice on behalf of our firm.
We offer web-based investment advisory services through a wrap-fee program ("Program") as
described in this wrap fee program brochure to prospective and existing clients. We are the sponsor
and investment adviser for the Program. A wrap-fee program is a type of investment program that
provides clients with asset management and brokerage services for one all-inclusive fee. If you
participate in our wrap fee program, you will pay our firm a single fee, which includes money
management fees, certain transaction costs, and custodial and administrative costs. You are not
charged separate fees for the respective components of the total services. We receive a portion of the
wrap fee for our services. The overall cost you will incur if you participate in our wrap fee program may
be higher or lower than you might incur by separately purchasing the types of securities available in
the Program.
Prior to becoming a client under the Program, you will be required to enter into a separate written
agreement with us that sets forth the terms and conditions of the engagement and describes the scope
of the services to be provided, and the fees to be paid.
Client Investment Process
1. Investment Advisory Services
We offer non-discretionary investment advisory services that are delivered through an automated and
interactive web-based investment management system. The investment advice rendered under is
tailored to meet with your individual investment needs and objectives and is delivered exclusively
based upon information you submit via a web-based investment questionnaire. Your responses to the
electronic investment questionnaire are used by the web-based system to provide the appropriate
recommendations based on your risk profile. After submission of the online investment questionnaire,
the web-based system will provide automated recommendations to you. It is then your responsibility to
act on any such advice. Once you pick your particular investment option, the program will automatically
process the transaction. In providing investment advisory services through the system, all information
will be provided through the web-based portal. Our firm does not verify any information we receive
from you or your agent(s) for accuracy, and we will rely on the information you provide. It is your
responsibility to promptly update your account application through the web-based portal if there are
ever any changes in your financial situation or investment objectives.
We will periodically monitor your investments, and based on different client risk profiles, we may
recommend changes (if appropriate) through the web-based system based on your particular risk
profile.
2. Sub-Advisor, Portfolio Manager and Service Provider Services
Additionally, we may enter into partnerships with various Financial Institutions that may be registered
as investment advisers, banks, or broker-dealers (the "Financial Institutions" or "Partners"). Under
these arrangements, we license our proprietary web-based technology to the Financial Institutions
acting as a service provider to the respective Partner and, depending on the partnership, may serve as
the sole adviser to the Clients referred by the Partner or as a sub-advisor to the Partner and its clients.
The sub-advisory arrangements are provided by us through proprietary software, and a website
operated and hosted by or on behalf of Vested Finance by the respective Financial Institution for the
benefit of those clients of the Financial Institutions ("Digital Advice Investors") who elect to receive
such investment advisory services from us (the "Digital Advice Program"). In the case of such sub-
advisory and portfolio management services, we generate and implement investment
recommendations based on the information and specifications provided to our software / web-based
platform by the prospective Digital Advice Investors or the Financial Institution.
In this capacity, Vested Finance's services are currently limited to the following:
1. Provide to prospective Digital Advice Investors a risk profile questionnaire (as prepared by the
Partner or as developed by Vested Finance) that will serve as the basis for the investment
recommendations;
2. Generate and/or present automated investment recommendations to each prospective Digital
Advice Investor based on the information about Digital Asset Investors provided to
Vested Finance from the Financial Institution or based on the parameters determined by the
risk profile questionnaire submitted by the Digital Asset Investors;
It is the Digital Advice Investors' responsibility to act on any such recommendations. Once you pick a
particular investment option, the Vested platform will automatically process the transaction based on
our recommendations. Our web-based portal provides all information and investment advisory
services. Our firm does not verify any information we receive from you or your agent(s) for accuracy,
and we will rely on the information you provide. It is your responsibility to promptly update your account
application through the web-based portal if there are ever any changes in your financial situation or
investment objectives.
Assets for program accounts are held at custodians who have clearing and custodial relationships with
DriveWealth, LLC. In the future, DriveWealth, LLC may enter into additional clearing relationships to
expand its capabilities and product offering as well as to reduce operational and financial risk.
DriveWealth, LLC also acts as executing broker/dealer for transactions placed in Program accounts
and provides other administrative services as described throughout this Brochure. To compare the cost
of the wrap fee program with non-wrap fee portfolio management services, you should consider the
frequency of trading activity associated with our investment strategies and the brokerage commissions
charged by DriveWealth, LLC and the advisory fees charged by investment advisers.
Changes in Your Financial Circumstances
In providing the contracted services, we are not required to verify any information we receive from you,
from your other professionals (e.g., attorney, accountant, etc.), or from partner Financial Institutions,
and we are expressly authorized to rely on the information you provide. Furthermore, unless you
indicate to the contrary, we shall assume that there are no restrictions on our services, other than to
manage your account in accordance with your designated investment objectives, risk tolerance, and
time horizon (collectively, "investment parameters"). It is your responsibility to promptly notify us if
there are ever any changes in your financial situation or investment parameters for the purpose of
reviewing, evaluating, and/or revising our previous recommendations and services.
The Program Fee
When you sign up directly as a client to Vested Finance, you may opt into either the Basic or the
Premium tier of our service and invest in any shares selected by Vested Finance based on a number
of different investment strategies or you may invest in a curated basket of stocks or ETFs (hereinafter
referred to as "Vests") under Program.
Feature Basic Premium
Pricing
$3 Account Opening
Fee
No account opening fee. INR
4500 annually (or $53.96
annually, at the time of this
writing)
Buy/sell individual stocks/ETFs within list of
5000 stocks/ETFs (which we may elect to
increase or decrease from time to time)
0.20% of trade
amount (max $20)
0.10% of Trade amount (max
$20)
OTC Stock commissions
$0.10/share, minimum
.75, and maximum 1%
of purchase
$0.05/share, minimum .75,
and maximum 1% of purchase
Participation in Vest (note that participation in
Vest is optional)
No upfront fee
No upfront fee
Withdrawal fee
$5 per withdrawal
2 free withdrawals annually,
$5 per withdrawal thereafter
Our firm pays all trade expenses of trades placed on your behalf unless otherwise disclosed in this
brochure or via a separate document. The amount you pay is the "Program Fee".
Clients have two options for paying advisory fees: 1) via a credit or debit card, or 2) via a deduction
from their account through a qualified custodian. In either case, if paying by credit or debit card, the
client will facilitate the payment each time. With respect to clients who elect the fee deduction method,
we will deduct our advisory fee only when you have given our firm written authorization permitting the
fees to be paid directly from your account.
With respect to the Digital Advice Programs offered through the partnerships with certain Financial
Institutions, Vested Finance's product offerings could vary depending on the Financial Institutions,
whom may change the availability of certain investments. Additionally, Digital Advice Program
customers’ charges for the Program’s Fees listed above vary when compared to “direct customer”
program fees. Digital Advice Program customers, please refer to your particular program’s fee
schedule for accurate fee amounts.
Vested Finance's sources of revenue include a portion of the management fees charged to Digital
Advice Investors by the Financial Institutions based on assets under management (the "Variable Fee"),
and may include digital platform licensing, hosting and maintenance fees paid by the respective
Financial Institution to Vested Finance. The Variable Fee is negotiated between Vested Finance and
each Financial Institution and generally ranges from 0.5 – 2% per year of assets under management,
assessed monthly or quarterly or a flat subscription fee ranging from INR 2000 – INR 4,000 per year
(which translates to $24.00 – $48 per year at the time of this writing), assessed quarterly or annually.
Vested Finance's agreement with its Partners may guarantee Vested Finance's a minimum monthly,
quarterly, or annual amount of management fees, such that the Financial Institution guarantees a
minimum level of management fee revenues to us, irrespective of whether the total management fees
billed by the Financial Institution to the Digital Advice Investors or Vested Finance's agreed upon share
thereof meets or exceeds that minimum.
In the context of Digital Advice Program, Vested Finance is compensated directly by the Financial
Institution. Management fees are deducted from Digital Advice Investors' accounts by Vested Finance
in accordance with the relevant Investment Advisory Agreement between the Financial Institution and
the Digital Advice Investor. Digital Advice Investors should refer to the relevant Financial Institution's
Brochure for more information regarding management fees charged in the respective Digital Advice
Program.
Further, for both Clients and Digital Advice Investors, the qualified custodian will deliver an account
statement to you at least quarterly. These account statements will show all disbursements from your
account. You should review all statements for accuracy.
Our agreement for services will continue in effect until terminated by either party. You may terminate
the investment advisory agreement upon written notice to our firm. In the event the investment
advisory agreement is terminated, any fees that have not been paid in advance and are due and not
paid will be deducted from the applicable account of the client, or if insufficient funds are available in
the user account, the client will be billed immediately with payment due at time of receipt.
As a client, you should be aware that the wrap fee charged by our firm 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 firms at lower (or higher) rates. A client may be able to obtain
some or all of the
types of services available through our firm's wrap fee program on an individual 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.
Withdrawal of Assets
You may withdraw account assets on notice to our firm, and subject to the usual and customary
securities settlement procedures. However, we design our portfolios as long-term investments and
asset withdrawals may impair the achievement of your specific investment objectives.
Termination of Advisory Relationship
You may terminate the wrap fee program agreement upon written notice to our firm. You will incur a
pro-rata charge for services rendered prior to the termination of the wrap fee program agreement,
which means you will incur advisory fees only in proportion to the number of days in the quarter for
which you are a client. If you have pre-paid advisory fees that we have not yet earned, you will receive
a prorated refund of those fees.
Upon termination of accounts held at DriveWealth, LLC, they will deliver securities and funds held in
the account per your instructions unless you request that the account be liquidated. After the wrap fee
program agreement has been terminated, transactions are processed at the prevailing brokerage
rates/fees. You become responsible for monitoring your own assets and our firm has no further
obligation to act upon or to provide advice with respect to those assets.
Other Compensation and Conflicts of Interest
Vested Services Private Limited is a wholly owned subsidiary of Vested Finance operating in India.
Vested Services Private Limited has, and may continue to do so in the future, entered into revenue
sharing agreements with various banks. Vested Finance receives revenue from its partner banks if
Clients wire money through Vested Finance's partner bank to invest funds in stocks, ETFs or basket of
stocks, or Vests. The rate of exchange charged to the customer will be as per card rate as applicable.
The margin earned (difference between the rate charged to the clients and the base rate) in the
transaction will be shared with Vested Services Private Limited, and is typically credited to Vested
Services Private Limited. Therefore, a conflict of interest exists where Vested Finance has a financial
incentive to recommend its bank partner services to clients; however, investors are under no obligation
to use the bank services that Vested Finance recommend and may select any bank or custodian of
their choosing. As of the date of this Brochure, Vested Services Private Limited has arrangements with
SBM India Ltd. and Axis Bank Ltd.
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Wrap Fee Program Disclosures
• The benefits under a wrap fee program depend, in part, upon the size of the Account, the
management fee charged, and the number of transactions likely to be generated in the
Account. For example, a wrap fee program may not be suitable for Accounts with little trading
activity. In order to evaluate whether a wrap fee program is suitable for you, you should
compare the Program Fee and any other costs of the Program with the amounts that would be
charged by other advisers, broker-dealers, and custodians, for advisory fees, brokerage and
other execution costs, and custodial services comparable to those provided under the Program.
• In considering the investment programs described in this brochure, you should be aware that
participating in a wrap fee program may cost more or less than the cost of purchasing advisory,
brokerage, and custodial services separately from other advisers or broker-dealers.
• Our firm and Associated Persons receive compensation as a result of your participation in the
Program. This compensation may be more than the amount our firm or the Associated Persons
would receive if you paid separately for investment advice, brokerage, and other services.
Accordingly, a conflict of interest exists because our firm and our Associated Persons have a
financial incentive to recommend the Program.
• Similar advisory services may be available from other registered investment advisers for lower
fees.
Additional Fees and Expenses
The Program Fee includes the costs of brokerage commissions for transactions executed through the
Qualified Custodian (or a broker-dealer designated by the Qualified Custodian), and charges relating to
the settlement, clearance, or custody of securities in the Account. The Program Fee does not include
mark-ups and mark-downs, dealer spreads or other costs associated with the purchase or sale of
securities, interest, taxes, or other costs, such as national securities exchange fees, charges for
transactions not executed through the Qualified Custodian, costs associated with exchanging
currencies, wire transfer fees, or other fees required by law or imposed by third parties. The Account
will be responsible for these additional fees and expenses.
The wrap program fees that you pay to our firm for portfolio management services are separate and
distinct from the fees and expenses charged by mutual funds or exchange traded funds (described in
each fund's prospectus) to their shareholders. These fees will generally include a management fee and
other fund expenses. To fully understand the total cost you will incur, you should review all the fees
charged by mutual funds, exchange traded funds, our firm, and others.
Brokerage Practices
If you participate in the Program, you will be required to establish an account with DriveWealth, LLC
("DriveWealth"), a full-carrying and clearing registered broker-dealer, member FINRA/SIPC.
DriveWealth is an indirect and wholly owned subsidiary of DriveWealth Holdings, Inc. We are
independently owned and operated and are not affiliated with DriveWealth. DriveWealth will hold your
assets in a brokerage account and buy and sell securities when we you instruct them to. While we
recommend that you use DriveWealth as custodian/broker, you will decide whether to do so and will
open your account with DriveWealth by entering into an account agreement directly with them. We do
not open the account for you, although we may assist you in doing so. DriveWealth will provide
clearing, execution, and brokerage-related services. We believe that DriveWealth provides quality
execution services for our clients at competitive prices. Price is not the sole factor we consider in
evaluating best execution. We also consider the quality of the brokerage services provided by
recommended broker-dealers, including the value of the firm's reputation, execution capabilities,
commission rates, responsiveness to our clients and our firm, and access to its Fractional Share
Program (as described below). In recognition of the value of the services recommended broker-dealers
provide, you may pay higher commissions and/or trading costs than those that may be available
elsewhere. In partnership with DriveWealth, we offer a fractional share program which allows you to
purchase securities in dollar amounts rather than share quantities. Investing in fractional shares has
unique risks and limitations that you should understand prior to participation in DriveWealth's Fractional
Share Program.
Rounding. The amount of fractional shares you can purchase and own in your account is rounded
down to the nearest eight decimal places. This may affect your purchase of a fixed dollar amount
order. For example, if you order $100 of a security, your transaction may not total exactly $100 due to
rounding (it could be a penny less, but would never be more than the order amount, prior to applicable
commission charges). Rounding may also affect your ability to be credited for cash dividends, stock
dividends and stock splits. For example, if you own 0.00000001 of a share of stock that pays a one
cent dividend per share, we will not credit your cash balance a fraction of a cent.
No Limit Orders. Only market orders for fractional shares will be accepted at this time.
Trade Capacity and Execution. DriveWealth executes the full share portion of customer orders on an
agency basis, routing them to market centers. To satisfy your fractional share portion of order,
DriveWealth will sell to you from their account, on a principal basis, at the National Best Bid or Offer
("NBBO") as of the time of your order. Thus any order that is for both full and fractional shares will be
executed in a mixed capacity: part as agent, part as principal. The compensation will be the same rate
charged full share orders. DriveWealth may make a profit or incur a loss on the fractional share trade.
DriveWealth may execute your fractional share orders on a principal or riskless principal basis. In the
event DriveWealth are acting as principal, they will trade with you at the then current NBBO. If
DriveWealth act as riskless principal, DriveWealth will trade with you at the price we received in the
market. Your confirmation will disclose how we acted. If you enter an order solely for a fractional share,
DriveWealth will execute your trade against its proprietary account at the then current NBBO. Orders
entered outside of regular trading hours cannot be executed.
Transfer of Fractional Shares. Fractional shares are not transferrable. If you close your account or
transfer your account to another firm, the fractional share will need to be liquidated, resulting in
potential commission charges. Fractional shares cannot be put into certificate form and mailed. They
will need to be sold. The commission charge for liquidation may match the value of the fractional share
if less than our minimum commission.
Voting Rights. Holders of fractional shares will have voting rights for the fraction of a share owned.
DriveWealth utilizes a third-party vendor, Say Communications LLC ("Say Communications"), for their
proxy and shareholder materials delivery and voting application provider, to extend voting rights to
holders of fractional shares for fractions of a share owned in brokerage accounts for which
DriveWealth serves as clearing broker. When you vote a fractional share of a security, Say
Communications will add the fractional position voted by you to the aggregate vote total for all shares
of such security reported by Say Communications on behalf of DriveWealth to the applicable vote
tabulator ("Tabulator") for the meeting or shareholder event. A Tabulator is an independent third-party
service provider selected to provide vote tabulation services for an issuer's shareholder meeting or
similar shareholder event. Neither DriveWealth nor Say are affiliated with any Tabulators. Each
Tabulator may follow differing policies for counting fractional share positions submitted to it for a
meeting or shareholder event, and it is therefore possible that a Tabulator may discard fractional
positions submitted to it by Say Communications or follow rounding practices, such as rounding down
to the nearest whole share, that have the effect of excluding some fractional positions submitted to
them from the total number of shares voted. Note that issuers may also not report fractional shares
voted at their meeting or shareholder event in the vote totals reported on their Current Report on Form
8-K or otherwise.
Research and Other Soft Dollar Benefits
We do not have any soft dollar arrangements.
Economic Benefits
As a registered investment adviser, we have access to the institutional platform of your account
custodian. As such, we will also have access to research products and services from your account
custodian and/or other brokerage firm. These products are in addition to any benefits or research we
pay for with soft dollars, and may include financial publications, information about particular companies
and industries, research software, and other products or services that provide lawful and appropriate
assistance to our firm in the performance of our investment decision-making responsibilities. Such
research products and services are provided to all investment advisers that utilize the institutional
services platforms of these firms, and are not considered to be paid for with soft dollars. However, you
should be aware that the commissions charged by a particular broker for a particular transaction or set
of transactions may be greater than the amounts another broker who did not provide research services
or products might charge.
Brokerage for Client Referrals
We do not receive client referrals from broker-dealers in exchange for cash or other compensation,
such as brokerage services or research.