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Pinnacle Wealth

CLIENT RELATIONSHIP DISCLOSURE INFORMATION DOCUMENT

Pinnacle Wealth Brokers Inc. (“Pinnacle”, “we”, “our”, “us” or the “firm”) would like to welcome you as a client of our firm. We look forward to building our relationship with you. As with any relationship, it is useful to begin with a clear understanding of the roles and responsibilities that each party has in that relationship. The purpose of this Client Relationship Disclosure Information Document is to help you to understand the nature of the services that you can expect to receive from our firm and your Pinnacle Representative, and your rights and responsibilities.

ABOUT PINNACLE

Pinnacle is registered as: (a) an exempt market dealer (“EMD”) in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nova Scotia, New Brunswick, Newfoundland and Labrador and Prince Edward Island (the “Applicable Jurisdictions”); (b) an investment fund manager (“IFM”) in Alberta, Ontario, Quebec, Newfoundland and Labrador; (c) a portfolio manager (“PM”) in the provinces of Alberta, British Columbia, Manitoba, Ontario, Quebec and Saskatchewan; and (d) a Mutual Fund Dealer “MFD”  in the province of Quebec through The Autorite de Marchés Financier (AMF). The Alberta Securities Commission (ASC) is our principal regulator. Pinnacle has a network of Representatives who are registered with us in one or more of the Applicable Jurisdictions.

For greater certainty, throughout this document the term “Representative” will refer to both a Dealing Representative for the Exempt Market and in Quebec a Mutual Fund Dealer Representative unless otherwise specified. For clients who transact with Pinnacles Portfolio Management service, Your Advising Representative (AR) and or Associate Advising Representative (AAR), will collectively also be referred to as your Portfolio Manager (PM).

SECURITIES WE SELL AND SERVICES WE PROVIDE

Exempt Market Securities

Pinnacle primarily enters into a distribution or agency agreement with third-party issuers to sell their securities and assists investors in purchasing securities of those issuers. Pinnacle may also sell its own proprietary products at any time and from time to time (See s. 9 Conflict of Interest – Related and Connected Issuers). Pinnacle sells these securities to investors under available prospectus exemptions under National Instrument 45-106 Prospectus Exemption (“NI 45-106”) and local exemptions within a jurisdiction, subject to applicable securities laws in Canada (the “Available Prospectus Exemptions”). For example, we commonly sell securities to investors under the offering memorandum prospectus exemption and the accredited investor prospectus exemption set out in NI 45-106 in the Applicable Jurisdictions.

The market for selling securities under Available Prospectus Exemptions is called the “private market” or “exempt market” since, among other things, the purchase or sale of securities are exempt from the requirement to deliver a prospectus to an investor and are not subject to the continuous disclosure requirements for reporting issuers (i.e., public companies), provided that any such purchases or sales are made under an Available Prospectus Exemption.

Securities sold in the private markets are often referred to as “exempt market securities” or “exempt products”. Exempt market securities offer investors an opportunity to diversify their investment portfolios by investing in securities of issuers that are not publicly traded or offered by a prospectus. Pinnacle generally only sells exempt market securities of issuers that are non-reporting issuers (e.g., non-public companies) under Available Prospectus Exemptions. However, Pinnacle may sell securities of reporting issuers on a private placement basis, subject to applicable securities laws.

Pinnacle performs a due diligence review of exempt market securities and then presents new products to Pinnacle’s Product Review Committee. Once approved, our responsibility and that of your Pinnacle Representative is to make sure that any investment we recommend is suitable for you at the time of your investment.

Mutual Funds - Quebec Residents Only

A mutual fund is a type of financial vehicle made up of a pool of money collected from many investors to invest in securities like stocks, bonds, money market instruments, and other assets. Mutual funds are operated by professional money managers, who allocate the fund’s assets and attempt to produce capital gains or income from the funds provided by investors. A mutual fund’s portfolio is structured and maintained to match the investment objectives as stated in its simplified prospectus and annual information form.

Mutual funds give small or individual investors access to professional managed portfolios of equities, bonds, and other securities. Each shareholder, therefore, participates proportionally in the gains or losses of the fund. Mutual funds invest in a vast number of securities, and performance is usually tracked as the change in the total market cap of the fund- derived by the aggregating performance of the underlying investments.

Pinnacle Asset Management (PAM) Discretionary Managed Accounts Services

If you engaged PAM to manage your investments on a discretionary basis, this means you (the client) have given us (PAM) discretion to make and implement investment decisions on your behalf within agreed upon limits. Discretionary account management means that you have delegated the day-to-day investment decisions to us and therefore we do not require you to authorize each, and every transaction in your account(s). At the same time, we, as the PM are responsible for the investment advice given to you, and to ensure that the investment mandate(s) are suitable. For this service you will be charged a fee. Such fees are calculated as a percentage of the assets under management.  Fees are discussed in the section “Fees”, however your personal fee schedule is specified in your Investment Policy Statement (IPS).

Standard of Care

The PM is to ensure all advice provided is unbiased and meets the appropriate standard of care and is suitable for your investment needs and objectives.

The PM shall, in carrying out their obligations under this Agreement, act honestly, in good faith and in the best interests of the client. They will exercise the degree of care, diligence, and skill that a reasonably prudent portfolio manager would exercise in similar circumstances. Notwithstanding the foregoing, the Client understands and agrees that the PM or Pinnacle may not represent and cannot guarantee results for the account.

The client understands that there are risks attached to the PM’s investment of the account in securities, including various market, currency, economic, political, and business risks. The client agrees that the PM will not be liable to the client for any loss that the client may suffer resulting from the PM’s good faith decisions or actions where the PM exercises the care, diligence and skill expected of a reasonably prudent portfolio manager. 

Permitted Investor

The Disclosure Requirements do not apply to Pinnacle in respect of Permitted Client if the Permitted Client, who is not an individual, has waived, in writing, the Disclosure requirements and Pinnacle does not act as an adviser in respect of a managed account of the Permitted client.

YOUR RESPONSIBILITIES AS AN INVESTOR

As a client of Pinnacle, it is important that you:

Disclose information about yourself: Please provide your Pinnacle Representative, with a full and accurate description of your financial situation, investment objectives, and other information requested as part of our “know-your-client” process as that will assist us, and your Pinnacle Representative, in understanding your needs and objectives including your overall risk profile,  in order to recommend suitable investments.

Keep Pinnacle up-to-date: It is your responsibility to promptly inform your Pinnacle Representative, of any material change to your personal information, financial or life circumstances. At least once per year, we will remind you about your need to inform us if there are any changes in your KYC information. However, you are still responsible for updating your Representative of any material changes about yourself or situation as discussed above. This allows your Pinnacle Representative, to assess whether changes to your investment portfolio and/or strategy are necessary. A material change would be a change to any information that could reasonably result in changes to the types of investments that are suitable for you, such as, income level, investment objectives, risk tolerance, risk capacity, time horizon or net worth. Other examples of material changes include change in employment status, marital status or change of retirement plans. Suitability, recommendations and advice are based on this information and your Representative is best able to serve you if you help us keep your information up-to-date.

We require your written approval, with your signature, to authorize any change in your information.

Stay on top of your investments – Please carefully review:

  • all account documentation, including your Pinnacle Know-Your-Client Form and any offering document or sales and marketing materials of issuers whose securities you may purchase and that are provided to you in connection with making any investment decision; and

  • any trade confirmation or account statement we send you, and report any inaccuracies to your Pinnacle Representative, as per your situation.

Report any redemptions – As an exempt market client, it is your responsibility to report to us, in writing, of any redemptions you make with any of your investments that you made through Pinnacle so we can update our books and records accordingly. As redemptions may be made directly with an issuer and not Pinnacle, and under each issuer’s discretion to execute, we do not have this information unless it is provided to us and accordingly, your client statements would be incorrect as to the number and type of securities you originally purchased through Pinnacle.

Be informed – Please make sure you understand:

  • all fees and charges you have to pay, initially and ongoing, in connection with any securities you purchase including, but not limited to, trustee fees; and

  • the risks and returns involved with any investment you are making as disclosed in any offering document or sales literature of an issuer you receive and discuss them with your Pinnacle Representative.

Seek professional advice: You are encouraged to consult professionals, such as a lawyer or an accountant, for legal or tax advice, where appropriate; and

Ask questions: You are encouraged to ask questions and request information from your Pinnacle Representative, and to resolve any concerns about your investment or account with your Pinnacle Representative.

NATURE AND TYPE OF CLIENT ACCOUNTS

When you open an account with Pinnacle, as an exempt market dealer or “EMD”, it is a transaction-based account. You are responsible for approving all investment decisions and trading in your account. Pinnacle, as an EMD, does not hold or control any funds or securities on behalf of our clients except for those proprietary products where we may act as a portfolio manager and/or investment fund manager. The exempt market securities sold by Pinnacle as an EMD are registered in a client’s name, or as otherwise instructed by a client, and included on an issuer securities register (“client name securities”) and kept in the possession of the client or registered and kept in a third-party account with, for example, an issuer or trustee of a registered plan (e.g., RRSP, RRIF, LIRA, LIF, TFSA or RESP). Accordingly, your account with Pinnacle as an EMD is informational in nature and reflects your transaction history with us. If you do not report any transactions, including but not limited to, redemptions, transfers, account changes or RIF rollovers you make directly with an issuer, we may not know to reflect these transactions and amend or remove these positions from future account statements.

Your signature is required to authorize any EMD transaction irrespective of the type of account chosen by you the client.

As a client of our Mutual Fund Dealer, you will be given the option to have your accounts held in one of the following two ways:

  • in your (the client) name directly through the fund company; or

  • in a Nominee account(s) in your (the client) name which allows for you the investor to hold multiple different mutual funds within a single account, nominee - meaning in trust on behalf of you, the client. Nominee accounts have fees as determined and charged by the custodian. If as a Pinnacle client you wish to use a nominee account, then you are required to open the account(s) with the custodian identified by Pinnacle and to complete their standard form document bundle(s) for account(s) opening.

When you open an account with Pinnacle, as Mutual Fund Dealer, you are responsible for authorizing all investment decisions and trading in your account. Pinnacle does not hold or control any funds or securities on behalf of our clients. 

Pinnacle Asset Management (PAM) Clients

Your accounts are of a discretionary nature. Securities within your accounts are held by the appointed custodian in a separate account. These securities will be identified on the custodian’s records as belonging to you and will not be co-mingled with holdings from other managed account clients. We will provide you with the custodian’s booklet and information separately.

Following are the types of documentation most commonly used to open your PAM accounts:

  • New Account Application, and IPS – containing your completed KYC information and Terms and Conditions, and the applicable Fee Agreements, are legally binding contracts between you and Pinnacle Asset Management. 

  • Copies of your account information documents (i.e., Relationship Disclosure Document) 

  • Depending on the type of account (i.e., Individual, Registered Plan accounts), you may be required to complete additional stand-alone documents. 

  • A Welcome Package is also provided to you that includes but not limited to the following documents: 

  • Canadian Investor Protection Fund Brochure 

  • Custodian Fee Schedule List.

  • A Guide to your Statement of Account Credential brochure.

  • CIRO Brochures:

  • Making a Complaint, a Guide for Investors

  • How Can I get My Money Back, A Guide for Investors 

  • How CIRO Protects Investors 

SELECT RISK FACTORS PERTAINING TO YOUR INVESTMENTS

Exempt Market Clients

Exempt market securities have many benefits that make them a great tool in diversifying your investment portfolio as well as achieving your investment objectives, for certain investors based on suitability. Prior to investing, it is important to understand the risks associated with investing in exempt market securities, including:

Risk of loss: Investing, in general, has risk associated with it, including the risk that you could lose a portion or all of your investment.

Fewer requirements to provide ongoing disclosure: The issuer of your exempt market securities may be a “non-reporting issuer”. A non-reporting issuer is generally not legally required to provide investors with continuous financial and non-financial disclosure about the issuer, unless required under an Available Prospectus Exemption. For example, generally a non-reporting issuer is not required to notify the public of certain material changes to its business or publish certain financial information. As a result, you may have limited information about your investment in exempt market securities after you purchased them due to reduced transparency about the issuer or any legal requirement to receive ongoing information about the issuer, subject to applicable laws or as otherwise issuers are contractually required to provide investors. However, in certain Canadian jurisdictions, issuers that sell securities under the offering memorandum exemption (s. 2.9 of NI 45-106 ) are required to file their offering memorandum and related marketing materials and audited annual financial statements that are publicly available. For example, such limited information may be found at www.sedar.com. In addition, although Pinnacle’s distribution agreement with an issuer contractually requires the issuer to provide us with ongoing information about its business and affairs, such information may not be provided in a timely manner, or at all, or is incomplete. If so, this may impact Pinnacle’s ability to provide any updates about an issuer.

Less regulatory oversight: There are less regulatory protections and oversight involving a purchase of exempt market securities of non-reporting issuers than publicly traded securities. For example, Canadian securities regulatory authorities are not required to review a non-reporting issuers’ offering documents and/or continuous offering documents, if any.

Illiquid and unlisted securities with limited secondary market: Exempt market securities are “illiquid” and not listed on a stock exchange. There is a risk that you cannot resell or redeem your exempt market securities, at any time, from time to time or at all, and such securities are subject to an indefinite hold period, unless: (a) the securities can be resold under available prospectus exemptions; (b) the issuer becomes a reporting issuer after a seasoning period; or (c) in accordance with any redemption rights as set out in an issuer’s constating documents(e.g., declaration of trust for a trust, articles of incorporation or limited partnership agreement for a limited partnership).

Redemption risk: If an issuer provides investors with redemption rights, your ability to receive the return of your principal investment is subject to various terms and conditions including, when a redemption notice must be provided by an investor, the redemption date, when a redemption will be paid by the issuer and possible redemptions fees. Certain issuers may also limit cash redemptions to a fixed amount over a certain period of time (e.g., $50,000 per quarter), and if redemptions exceed the cash limit, then the issuer may issuer redemption promissory notes (“Notes”), subject to their own repayment terms and conditions, which Notes cannot be held within a registered plan, such as an RRSP (e.g., registered plans). If such securities are held within a registered plan and if such redemption Notes are delivered, they may subject the accountholder (i.e., you the investor) to adverse tax consequences.

Foreign currency risk: You may be exposed to the risk associated with currency fluctuations, if certain investments you make are in non-Canadian dollar denominated securities or in issuers whose businesses are carried out in foreign jurisdictions, which create exposure to foreign currency fluctuations.

Issuer leverage risks: You may also be exposed to the risk associated with the amount of leverage or debt that an issuer uses to finance assets and/or its business operations.

Operation and key person risk: The management of some of the issuers whose securities we sell are often dependent on a small number of key officers and employees, the loss of any of whom could have an adverse effect on your investment. This is called “key person” risk.

Additional risks pertaining to each investment you are purchasing will be set out in an issuer’s offering document (e.g., offering memorandum) provided to you and explained by your Pinnacle Representative. Please discuss these investment risks with your Pinnacle Representative carefully and make sure you thoroughly understand them prior to investing.

Mutual Fund Clients

There are risks associated with every investment. In general, investment products that have lower risk also have lower potential returns, and investors who seek higher returns must be willing and able to accept higher risk. . Every investment product has unique risks and you are required to read the disclosure document for each product for a description of the specific types of risk related to that product. For example:

  • money market funds and fixed income mutual funds are generally considered to be safer investments because they have lower risk of loss of principal but have a risk that your returns will be less than the rate of inflation;

  • other mutual funds have the risk associated with the underlying type of investment, such as the volatility of the stock markets;

Risk Profile

Your risk profile forms part of your KYC documentation and indicates your willingness (called risk tolerance) and ability (called risk capacity) to assume investment risk (together, your “Risk Profile”). Your profile should reflect the relative weighting of the type of investments you wish to hold in the plan. The value of the investments recommended and held should not exceed the allocation thresholds.

PINNACLE’S “KNOW-YOUR-PRODUCT”, “KNOW-YOUR CLIENT” AND SUITABILITY OBLIGATIONS

Securities law requires Pinnacle to determine whether a proposed purchase or sale of a security for a client is a suitable investment for that client. There are two key requirements for determining suitability: (a) we must know the product we are recommending (this is our “know your product” or “KYP” obligation); and (b) we must know our client or you (this is our “know-your-client” or “KYC” obligation), before we can determine whether an investment is a suitable investment for you, our client.

Pinnacle’s “know-your-product” obligation: This means that Pinnacle must understand the structure and features of each investment product we recommend. This includes costs, risks and, in the case of the exempt market, the investor eligibility requirements. The KYP requirement applies to both Pinnacle as a firm and your Pinnacle Representatives. Pinnacle’s Corporate Finance and Research Group have a process for reviewing and approving new exempt market products and existing products whose structure or features have significantly changed. However, if a product is on our “approved list” for sale under our exempt market dealer registration, it does not mean that it will be suitable for all clients. Pinnacle and your Representative must still determine whether any proposed investment is a suitable investment for each client. The extent of our product review process will depend on the structure and features of the product.

Pinnacle’s approval of an investment product alone does not satisfy our KYP obligation. Your Pinnacle Representatives must also understand a product/ investment before they can determine whether it is suitable to recommend to you, our client. As part of this process, Pinnacle Representatives receive and undergo product training and continuing education about the offering of securities to ensure they can conduct their suitability review with an appropriate understanding of the products and their risks.

Pinnacle’s “know-your-client” obligation: This means that Pinnacle is required to collect certain information about our clients in order to determine whether or not the investment(s) being considered is suitable for them. The information is set out in our “Know-Your Client” Form and supporting documents, a document that is required to be completed in order to become a Pinnacle client. Pinnacle’s “Know-Your Client” Form includes personal information such as your: (a) employment and financial information; (b) marital status; (c) financial objectives; (d) source of funds; (e) investment knowledge; and (f) risk profile. Pinnacle has an obligation to assess whether or not a purchase or sale of a security is suitable for each investor prior to completing a trade.

Suitability review - Once we have satisfied our KYP and KYC obligations, we can then assess whether a particular investment is suitable for you personally before making a recommendation. In certain circumstances, you may request that Pinnacle make an investment for you that we believe is unsuitable for you. In such circumstances, Pinnacle may refuse your trade order and advise you against proceeding with the trade. If you still wish to proceed with the transaction Pinnacle will require that you complete and sign a client-directed trade authorization form, if permitted by the CCO and regulation.

Permitted Investor - the Suitability Requirements do not apply to Pinnacle in respect of Permitted Client if the Permitted Client, has waived, in writing, the Suitability requirements and Pinnacle does not act as an adviser in respect of a managed account of the Permitted client.

PRE-TRADE DISCLOSURE OF INVESTOR CHARGES

Exempt Market Clients

Pinnacle does not charge you for operating your account since we earn our compensation through commissions paid by the issuers and in certain instances, ongoing payments. See “Commission and fees charged by Pinnacle” below.

Issuers may, however, impose other costs or fees relating to the making, holding and selling your investment over which Pinnacle has no control. For example, this may include redemption fees that might be triggered upon the redemption of your security as a flat amount and/or pursuant to an early redemption fee schedule that will apply, where applicable, on specific securities (see Deferred Sales Charge below). Please refer to the offering document of the issuer for fees and commissions, initial and ongoing, associated with each investment being considered.

Some of the exempt market securities Pinnacle distributes may be eligible to be held in a registered plan. If your investment is registered, it will be held at a trust company (e.g., Olympia Trust Company or Computershare Limited) that charge(s) an annual fee as well as transaction fees including, but not limited to, purchases, transfers, redemptions and estate settlements. The fees will vary among trust companies and according to the province or territory where you reside and are subject to GST or HST. Please refer to your trustee agreement for specific details. Please note that neither Pinnacle nor your Pinnacle Representative is responsible for making any payments on your behalf to any trust company or returning any commissions in the event that an issuer’s business results in failure, including bankruptcy (a “Failed Issuer”). Furthermore, any ongoing, periodic or other fees or charges assessed by any trust company for securities of a Failed Issuer, including taxes owed or to be paid, are your responsibility, as set out in the agreement between you and the trust company.

Front-End Load (“FEL”)

At the time of investment, you may be charged a percentage of the amount invested, generally between 0% and 5%. For example, if you invest $1,000 with a 5% FEL, $950 is invested in units of the Offering and $50 is paid to Pinnacle. (a 0% FEL means that you are not paying an upfront sales charge.). This amount is subtracted from your investable funds before subscription.

Low Load (“LL”)

LL funds are similar to deferred sales charge funds, except that they normally pay a lower sales commission and have a shorter redemption schedule.

Deferred Sales Charge (“DSC”)

You do not pay any sales charge at the time of investment, but you may incur the DSC when you sell or redeem securities in the fund, depending on how long you have held it. The commissions paid to Pinnacle and your DR are paid from the fund or partnership. The DSC reduces after you have held the fund for a few years. There are generally no DSC fees after holding a fund for 6 or 7 years. The Offering Document(s) has a table with details of the DSC payable on redemptions within a given time after investing. Pinnacle and your Representative will receive a sales commission from the investment fund company when you purchase a DSC fund.

Mutual Fund Clients

ACCOUNT FEES

Where you, the client, elect to hold your investments as nominee held, nominee account fees may apply. Please refer to the fee schedule provided by the nominee.

Where you elect to hold your investments as “client held” directly with one or more mutual fund issuers, accounts fees which may apply will be specified in the mutual fund simplified prospectus and annual information form.

INVESTMENT FEES AND CHARGES

The Fund Facts or other disclosure document has details of the amount and type of compensation your MFD Representative receives with respect to products sold through Pinnacle as and MFD. Your MFD Representative can provide further details for any specific product. You can also find more information about fees and charges in the Fund Facts, simplified prospectus, annual information form, or other disclosure document for a specific product. The general types of compensation are:

Front-End Load (“FEL”)

At the time of investment, you will be charged a percentage of the amount invested, generally between 0% and 5%. For example, if you invest $1,000 with a 5% FEL, $950 is invested in units of the fund and $50 is paid to your Mutual Fund Representative and Pinnacle. (a 0% FEL means that you are not paying an upfront sales charge.)

Deferred Sales Charge (“DSC”) – No Longer Available for Purchase

You do not pay any sales charge at the time of investment, but you may incur the DSC when you sell or redeem securities in the fund, depending on how long you have held it. The DSC reduces after you have held the fund for a few years. There are generally no DSC fees after holding a fund for 6 or 7 years. A mutual fund disclosure document has a table with details of the DSC payable on redemptions within a given time after investing. Your MFD Representative will receive a sales commission from the investment fund company when you purchase a DSC fund.

Some DSC funds are eligible for “10% free” switches as described below while others are not. Your MFD Representative can confirm whether a particular LL/DSC fund is eligible for 10% free switches. This privilege is usually not cumulative; that is, if you do not use it during a year it expires for that year and you cannot redeem 20% of your units on a fee-free basis the following year.

Low Load (“LL”) No Longer Available for Purchase

LL funds are similar to deferred sales charge funds, except that they normally pay a lower sales commission and have a shorter redemption schedule. Some LL funds are eligible for “10% free” switches, as described above, while others are not. Your MFD Representative can confirm whether a particular LL fund is eligible for 10% free switches. This privilege is usually not cumulative; that is, if you do not use it during a year it expires for that year and you cannot redeem 20% of your units on a fee-free basis the following year.

Service Fees / Trailer Fees

Most investment funds pay a service fee, also known as a trailer fee, which is calculated as a percentage of the value of the funds, to compensate the MFD Representative and Pinnacle, as MFD, for the on-going service they provide to clients who hold the fund. Service fees typically range from 0% to 1.25% on an annualized basis.

OTHER FEES AND CHARGES

Investment funds and certain other investment products are subject to management expenses that may include portfolio management fees, regulatory filing fees, legal and audit fees, brokerage commissions, printing and mailing fees for financial statements and other investor reporting, and general operating and administration expenses. Service fees are paid by the manager as part of the general operating expenses. Quoted rates of return for investment funds are calculated after deducting management expenses.

Many investment funds impose a “short term trading fee” or similar charge if an investor purchases and redeems the fund within a short time period. Neither Pinnacle nor your MFD Representative receives any portion of the short-term trading fee.

Some Pinnacle MFD Representatives may impose a switch (or change) fee for switches between funds at the same investment fund company. Your Pinnacle MFD Representative will tell you in advance if he or she intends to charge a switch fee. The fee may be negotiated with your Pinnacle MFD Representative.

Refer to the investment fund’s offering document for details of the management expenses, switch fees, and the short-term trading fee and applicable time limits for a specific fund.

Pinnacle Asset Management Fee

Your account(s) will be charged a management fee, as set out in the documents we have provided, specifically your Investment Policy Statement. The fee will compensate PAM for the portfolio management services, the custodian for holding and administering the securities in your portfolio, and any fees that need to be collected and remitted directly by PAM to a third party for portfolio management activities.

  • In consideration of the services of the PM, the client shall pay to Pinnacle Asset Management a fee with respect to each account (the Investment Management Fee) as outlined in the fee section of the Investment Policy Statement (IPS).

  • Fees will be calculated and accrued on a daily basis based on the market value of the account and will be charged monthly, in arrears. Portfolio management fees will be charged on the total assets beneficially held by the client in their managed account(s).

  • In the case where you have been referred to PAM by a Referring Agent, or Referring Firm, a portion of the fees PAM collects may be shared with the Referring Agent or Referring Firm. In this case a referring acknowledgement will need to be signed by you.

  • The PM may amend the fee, in its sole discretion, which will necessitate you resigning a new fee agreement before the new fees can be put into effect.

  • The PM is hereby authorized to collect any Investment Management Fees directly from the applicable account assets.  Additionally, the PM may sell, or if necessary, instruct the Custodian to sell, such account assets as required to facilitate the payment of the Investment Management Fees.   Investment Management Fees will be subject to either federal or harmonized sales tax, where applicable. 

  • The Investment Management Fee does not include fees associated with account closures or transfers out, or other administrative fees charged by the Custodian. Please refer to the Fee information provide on these Custodian fees.

WHAT YOU RECEIVE FOR THE INVESTMENT FEES AND CHARGES

The fees and charges related to your investments pay for the services that you receive directly from your Representative as well as the costs related to our business operations. Pinnacle’s costs include regulatory filing fees, registration and membership fees, insurance, staff for regulatory compliance and transaction processing, audits, technology and computer systems, office rent and other office costs, travel, and education. Each Representative operates as an independent Representative and from the portion of fees that they receive they have to pay for their own office and staff costs, technology services, continuing education, and other business expenses.

PAM CUSTODIAL ARRANGEMENT

Pinnacle Asset Management (PAM) uses the services of a custodian, (example Aviso Correspondent Partners). 

The custodian is tasked with certain record keeping and operational services which may include execution and settlement of securities transactions, custody of securities and cash balances, and extension of credit on margin transactions.

Responsibilities the Custodian 

  • Securities will be identified on the custodian’s records as belonging to you and will not be co-mingled with other holdings of other managed account clients. 

  • They are responsible for the effective safekeeping, trade settlement, record keeping and tax reporting with respect to your managed account holdings. 

  • PAM has been granted discretionary authority over the account(s) held at the custodian for the purpose of trading securities, but PAM does not have the authority to withdraw or transfer account holdings other than for the withdrawal of the Investment Management Fees you have pre-authorized. This will allow us to fulfil our obligations under the IPS we have executed with you.  Transactions will be made to your account(s) without your prior knowledge, approval, oversight, or control. 

  • PAM will collect certain documentation on behalf of the custodian and that the custodian must obtain PAM’s consent with respect to any instructions it receives on the account. 

  • The custodian will process orders for the purchase, sale, or transfer of securities for your account, as your PM directs.  The custodian is not obligated to accept orders for securities transactions for your account directly from you and will do so only in exceptional circumstances.   The custodian reserves the right to refuse to accept a particular account or order at its sole discretion.  

  • The custodian will receive and deliver cash and securities for your account and will record such receipts and deliveries according to information that has been provided by PAM. 

  • If PAM obtains possession of any money or securities intended for your account, PAM is solely responsible for correctly identifying and promptly forwarding the same to the custodian. PAM is responsible for supervising the activities of the individual account(s) who service your account, for resolving any complaints regarding the handling of your account, and in general, the ongoing relationship that it has with you. 

  • The custodian will hold in their custody any securities and cash which is received for your account(s) and will collect and disburse dividends and interest.  In addition, they will process all reorganization and voting instructions with respect to the securities held in custody on your behalf.   

  • Your custodian will assist you and PAM in dealing with any discrepancies or errors that may arise from the processing of transactions in your account(s). 

  • The custodian does not control, audit, or otherwise supervise the activities of your PM or employees of PAM.  In addition, they do not undertake the responsibility of reviewing the appropriateness of transactions entered by your PM on our behalf.

  • The custodian will provide your PM and PAM with written reports of all transactions processed for your account to enable it to carry out its responsibilities. 

  • The custodian will provide monthly statements for all of your account(s), unless there is no activity in the account, then it will be on a quarterly basis. 

  • The safety and protection of your assets are of utmost importance.  Custodial firms are members  of the Canadian Investor Protection Fund (CIPF). Customers’ accounts are protected for losses arising from the insolvency of a member firm. Please refer to the brochure provided at account opening or visit www.cipf.ca. If you have misplaced yours, please contact your Portfolio Administrator or Chief Compliance Officer and they can provide a copy to you. 

  • The account protection applies in the unlikely situation where a custodian becomes financially insolvent and is unable to meet its obligations to its customers.  CIPF does not cover customers’ losses which result from fluctuating market values, regardless of the cause of the losses. 

LEVERAGING AND BORROWING TO INVEST

Where an investor uses borrowed money to finance a purchase of securities, there are additional risks. Using borrowed money to finance the purchase of securities involves greater risk than a purchase using cash resources only, such as the responsibility to repay the loan and pay interest as required, even if your investment does not perform as expected. An investor must realize that these obligations continue even if the value of the securities declines. The use of borrowed funds will magnify your losses further in this circumstance. As a result, Pinnacle typically does not recommend investing in exempt market securities through the use of borrowed funds and encourages you, as an investor, to consider the following risk factors:

Interest rate risk: If interest rates rise, you will need a sufficient cash flow cushion to accommodate the increased cost of a   floating rate loan or line of credit. Should there be any financial hardship, such as loss of employment or reduction in income, it may become difficult or impossible to continue meeting your repayment obligations.

Inherit market risk and magnified losses: Just as leveraged investing can magnify your effective after-tax return; it can also magnify your losses. Leveraging does not remove inherent market risks in the market or prevent you from making bad investment decisions. You have a continuing obligation to repay principal and interest even if the value of the investment goes down.

Changing legislation and tax risk: The taxation legislation regarding the tax deductibility of interest is subject to change. It is important to keep abreast of any and all such changes. Not all borrowed funds for the purpose of investing can qualify for a tax deduction. Consult your tax professional about potential tax implications prior to borrowing to invest.

Risk tolerance: Using leverage as an investment strategy should be avoided if you have a low risk tolerance and experience anxiety or discomfort when the markets and economic conditions decline or take a downturn.

Leverage/Borrowing money to invest: Using borrowed money to finance the purchase of securities involves greater risk than a purchase using cash resources only. If you borrow money to purchase securities, your responsibility to repay the loan and pay interest as required by its terms remains the same even if the value of the securities purchased declines. This option is only available to accredited investors.

CONFLICT OF INTEREST

Pinnacle has a responsibility of acting fairly, honestly and in good faith with our clients and in connection with material conflicts of interest, acting in our client’s best interest. Given the nature of our business, conflicts of interest may arise between: (a) you and Pinnacle and its employees; (b) you and our other clients and (c) between us and our related and associated companies. In general, we deal with and manage relevant conflicts as follows:

Avoidance: This includes avoiding conflicts that are prohibited by law as well as conflicts that cannot effectively be addressed.

Disclosure: By providing you with information about conflicts, you are able to assess independently their significance when evaluating our recommendations and any actions we take.

Control: We manage acceptable conflicts through Pinnacle’s conflicts of interest policy and other applicable policies and procedures.

As a client of Pinnacle, you are not required to invest in the Exempt Market through Pinnacle if you are a Mutual Fund client in Quebec and conversely, if you are a Pinnacle client residing in Quebec, you are not required to invest in Mutual Funds with a Pinnacle Representative if you are investing in the Exempt Market through Pinnacle.

Exempt Market Clients

Related and Connected Issuers

In situations where an issuer is considered to be “related issuer” and/or a “connected issuer” of Pinnacle, where we may have, or could be perceived as having, a conflict of interest, certain prescribed information must be disclosed to you prior to purchasing any security with the proper disclosure signed as a client acknowledgment. Generally, a “related issuer” is an issuer related to us through common ownership (i.e., either we are an influential shareholder of the issuer, the issuer is an influential shareholder of Pinnacle, or a third-party is an influential shareholder of both Pinnacle and the issuer). Similarly, a “connected issuer” is an issuer with whom Pinnacle has a relationship which may lead a reasonable investor to question if Pinnacle and the issuer are independent of each other (e.g., as a result of indebtedness or certain other relationships, such as common officers and/or directors).

We may be perceived as selling you investments of a Related and/or Connected Issuer [including proprietary products] over other investments we have available on our product shelf. To address such potential conflicts, we will inform you of the fees, commissions, and other compensation in advance so that you know what you will be paying. This is disclosed to you in various ways, including in an issuer’s offering documents and, for greater transparency, in Pinnacle’s Offering Memorandum Acknowledgement Form and Pinnacle’s Related and Connected Issuer Disclosure Form. Pinnacle also has a Proprietary Product Conflict of Interest Policy involving the sale of any proprietary product, which sets out various conflicts disclosure and controls we have put in place so that we sell you suitable investments based on your unique circumstances and while acting in your best interest and putting your interests first.  Such controls include but are not limited to the following:

  • Providing Representatives with a comparable to assist in suitability is not based upon proprietary advantages, if any should exist.

  • Maximum allowable investment

  • Disclosure of relationship; and

  • Any additional compensation received, if any

In addition to acting and being paid as an EMD in connection with the distribution of securities for Related and/or Connected Issuers, Pinnacle may also provide wholesaling services, for additional compensation, for certain Related and/or Connected Issues. As of the date hereof, Pinnacle provides wholesaling services, in certain jurisdictions, for those Related and/or Connected Issuers identified above with a single Asterix (*). “Wholesaling services” means services of a representative of Pinnacle (who may also be a Pinnacle Representative) that includes, among other things, product training and education of an offering to other Pinnacle Representatives or presentations at investor seminars or events on behalf of a Related and/or Connected Issuer. For providing such wholesaling services, Pinnacle will receive a wholesaling fee of up to [1%] of the gross private placement proceeds raised, in certain agreed upon jurisdictions, subject to the wholesaling agreement between Pinnacle and the Related and/or Connected Issuer. A Pinnacle Representative may provide such wholesaling services on behalf of Pinnacle (the “Wholesaling DR”) and if so, Pinnacle has adopted a Conflict of Interest Policy for Wholesaling Activities. It states, among other things, that the Wholesaling DR will not receive any wholesaling compensation for any sale of securities of a Related and Connected Issuer to their personal clients; they will only be paid the compensation disclosed in the offering document of the Related and Connected Issuer as paid to other Pinnacle Representatives.

For more information on how the above issuers are Related and/or Connected Issuers of Pinnacle, we refer you to the disclosure in the offering document of each such issuer.

There is a potential material conflict of interest that we may prefer selling you securities of those Related and Connected Issuers if we also provide wholesaling services for such issuers since we receive additional compensation for such services in addition to other compensation. We have addressed such conflicts as discussed above.

Pinnacle Pro Group Investments

Pinnacle Representatives and members of the Pinnacle Pro Group (as defined below) may invest in securities of issuers that are sold through Pinnacle, and accordingly, may own securities as held by Pinnacle clients, including their own client. This may represent a potential conflict of interest, and in such circumstances, a Pinnacle Representatives will treat their clients honestly, fairly and in good faith, subject to applicable securities laws. For additional information, please see Section 11.

Commission Structures

Pinnacle is compensated by an issuer whose securities we sell which compensation is split with our Representatives in accordance with an agreement we have with them. Potential commission conflicts may exist in the types of securities you purchase from us, which vary per issuer, and among the securities sold by an issuer.

The selection of up-front commission vs. low load and trailer commissions may be a potential conflict because: (a) the up-front commission results in higher initial payment of commission versus a lower up-front commission with an annual trailer fee paid; (b) up-front commissions reduce the net amount of proceeds of the investor which are invested into the product, making it more difficult for investors to recover their initial investment and potentially gain a return; and (c) the client must hold the product longer in the up-front commission option as compared to a low load option which is due to the amount of commission the issuer can recover each year.

For income products, the selection of a distribution or dividend reinvestment plan (“DRIP”) vs. cash distributions is also a potential conflict because: (a) the annual trailer commission may be paid on the total value of the investment which increases when a client selects a DRIP; and (b) although the DRIP proceeds are purchased at a discount to net asset value, each year those returns are subject to an annual trailer and as such the returns on DRIP monies may be lower than those of overall fund. Moreover, a conflict exists where the client holds the investment longer as trailers are continued to be paid to both the dealer and the dealing representative resulting in more funds being paid out and causing a negative effect on the net amount of proceeds invested over in comparison to the deferred sales charge fee.

Other potential commission conflicts of interest include the following: (a) there is no common commission grid that issuers are required to pay us and our Representatives, and the types and amount of compensation vary by issuer and, among the securities offered by an issuer; (b) we or your Representative may have motivations to recommend a product where we are paid greater compensation, or favour those issuers who may also pay us contingent or other compensation, if earned and (c) as we receive different types of compensation, it also impacts the net amount received and invested by the issuer, and/or the valuation of your investment. 

Such potential conflicts are addressed by us as follows: (a) we will inform you of the fees, commissions, and other compensation in advance so that you know what you will be paying. This is disclosed to you in various ways, including in an issuer’s offering documents and, for greater transparency, in Pinnacle’s Offering Memorandum Acknowledgement Form; (b) we are required by industry regulations and firm policy only to make “suitable” investment recommendations, in line with your investment objectives, investment knowledge, time-horizon and risk profile, as well as the information available to us and your Representative, as set-out in, among other documents, your ‘Know-Your-Client Form’ that you complete with your Representative and sign; and (c) although compensation offered by issuers varies, we have a: (i) duty to act fairly, honestly and in good faith in all dealings with you, including, putting your interests first, when determining whether an investment is suitable for you, and acting in your best interest in connection with any material conflicts; and (ii) a fixed commission grid with each of our Representatives that does not vary per issuer even though certain issuers pay a higher commission or have different compensation arrangements than others.

Mutual Fund Clients

Related and Connected Issuers

Pinnacle is not a related or connected party to any mutual fund issuer.

Commission and Compensation

Pinnacle, as a Mutual Fund Dealer, is compensated through the Fees and Charges as disclosed in - See “Pre-Trade Disclosure of Investor Charges- Mutual Fund Clients”.

Pinnacle is compensated by the Fund Companies based on commissions that are to be pre-disclosed to you through receipt of the Fund Facts. Commissions paid to Pinnacle by the Fund Companies are then split with your Representative. Potential commission conflicts may exist based on the funds purchased due to varying commissions.

Additionally, the annual trailer paid, if applicable, may be paid on the total value of the investment which increases when a client selects a DRIP.

Such potential conflicts are addressed by us through delivery of the Fund Facts.

Where a client has entered into a Fee Agreement, within a Nominee Account, Pinnacles only compensation is the fee and receives nothing from the Mutual

 

Fund Company.

Where a client selects to invest in an Alternative Investment the commission structure earned is similar if not the same as previously declared.

Power of Attorney

Dealing Representative cannot act as a trustee, executor or otherwise have full or partial control or authority over the financial affairs of a client (e.g. Power of Attorney, Executor/Executrix of an Estate), unless the client is a “related person” as defined by the

Income Tax Act (Canada) and the trade is subject to an Additional Suitability Review. For purposes hereof, “Additional Suitability Review” means the trade is approved in advance and in writing by Pinnacle’s CCO [or designate]

OUTSIDE ACTIVITIES OF, AND PERSONAL FINANCIAL DEALINGS WITH, YOUR PINNACLE REPRESENTATIVE

Your Pinnacle Representative may have other gainful occupations or outside activities that may be permitted by Pinnacle and applicable securities law. Your Pinnacle Representative must receive prior approval from us to engage in other gainful or outside activities. If we determine that this occupation or activity may present a conflict of interest that can be resolved through proper disclosure, your Pinnacle Representative will provide you with that disclosure in accordance with applicable securities law. You should be aware that your Pinnacle Representative may provide other products or services that are outside of his or her securities related business activities that are not part of Pinnacle’s business activities. Such examples might include the sales of insurance products including segregated funds, accounting, bookkeeping or tax preparation services. These products and services are not considered securities related and are the responsibility of that individual alone and not Pinnacle. In the case of insurance products, including life products or segregated funds, they may be sold by your Pinnacle Representative in his or her capacity as a licensed insurance agent and processed through an agency related and/or unrelated to Pinnacle.

Pinnacle has established Pinnacle Wealth Planning Inc. (“Pinnacle Wealth Planning”) that is an associate general agency, which has a relationship with a managing general agency that is involved in the distribution and sale of life insurance. Pinnacle Wealth Planning and Pinnacle are separate legal entities and involved in separate and different businesses and the business of Pinnacle Wealth Planning shall not be construed as the business of Pinnacle where an individual is a Pinnacle Representative and a licensed life insurance agent working with Pinnacle Wealth Planning.

Pinnacle does not make any representations or warranties and assumes no liability in connection with any other gainful occupations or outside business activities engaged in by your Pinnacle Representative. In connection with the provision of these additional services, your Pinnacle Representative may be required to provide you with certain disclosures or the name of the company or organization providing the products or services and your Pinnacle Representative’s relationship to them.

Pinnacle addresses potential material conflicts involving your Representative’s outside activities through applicable securities law and our policies and procedures, including disclosure to you in a document you sign.

Representatives should not have any personal financial dealings with investors (including borrowing or lending to clients) except in very limited circumstances. We have policies and procedures to address such matters.

FAIR ALLOCATION OF INVESTMENT OPPORTUNITIES IF OVERSUBSCRIBED RELATIVE TO PINNACLE PRO GROUP & PINNACLE REPRESENTATIVES SERVING ON BOARDS AND ACCESS TO MATERIAL NON-PUBLIC INFORMATION

Pinnacle’s employees, directors, officers, and Representatives (the “Pinnacle Pro Group”) may be purchasers of the securities that are promoted and sold by us to potential investors. Investments are sold by Pinnacle on a first-come-first-served basis. If an offering of third-party investment products or those created and promoted by Pinnacle [a proprietary product] are over-subscribed, Pinnacle clients will have an opportunity equal to other clients and be sold on a pro-rata basis, and in priority to any member of the Pinnacle Pro Group.

We may receive limited allocations of securities we sell from certain issuers and may not be able to generally offer them to all investors. We may prefer allocating such limited offerings for sale by certain Representatives to certain investors. Accordingly, you may not be aware or receive an allocation and are treated differently than other investors in connection with limited offerings. We address such potential conflicts as follows: (a) Representatives make the determination based on individual client eligibility to purchase limited offerings; and (b) suitability of the investment to any particular client, as well as client priority are both fundamental considerations. Payments are made in accordance with Pinnacle’s policies and procedures where, among other things, allocations may not be influenced by guarantees of future business.

Client priority is determined by the sequence in which Pinnacle receives fully completed and signed documents, confirms the availability of funds and completes a positive suitability review for a trade involving a limited offering. For example, a trade submitted first would not be in priority if deficient documents were submitted or unsigned until amended and resubmitted accordingly to Pinnacle Compliance.

Members of the Pinnacle Pro Group may have access to confidential and/or non-public information about an issuer that you may not have which information advantage over existing and new investors may be a potential conflict of interest. In circumstances where a Representative has invested in securities of an issuer, along with other Pinnacle investors, they may potentially seek to redeem their investment ahead of Pinnacle clients if they have access to confidential and/or non-public information. 

Pinnacle Pro Group members may also act as board members of private or public companies. This may pose a conflict of interest in circumstances where Pinnacle distributes securities of such companies where a Pinnacle Pro Group member is an officer and/or director, including proprietary products.

We address such potential material conflicts as follows: (a)  we have policies and procedures that address such matters; (b) we comply with securities legislation that prohibits an individual from serving as a director of another registered firm that is not an affiliate of our firm; (c) we maintain the confidentiality of any confidential and/or non-public information in accordance with applicable laws and any agreements we have entered into; and (d) Pinnacle does not control redemptions paid by an issuer or the redemption process. An investor must redeem directly with an issuer, subject to any redemption notice period, redemption fees, cash limits or otherwise, as disclosed in an issuer’s offering documents. However, Pinnacle Corporate Finance generally provides periodic updates to our Representative and investors at the same time so all material information is publicly available.

REFERRAL & INTRODUCTION ARRANGEMENTS

We may enter into referral or introduction arrangements from time to time with third parties or related parties pursuant to which we refer clients to another entity and receive a fee or another entity refers clients to us for which we pay referral fees. There is a potential conflict that we may refer you to referral parties since we receive a referral fee or to referral parties that pay us a higher referral fee. applicable securities law regulates our referral arrangements which are also set out in our policies and procedures.

The details of these referral arrangements, including the parties to the referral arrangement, the manner in which the referral fee for services is calculated, and the party to whom it is paid will be provided to you in a separate document.

Note that within the province of Quebec, a share of commission including from a referral arrangement is only allowed where the referral partners are both registrants. However, a one time introduction fee of a flat amount is permitted.

ACCESSING YOUR DOCUMENTS ON OUR CLIENT PORTAL& HOW WE REPORT TO YOU

Accessing Your Documents Through our Client Portal(s):

  1. Exempt Edge, for Exempt Market Dealers only;

  2. VieFund (for Mutual Fund Dealers only; or any other system that we may choose to use in the future).

  3. Ndex (for PAM clients only; or any other system that we may choose to use in the future).

Client reporting is done through a client portal provided through third-party vendors. They are called Exempt Edge for Exempt Market Clients,  Viefund/My Portfolio for Quebec Mutual Fund Clients, and Ndex for PAM clients, that you can access at:

Exempt Edge https://pwb.exemptedge.com/login

or

VieFund  https://www.pwb-viefund.ca/myportfolio/

or

Ndex https://f-engine.ndexsystems.com/fengine/fullservice/en/pinnaclewealthlogin.go

In addition, nominee client accounts may access their documents through the Agora client platform or any other third-party vendor system that we may choose to use in the future.

A unique e-mail address and password is required to access the portal(s) where certain documents, including Subscription Documents, KYC Documents, Order Forms, trade confirmations and Account Statements will be reasonably made available to you. When such documents are uploaded for your viewing and printing, an email will be sent to you providing you notice that a new document has been put into your portal. Please be sure this email is not blocked by your spam filter. 

Where you do not have e-mail or do not want to view documents electronically, Pinnacle still offers you the option to receive your reports by mail. Please ensure your Know-Your-Client form correctly reports your full residential address and e-mail address that allow Pinnacle and your Representative, to communicate through. You are required to notify Pinnacle of any change in your e-mail address or postal address by notifying your Pinnacle Representative in writing.

For purposes of this Section ”Accessing Your Documents on our Client Portal and How We Report to You”, the following capitalized terms have the meaning as set out below:

“KYC Documents” means your Know-Your-Client Form, this Relationship Disclosure Information Form, your Account Trade and Order Form(s) and the Seniors Enhanced Suitability and Leverage Acknowledgement, as applicable;

“Reasonably made available” means a password protected website accessible by all clients (i.e., Exempt Edge) that allows you, our client, to receive or access documents, including your Subscription Documents, KYC Documents and Account Statements; and

Subscription Documents” for exempt market clients-means your subscription agreement and all attached schedules, the issuer’s offering document which includes, but is not limited to, the, Risk Acknowledgement, OM Acknowledgment and Related and Connected Issuer where applicable.

“Order Forms” for mutual fund clients- means your order form whereby you agree and authorize a mutual fund transaction.

 

How We Report to You

We report to you through trade confirmations and account statements that are discussed below.

Trade confirmations

Upon completing your investment, a trade confirmation will be reasonably made available to you confirming certain information through the client portal unless otherwise specified by you the client.

Pinnacle is not required to deliver a trade confirmation where the following apply:

a) you have given prior written notice that the transaction is made pursuant to the client’s participation in an automatic payment plan, including a dividend reinvestment plan, or automatic withdrawal plan in which the transaction is made at least monthly;

b a trade confirmation was delivered to you for the first transaction made under the plan;

c) the transaction is in a security of a mutual fund

 

Account statements

  • Account Statement – At least once every three months unless you advise us in writing that you want to receive it monthly, an account statement will be reasonably made available to you that reflects your transaction history with Pinnacle so long as you have an on-going relationship with Pinnacle. Your quarterly account statement will include information about each transaction during the reporting period including: (a) the date of the transaction, where possible; (b) whether the transaction was a purchase or redemption; (c) the name of each security; (d) the price per security; (e) securities purchased; (f) currency of the transaction; (g) the total cost value of the transaction; and (h) the name and quantity of each security in the account

  • Annual Account Statement – Your annual account statement will also be reasonably made available to you in conjunction with your end of year quarterly statement. Pinnacle as a dealer is required to provide you with a report on charges and other compensation containing certain information, such as commissions and trailer fees received from  the issuer to Pinnacle during the applicable period, except that the first report delivered after a client has opened an account, which may cover a period of less than 12 months.

  • Investment Performance Report – Pinnacle is required to deliver an investment performance report to a client every 12 months, except that the first report delivered after a client’s initial trade may be sent within 24 months.

  • The requirement for an Investment Performance Report is not applicable to those accounts that have existed less than 12 months.

  • The requirement for an investment performance report is not applicable to those accounts in which Pinnacle executes trades only as directed by a registered adviser acting on behalf of you, the client.

Where an investment is illiquid and does not trade on a public market the current market value (CMV) for Investment Performance Report(s) is replaced by Net Asset Value (NAV). NAV is determined by the Issuer based on calculation methods declared in the offer documents. Where Pinnacle does not accept the NAV pursuant to regulations, Pinnacle reserves the right to determine a value to report in place or state as non-determinable (ND).

Account Statements and Annual Reports will be provided through the client portal unless otherwise specified by you the client.

PERFORMANCE BENCHMARKS AND HOW TO USE THEM

You may assess the performance of your investments by comparing them to an investment performance benchmark. Benchmarks show the performance over time of a select group of securities. There are many different benchmarks. When choosing a benchmark, pick one that reflects your investments. For example, the S&P/TSX Composite Index follows the share prices of the largest companies listed on the Toronto Stock Exchange. This index would be a good benchmark for assessing performance of a Canadian equity fund that invests only in large Canadian companies. It would be a poor benchmark if your investments are diversified in other products, sectors or geographic areas.

Please speak to your Representative if you have questions about the performance of your portfolio or what benchmark(s) might be appropriate for you.

We do not use benchmarks - We note that Pinnacle does not use benchmarks to track your exempt market investment performance. A benchmark is a standard against which the performance of your securities may be measured such as a stock index. Exempt market securities are generally illiquid securities that are not actively traded in any marketplace that would allow you to determine the current market price or last bid and ask on a regular and reliable basis. Accordingly, measuring against such public market benchmarks could be misleading.

You are responsible for advising Pinnacle of any redemptions or changes in your holdings with an issuer whose securities were sold to you by Pinnacle - We note that Pinnacle may not be aware of any change in your securities holdings through any redemptions you make with an issuer and/or additional securities you acquire from an issuer under a distribution reinvestment plan or similar type of plan. Our administration systems may not be real-time linked with all of our issuers or every trust company, but our systems are evolving. Accordingly, this information may not be reflected in your Pinnacle Account Statement unless you advise us of any change in your holdings with any issuer whose securities were sold by Pinnacle to you. If you buy or redeem/sell your securities, please advise your Pinnacle Representative in writing or contact us at: admin@pinnaclewealthbrokers.ca.,  so we may update your Account Statement accordingly. Furthermore, if the information on any trade confirmation or Account Statement you receive from us is inaccurate for any other reason, please contact Pinnacle’s Compliance department immediately at: admin@pinnaclewealthbrokers.ca Pinnacle relies on the information provided to us  since issuers do not regularly update us, if at all, in connection with any securities that were originally sold to you by Pinnacle.

COMPENSATION PAID TO PINNACLE AND PINNACLE REPRESENTATIVES

Pinnacle, as an EMD, earns revenue from the sale and distribution of exempt market securities that are generally paid to us by the issuer of the securities you purchased.

The commissions and fees that Pinnacle charges are disclosed in an issuer’s offering document, such as its offering memorandum, and Form 45-106F4 – Risk Acknowledgement Form when securities are sold to you pursuant to the offering memorandum prospectus exemption, [which documents are provided to investors] and include the following:

Admin Fee: the portion of the commission paid, as stated below that is retained by Pinnacle and not paid out to the Representative.

Commissions paid on or about the closing date: On or about the closing date of each transaction, Pinnacle, as an EMD, is paid commissions ranging between 0% and 14.2% of the aggregate purchase price of an investment, that is shared between our Representatives and us. The amount of commissions paid varies by issuer depending on a number of factors, including the type of security sold, the type of business, the amount raised, other fees paid by the issuer and other factors.

Trailing commissions paid monthly, quarterly or annually post -closing: Pinnacle may also be paid a deferred or trailing commission of up to 2.0% of capital raised or net asset value per annum by certain issuers which is a monthly, quarterly or an annual fee, which varies per issuer, and paid for as long as you continue to hold the investment. Pinnacle, as an EMD, may receive a trailer fee based on a certain percentage of your investment held by an issuer. The amount and the calculation of these deferred or trailing commissions will be set out in the offering document of the issuer providing such compensation.

Performance fee/carried interest – Pinnacle may also earn or receive as part of its compensation an equity, participation or carried interest in certain offerings that it shares, in part, with Pinnacle Representatives. Such fee or interest may be in the form of broker warrants, profit participation or a carried interest in connection with the investment.

Negotiated fee - Pinnacle and/or Pinnacle Representative may also charge a negotiated fee for selling F-class or similar types of securities that are payable directly by a client.

Pinnacle, in its capacity as a PM, may also receive a management fee and a performance fee, if earned, as PM and manager of any proprietary products sold by Pinnacle. Such fees may be up to 2.0% of assets under management of a particular fund.

The fees that Pinnacle, as an EMD, charges, or may charge, that may not be reflected in any offering document, but are set out in an agreement with an issuer, are as follows:

Corporate finance due diligence fee: Pinnacle is generally paid an initial corporate finance due diligence fee from each issuer whose securities may or may not be sold by Pinnacle. Such amounts may be paid up-front, or upon achieving certain milestones such as the completion of reviews, initial closings etc. Notwithstanding the foregoing, Pinnacle may also charge an issuer a fee a due diligence and Representative services provided to the issuer during the capital raising process, which may be in in lieu of or addition to a portion of the -up-front due diligence fees Pinnacle charges an issuer.

In connection with any ongoing due diligence of an issuer, Pinnacle may also be paid an additional corporate finance fee.

Lead Dealer fee – In certain circumstances, Pinnacle may be also paid an advisory services fee in an amount to be negotiated between the parties for services offered outside the scope of its corporate finance fee. Such fees may be for assisting in the structuring and development of a potential investment prior to, or as part of, engaging Pinnacle to undertake its due diligence review or in connection with other non-due diligence services. Such a fee may be in addition to, or in lieu of, Pinnacle’s corporate finance fee. The advisory fee would generally represent less than 1.0% of the total capital raised.

Mergers & acquisition fees – Pinnacle may also charge certain issuers fees which are not related to due diligence or advisory services. Such fees may be in connection with merger and acquisition transactions, institutional debt placement or equity placements.

Marketing fees – Pinnacle may also receive a marketing fee from certain issuers, in lieu of its annual update fees and conference fees of up to 0.5% of gross capital raised.

Wholesaling fees – Pinnacle may also receive a wholesaling fee for providing wholesaling services to certain Related and Connected Issuers. See above “Section  Conflict of Interest – Related and Connected Issuers”.

Referral fee: Pinnacle has various referral agreements in place with investment fund managers and portfolio managers registered under applicable securities law in Canada.  See also Section “Referral Arrangements”.

Issuer paid reimbursement, benefits or Sales Incentives: Pinnacle and certain Pinnacle Representatives may also receive reimbursement payments  from issuers for certain marketing and/or product training and education activities , including but not limited to, paying for: (a) investor seminars, dinner meetings or similar event where one or more issuers provide a presentation to investors and/or product training and education to Pinnacle Representatives including at Pinnacle’s annual conference and/or other conference, meeting or event; (b) an association sponsored event (that may be sponsored by one or more issuers on Pinnacle’s product shelf and who may pay the costs of admission of a Pinnacle Representatives to attend such event); (c) domestic or foreign trips, food, beverages and accommodation in connection with due diligence trips where a Pinnacle Representative may accompany a potential investor; and/or,(d)  entertainment, including the provision of tickets to concerts, theatre or sporting events, or the ability to participate in events such as golf tournaments subject to Pinnacle’s gifting policy. These payments are meant to cover the cost of the activity and/or event.  These payments may be viewed as potential conflicts of interest and are subject to Pinnacle’s Conflict of Interest Policy.

Compensation related conflicts and how they may impact you include the following:

  1. there is no common commission grid that issuers are required to pay us and our Representatives, and the types and amount of compensation vary by issuer and, among the securities offered by an issuer. This may impact our investment recommendations;

  2. we or your Representative may have motivations to recommend a product where we are paid greater compensation or favour those issuers who may also pay us contingent or other compensation, if earned; and

  3. as we receive different types of compensation, it also impacts the net amount received and invested by the issuer, and/or the valuation of your investment. 

Pinnacle addresses compensation conflicts as follows:

  1. we have policies and procedures that address such matters, that include the giving or receiving of gifts from issuers;

  2. will inform you of the fees, commissions, and other compensation in advance so that you know what you will be paying. This is disclosed to you in various ways, including in an issuer’s offering documents and, for greater transparency, in Pinnacle’s Offering Memorandum Acknowledgement Form;

  3. we are required by industry regulations and firm policy only to make “suitable” investment recommendations, in line with your investment objectives, investment knowledge, time-horizon and risk profile, as well as the information available to us and your Representative, as set-out in, among other documents, your ‘Know-Your-Client Form’ that you complete with your Representative and sign;

  4. although compensation offered by issuers varies, we have a:

    1. duty to act fairly, honestly and in good faith in all dealings with you, including, putting your interests first, when determining whether an investment is suitable for you, and acting in your best interest in connection with any material conflicts; and

    2. fixed commission grid with each of our Representatives that does not vary per issuer even though certain issuers pay a higher commission or have different compensation arrangements than others;

  5. our compensation must consider current market conditions, market value and the specific securities being offered which impact the commission paid, which varies per issuer. We monitor the investment products we sell as part of our product due diligence and consider the compensation structures and fees of those products as a way to reduce any material conflicts and ensure each commission option has a situation where it would be most appropriate based on your personal situation; and

  6. we seek to structure issuer sponsored events and/or training so they do not influence our recommendations. Pinnacle requires all issuers whose securities it sells to sponsor its events so one issuer is not preferred over another as a way to offset our costs as well as provide the same opportunity for all issuers to present and hold client calls throughout each year. Payments are based on a flat amount per Representatives registered with us and paid by all issuers whose securities are in distribution with Pinnacle.

 

Pinnacle, as a Mutual Fund Dealer, is compensated through the Fees and Charges as disclosed in - See “Pre-Trade Disclosure of Investor Charges- Mutual Fund Clients”.

Clients Pay a fee directly to Pinnacle Asset Management from their account(s). The fee compensates: PAM and the PM for the portfolio management services, the custodian for holding and administering the securities in your portfolio, as well as any fees that need to be collected and remitted directly by PAM to a third party for portfolio management activities. Additional fees maybe embedded within certain investments chosen by your PM, however neither PAM nor your PM receives any form of additional renumeration or other advantages as a result.  

If you have any questions on how Pinnacle or your Pinnacle Representative is paid, please ask us. We encourage you to read the fees and expenses in connection with any securities you purchase that are set out in the offering document of the issuer that you are provided with before you purchase their securities.

PINNACLE ASSET MANAGEMENT REPORTING

PAM will provide you with a statement of account(s) holdings and activity on a quarterly basis. The statement will show both the market and book value of securities held in your managed account and provide other mandated disclosures. 

You will also receive, on an annual basis, a performance report that details the change in the value of your account (or family of accounts) during the year and since inception of the account. That report will also show the percentage return earned on the account (or family of accounts) for the year and other specified periods.

Finally, you will receive, on an annual basis, a summary of all the management fees charged to you by PAM with respect to your managed account(s). As well as a summary of any management fees or charges withdrawn directly from any investment fund. 

You have consented to receive electronic delivery of the above notices and any other notice that PAM is obligated to send.  Such electronic delivery will be made to the contact e-mail provided in the CIS.   

You may also request at no cost, a paper copy of any documents that have been delivered electronically by contacting the CCO. Your consent to receive such materials through e-mail may also be revoked or changed at any time by notifying the CCO. Contact details are set out under part VII below. 

In addition to this reporting, the custodian, CQSI will provide you with a separate reporting on your managed account(s) holdings, pursuant to their regulatory obligations.  You will receive statements for your account:

  • On a quarterly basis or you have requested to receive monthly statements;

 

Tax Slips

Any tax slips related to your accounts will be sent to you via CQSI to the address on file for your account(s).  These include but are not limited to; T3s T5s, RRSP contributions, RRIF withdrawals, etc.  

ELECTRONIC E-MAIL COMMUNICATION

Pinnacle or your Pinnacle Representative request that communications with us be conducted by e-mail. The transmission of account information and instructions via electronic mail presents unique risks to both parties. The following is a sample (non- exhaustive) list of these risks:

Failure to receive account information. Information may be delivered and not received by the intended recipient. This may be due to technical issues in transmission, misdirection or failure to properly identify the information received.

Inability to clarify information on a timely basis. Where information is received and reviewed by the intended recipient, it may not be possible to contact you on a timely basis to clarify vague or incomplete information.

Lack of client confidentiality. Transmission of client information via electronic mail is not necessarily secure or encrypted. No guarantee can be made as to privacy of client information transmitted via e-mail.

Inability to confirm the message was sent by you. Receipt of communications via electronic mail does not permit the intended recipient to confirm with certainty that the instructions are provided by the authorized person.

By providing your e-mail address to Pinnacle or your Pinnacle Representative, you confirm you understand and appreciate the risks in communicating via electronic mail. Notwithstanding these risks, you have elected to send or receive information via electronic means and accept all risks associated with this means of communication, including the risk that such direction may not be received by the intended recipient. You understand that if you do not receive prompt confirmation from Pinnacle or your Pinnacle Representative regarding the receipt of an e- mail message, it is your responsibility to follow-up with Pinnacle and/or your Pinnacle Representative to ensure that such information was received as intended.

Communications over the Internet, including instant messages, cannot be guaranteed to be secure or error-free. Instant messages and their attachments are subject to being intercepted, becoming corrupted, getting lost or delayed, or to containing viruses. Therefore, neither the sender nor Pinnacle accepts any liability for any errors or omissions in the content of this message or problems in its transmission arising as a result of its transmission over the Internet.

You may elect to opt out of receiving any electronic communication from Pinnacle or its Representatives by contacting Pinnacle  in writing at:  admin@pinnaclewealth.ca

 

ELECTRONIC SIGNATURES AND E-COMMERCE

What is Electronic Signature - Pinnacle is committed to carrying on business in the most efficient and effective way possible and has adopted an E-Signature Policy to allow for the use, and acceptance of, electronic signatures in lieu of manual signatures, to the extent permitted by law and the applicable securities law.

Under the PIPEDA, an electronic signature or “E- Signature” means “a signature that consists of one or more letters, characters, numbers or other symbols in digital form incorporated in, attached to or associated with an electronic document/electronic information that a person creates or adopts in order to sign a document and that is in, attached to or associated with the with the document.”

Use of Our Electronic Signature Platform - For the protection of our clients, Pinnacle is only able to accept E-Signatures executed through its E-Signature platform within the applicable third-party vendor, whereby an audit log is available showing when the client viewed and signed the document, and with which e-mail address. Therefore, use of the E-Signature platform requires you to provide a unique e-mail address and provide meaningful consent for Pinnacle and its affiliates to communicate through the e-mail you provided to us. Additionally, upon signing in to Pinnacle’s E-Signature platform, you are required to complete an acknowledgement whereby you consent to transact business using electronic communications, to receive notices and disclosures electronically, and to utilize E-Signatures in lieu of using paper documents. E-Signatures do, however, present the risk of misuse and loss of control if not administered properly. This can occur if E-Signatures are applied by an individual not authorized to access your email or the sharing of emails and passwords

Your Responsibility - It is your responsibility, as the client, to immediately notify Pinnacle and or your Representative, in writing, should you become aware that your email and/or password has been compromised or you are unable to access the information in Pinnacle’s client portal as executed by yourself. Additionally, you, the client, are responsible for maintaining a unique e-mail address in order to access Pinnacles client portal to electronic sign documents and to ultimately review signed documents for their accuracy.  See above “Section - Accessing Your Documents on our client Portal and How We Report to You.”

PIPEDA AND CASL - Pinnacles use of E-Signatures is in compliance with the Personal Information Protection and Electronic Documents Act (Canada) (“PIPEDA”) and Canada’s Anti-Spam Legislation (“CASL”), that requires firms, in certain instances, to obtain a client’s express written consent  to receive commercially electronic messages (“CEMs”). At any time, you, the client, can request that Pinnacle stop sending you CEMs. However, in doing so you, will no longer be able to use Pinnacle’s client portal or E-Signature Platform and all information will be provided to you by mail via Canada Post.

PINNACLE’S COMPLAINT POLICY

What is a complaint?

A “complaint” is a complaint that relates to a trading or advising activity of Pinnacle or a Pinnacle Representative. Pinnacle takes all complaints seriously and encourages clients to file any complaint as soon as possible to avoid clients filing claims outside the 6-year time limit for the availability of having a complaint reviewed by the Ombudsman for Banking Services and Investments and/or within any applicable statutory limitation period(s).

A complaint involves one of the following:

  • a trading or advising activity;

  • a breach of client confidentiality;

  • theft, fraud, misappropriation or forgery;

  • misrepresentation;

  • an undisclosed or prohibited conflict of interest; or

  • personal financial dealings with a client.

Pinnacle may request that a complainant put any complaint in writing.

What to do if you have a complaint:

Pinnacle has procedures in place to handle any written or verbal complaints received from clients in a fair and prompt manner, which is set out below.

 

Filing a complaint with us  

If you have a complaint about a product we sell or our services, please contact Pinnacle’s Chief Compliance Officer:

You may want to consider using a method other than email for sensitive information.

  • Tell us - Tell us what went wrong, when it happened and what we can do to remedy the situation.

  • We will acknowledge your complaint - Pinnacle will acknowledge your complaint within five (5) business days of receipt, excluding office closures due to statutory holidays and one office closure during the December Holiday Season (approximately two weeks), and provide you an update in writing advising how the complaint is being dealt with, who to contact if you require further information, and when you can expect a response. We may ask you to provide clarification or more information to help us resolve your complaint.

  • We will provide our decision - We normally provide our decision in writing, within 90 days of receiving a formal complaint. It will include a summary of the complaint, the result of our investigation and our decision to make an offer to resolve the complaint or deny it, and the explanation of our decision.

  • If our decision is delayed - If for any reason we cannot provide you with our decision within 90 days, we will inform you of the delay, explain why our decision is delayed and give you a new date for our decision. You may be eligible for the independent dispute resolution service offered by the Ombudsman for Banking Services and Investments (“OBSI”).

  • If you are not satisfied with our decision - You may be eligible for OBSI’s dispute resolution service.

  • Taking your complaint to OBSI - You may be eligible for OBSI’s free and independent dispute resolution service if we do not provide our decision within 90 days after you made your complaint or you are not satisfied with our decision.

OBSI can recommend compensation of up to $350,000. OBSI’s service is available to Pinnacle clients. This does not restrict your ability to take a complaint to a dispute resolution service of your choosing at your own expense, or to bring an action in court. Keep in mind there are time limits for taking legal action.

Who can use OBSI? –

You have the right to use OBSI’s service if:

  • your complaint relates to a trading or advising activity of Pinnacle or by one of our Representatives;

  • you brought your complaint to us within 6 years from the time that you first knew, or ought to have known, about the event that caused the complaint; and

  • you file your complaint with OBSI according to its time limits below.

Time limits apply: If we do not provide you with our decision within 90 days, you can take your complaint to OBSI any time after the 90-day period has ended. If you are not satisfied with our decision, you have up to 180 days after we provide you with our decision to take your complaint to OBSI.

 

How you can file a complaint with OBSI:

The process for filing a complaint with OBSI is discussed below.

  1. Contacting OBSI – You can contact OBSI:

o       by telephone: 1-888-451-4519 or 416-287-2877 in Toronto

  1. OBSI will investigate - OBSI works confidentially and in an informal manner. It is not like going to court, and you do not need a lawyer. During its investigation, OBSI may interview you and representatives of Pinnacle. We are required to cooperate in OBSI’s investigations.

  2. Information OBSI needs to help you - OBSI can help you best if you promptly provide all relevant information, including:

    • your name and contact information

    • Pinnacle’s name and contact information

    • the names and contact information of any of our Representatives who have been involved in your complaint

    • details of your complaint

    • all relevant documents, including any correspondence and notes of discussions with us

  3. OBSI will provide its recommendations - Once OBSI has completed its investigation, it will provide its recommendations to you and us. OBSI’s recommendations are not binding on you or us. OBSI can recommend compensation of up to $350,000. If your         claim is higher, you will have to agree to that limit on any compensation you seek through OBSI. If you want to recover more than $350,000, you may want to consider another option, such as legal action, to resolve your complaint.

  4. Information about OBSI - For more information about OBSI visit www.obsi.ca

  5. If you are a Quebec resident - If you are not satisfied with the outcome or with the examination of your complaint, you may ask us, at any time, to transfer the file to The Autorité des marchés financiers (the “AMF”). Filing of a complaint with the AMF does not interrupt the prescriptive period for civil remedies. For questions concerning their examination process of complaints, please contact the AMF information centre at 1-877-525-0337 or information@lautorite.qc.ca.

Pinnacle complies with the rules governing the protection of personal information when transferring files to the AMF. A complaint file must be comprised of the written complaint (including the reproach made to the registrant, the actual or potential and the corrective action requested), the result of the complaint process (analysis and supporting documents) and our final written response to the complainant.

Twice a year, Pinnacle has the obligation to transmit a report stating the number and nature of the complaints received to the AMF, whether or not it has received complaints (by July 30, for data collected between January 1 and June 30; by January 30, for data collected between July 1 and December 31).

PINNACLE’S PRIVACY POLICY - Personal Information Protection and Electronic Documents Act (Canada) (“PIPEDA”)

What is our Privacy Policy –

 

Pinnacle’s Privacy Policy describes how we collect, hold, use and disclose your personal information when we do business with you. Pinnacle’s Privacy Policy is provided in compliance with PIPEDA and, where applicable, similar provincial privacy legislation. Please contact us through one of the means listed at the end of this Privacy Policy if you have any questions.

What is "personal information"?

The personal information collected about you for the purposes identified in our Privacy Policy is held in our records. Your “personal information” may include your name, address and telephone number, social insurance number, birth date, account holdings, and the name, address and social insurance number of your spouse and any beneficiaries. Depending on the investment products or services you request, additional personal information may be held in our records. Personal Information does not include the name, title or business address or telephone number of an employee of an organization.

 

Who is our Chief Privacy Officer?

Pinnacle’s Chief Compliance Officer is also our Chief Privacy Officer who is responsible for overall privacy governance. All of our employees and Representatives are responsible to maintain your privacy and are available to address any questions or concerns you may have.

 

How are we accountable?

Pinnacle is responsible for your personal information in its possession or custody, including personal information that has been transferred to, or received from, a third-party in the course of commercial activities for processing or other purposes for which you have consented.

 

What information do we collect?

Most of the information we collect is directly from you. We obtain your personal information from the “Know-Your-Client” Form and related schedules you complete with your Pinnacle Representative when you open an account with us, subscription agreements and related schedules you complete, and the books and records maintained by Pinnacle and your Pinnacle Representative based on our discussions with you. We may also collect financial and other information about you from a variety of sources including from: transactions you have made with or through us, credit reporting agencies and other financial institutions.

 

When you purchase a security, we will ask you to provide only the information that enables us to complete the purchase or sale of a security, to provide better service or to offer you products and services we believe you might be interested in.

Information about you

Information essential for fulfilling most financial requests and applications includes:

  • information establishing your identity, such as your name, address, phone number, title, business phone number, email address, date of birth, social insurance number or social security number (for tax purposes), and account numbers;

  • information related to transactions arising from your relationship with and through us, and from other financial institutions;

  • information you provide in a “Know-Your-Client” Form and related schedules for the provision of our products and services, such as your annual income, place of employment, investments, account balance, financial liabilities, transaction history;

  • information about financial behavior such as your payment history and credit worthiness;

  • information pertaining to business clients will include your business name, address, phone number, email address, industry type, financial status and detail(s) on the owner(s), operator(s) and director(s); and

  • additional information may be requested to help us determine your eligibility for products and services that we offer.

 

Why did we do that?

We collect, use and disclose personal information in order to provide you with the products and services that will help you to   meet all of your financial goals. Knowing you helps us to understand your wealth management needs, communicate effectively with you, and provide you with suitable services and products. Specifically, we collect, use and disclose your personal information to:

  • verify your identity;

  • determine your eligibility for investment products and services sold by Pinnacle, and for products that may be of interest to you from affiliates of Pinnacle and/or business partners with whom we have formed an association, and offering to you these products and services;

  • manage our risks and operations;

  • analyze the suitability of our products or services for you;

  • provide you with ongoing services, establish and maintain communications, and to respond to your inquiries;

  • communicate with you and send you information in connection with ongoing investment opportunities;

  • determine fees and expenses;

  • investigate and settle complaints;

  • detect and prevent fraud;

  • compile statistics, conduct market research and report to regulatory and industry agencies;

  • investigate specific transactions or patterns of transactions to detect unauthorized or illegal activities; and

  • comply with our legal and regulatory requirements. If we have your social insurance number, social security number we may use it for tax related purposes if you hold a product generating income and share it with the appropriate government agencies or issuers with whom you have purchased securities. We may also share it with credit reporting agencies as an aid to identify you, collectively, the “Identified Purposes”.  

Personal information may be collected, used or disclosed for any of these Identified Purposes. If your personal information is not needed for one of the Identified Purposes, we will not use or disclose it without obtaining additional consent from you. For further information about what information we collect about you and why, we refer you to Section  above- “Pinnacles’ “Know-Your Product”, “Know -Your Client” and Suitability Obligations””.

Additional uses

  • We may communicate with you through various channels including telephone, electronically, such as through e-mail or mail using the contact information you have provided.

  • With your consent, we may use your information to promote our products and services and that of third parties we select, which we believe you will be interested in.

  • In the event that your Pinnacle Representative is no longer with the firm, you consent to the disclosure of your personal information by Pinnacle to another Pinnacle Representative.

How do we collect your personal information generally?

The collection, use and disclosure of your personal information depends on how you do business with us. We may gather information from the following sources:

  • from you, your “Know-Your Client” Form and related schedules , or on other forms filled out through telephone, email or face-to-face interviews, such as your name, address, telephone number, email address, occupation and financial and banking; and

  • from your interactions with us, such as your transaction history and correspondence.

 

How do we collect your personal information from our website?

(a) Cookies

·Pinnacle collects information through our website, which you provide to us of your own accord when you submit forms or send us an email message using the links found on our website. We also collect personal information when you subscribe to our newsletter by using the newsletter subscription link on our website.  This information includes, but may not be limited to, your full name and email address. 

·Pinnacle’s web server uses cookies to track visitors to our website. A “cookie” is a text record of your visit sent to your browser and placed on your hard drive that identifies some technical characteristics of your browser so that our web server can remember information about you for future visits to our website. 

When you log onto Pinnacle’s website, it installs temporary cookies on your computer while you are logged onto the website. By registering to use Pinnacle, and/or by making any use of Pinnacle and/or any of the pages or information made available on Pinnacle you expressly acknowledge and agree that we use cookies, including for purposes such as:

  • collecting and compiling information like the number of visitors to our websites, where the visitors to our websites came from and the pages they visit on our websites;

  • delivering advertisements that are relevant to you and your interests and measuring the effectiveness of our advertising campaigns in order to provide you with personalized service; and

  • collecting your internet protocol address or other similar device identifier on the date you visit our websites (without collecting your name or other similar identifying information) so as to allow the website to recognize your computer or other similar device.

 

Pinnacle is not aware of, nor responsible for, the cookie practices of any third-party websites.

You can limit the collection of your information by disabling cookies on your browser. You may also be able to modify your browser settings to require your permission each time a website attempts to set a cookie. However, our websites (and many other websites) rely on cookies to enable certain functionality. If you choose to disable cookies, some of the services available on our websites may not work properly.

(b) Use of Third Parties

We may use third-party providers to help collect and compile information like the number of visitors to our websites, where visitors have come to our websites from and the pages they visit. Our third-party providers may also use cookies to deliver advertisements that are more relevant to you and your interests and to help measure the effectiveness of an advertising campaign. Third-party providers will not have access to your name or other identifying information.

 

Internet-Based Advertising

Interest-based advertising allows us to deliver advertisements that are more relevant to you and your interests. It works by showing you advertisements that are based on your browsing patterns and the way you have interacted with this and other websites.

As you browse our website, some of the cookies placed on your computer may be advertising cookies, so we can understand what sort of pages you are interested in. We can then display advertising on your browser that is based on these perceived interests. These cookies do not contain personal or financial information about you but may contain a unique identifier required by the retargeting process. If you access one of these ads, we may also track the response rate and the website activity associated with it.

We also work with third-party advertising providers who collect and use information about your visits to this and other websites (but not your name, email address, postal address or phone number) to show you advertising that may be of interest to you. This includes the advertising displayed on our websites and the Pinnacle advertising you may be shown when you are on other third-party websites.

Third-party Websites and Links

Our website may contain links to third-party websites. We are not responsible for the practices of those third-party websites. Where you access other websites from our website using the links provided, the operators of these websites may use cookies in accordance with their own policies, which may differ from ours. You should read their privacy and cookie policies carefully before you provide any personal information to them.

 

With which parties your personal information is shared

If you provide personal information to us or through any of the above sources, you do so with the understanding that your personal  information may be disclosed for the Identified Purposes amongst us, the above sources, or third parties and that Pinnacle may verify such information, or obtain additional personal information about you by checking with government agencies, credit bureaus, and other fact collecting and verifying entities to assist us for the Identified Purposes. For example, we may share your personal information with

  1. the issuer with whom you have purchased securities,

  2. with a third-party administration system where your personal information is electronically stored;

  3. a trust company, such as Olympia Trust Company or Computershare Limited, where you may have a registered account and where you used funds to purchase securities,

  4. one or more Canadian securities regulatory authorities upon request, in response to their compliance oversight of Pinnacle and our Representatives,

  5. a court order;

  6. to OBSI if you make a complaint;

  7. to affiliated entities of Pinnacle in connection with products or services information they may send to you;

  8. registrar and transfer agents, portfolio managers, dealers and other service providers with whom we have a relationship;

  9. The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) that allows this government agency to facilitate the detection, prevention and deterrence of money laundering and the financing of terrorist activities; and

  10.  other services providers, such our accountants or lawyers, if required in the operation of our business or otherwise.

 

Your knowledge and consent are required before we may collect, use or disclose your personal information, except in special circumstances, such as during a fraud investigation, an investigation by the police, in situations otherwise permitted by the law or as previously stated in this document.

How do you provide us with your consent?

We accept any of the following as your consent for Pinnacle’s existing use and future collection, use and disclosure of your personal information for the Identified Purposes:

  • your receipt of this Privacy Policy and signature acknowledging receipt of this document, unless you advise Pinnacle in writing, that you do not agree with the terms stated in this Privacy Policy, and that you wish to opt out of all or portions of it;

  • your unrestricted provision of information to Pinnacle;

  • your express written or oral consent as obtained through the completion of the “Know-Your-Client” Form and related documents involving a purchase of securities through us; or

  • your consent as provided by your authorized representative, such as a legal guardian or power of attorney.

In some circumstances, your consent may be implied. For instance:

  • if you obtain products and/or services for your family or anyone else, you represent that you have obtained consent from them to the collection, use and disclosure of their personal information for the Identified Purposes, even though they might not be present during the application process; and

  • if you have existing products and services with us and you request amendments to them, it is assumed that the consent which you gave to us when purchasing securities remains in effect.

 

How can you withdraw your consent?

You may withdraw your consent at any time upon reasonable notice, subject to legal or contractual restrictions. Please note, however, that withdrawing your consent may affect our ability to continue to provide you with the products and services that you have or would like to receive.

If you wish to withdraw your consent to this information sharing or discuss the implications of such a withdrawal, please contact our Chief Privacy Officer at the address or telephone number listed below. Unless we hear otherwise from you, you are giving to us your consent for the collection, use and disclosure of personal information as provided in this Privacy Policy for the Identified Purposes.

How long do we keep your personal information?

Your personal information is retained only so long as we need it to effectively provide products and services to you, and for a reasonable length of time thereafter in case we need to meet any potential obligations or legal or government requirements. Pinnacle shall use care when storing or destroying your personal information in order to prevent unauthorized access.

How do we protect your personal information?

Whether in electronic or paper-based format, Pinnacle maintains strict security systems to safeguard your personal information from unauthorized access, disclosure or misuse. As well, when we no longer need your personal information, we take as much care to destroy it as we do when storing it.

Pinnacle may transfer your personal information for the Identified Purposes to our service providers, such as account statement preparation and mailing companies, courier companies, imaging companies, and document storage companies. When Pinnacle transfers personal information to our service providers, we ensure by contractual means that the transferred personal information is used only for the purposes for which the service provider is retained and is protected to the same degree as it is when in our possession.  We may use service providers located outside of Canada, and where we do, personal information may be disclosed in accordance with the laws of the jurisdiction in which the service provider is located, including to the government in that jurisdiction and its agencies.

Your right to access your personal information

You have a right to access your personal information that we have in our possession or control. You also have a right to know which third parties have received your information from Pinnacle.

For more information, to file a complaint, to make enquiries, or to opt out of all or parts of this Privacy Policy, please contact Pinnacle’s Chief Privacy Officer:

Pinnacle Wealth Brokers Inc.

320, 15 Royal Vista Place NW Calgary, Alberta, T3R 0P3

Tel: 1-855-628-4286

Fax: 1-866-462-3514

Email: compliance@pinnaclewealth.ca

Website: www.pinnaclewealth.ca

 

If Pinnacle fails to satisfactorily resolve a client’s privacy concern, a client may contact the Privacy Commissioner of Canada by writing to: 

The Privacy Commissioner of Canada

Place de Ville, Tower B, 3rd Floor

112 Kent Street

Ottawa, ON K1A 1H3 

Tel: 1-800-282-1376

Fax: 613-947-6850

 

In order to access your personal information, please make your request in writing to Pinnacle’s Chief Privacy Officer, stating as specifically as possible which personal information you are requesting. We try to respond to such requests as soon as possible and will advise you if for some reason we cannot respond right away.

Pinnacle may charge you a reasonable fee for providing access to your personal information, but only after first advising you of the approximate cost.

In providing you with a list of the organizations to whom we have disclosed any of  your information, we will try to be as precise as possible. When it is not possible to provide an exact list of such organizations to which we have actually disclosed your personal information, Pinnacle shall provide a list of organizations to which we may have disclosed the information.

Pinnacle has the right to refuse your request for access to personal information if:

  • the information is protected by solicitor-client privilege;

  • granting access would reveal confidential commercial information;

  • doing so would reasonably be expected to threaten the life or security of another individual;

  • the information was collected for purposes related to the detection and prevention of fraud;

  • the information was generated in the course of a formal dispute resolution process; or

  • the information would likely reveal personal information about another individual.

 

Keeping your information accurate

Pinnacle strives to ensure that the personal information we have on file for you is as accurate and up-to-date as necessary for the Identified Purposes for which it is to be used. If any information needs to be updated or amended to reflect a change in your situation, we make every effort to update our records, however, depending on the nature of change, you may be required to provide us with a written notice of change, such as a change of residential, mailing and/or e-mail address. Pinnacle shall amend personal information that is materially inaccurate or incomplete and, where appropriate, shall endeavor to advise other parties having access to the information in question.

 

How to contact us

If you have a complaint related to the Privacy Policy or any of our procedures, contact our Chief Privacy Officer. If your complaint is justified, we will take the steps necessary to resolve the issue, including amending our Privacy Policy and practices, if necessary.

If we are not able to resolve your concern, or if you have any other concerns about Pinnacle’s Privacy Policy and related procedures, you may contact the Office of the Privacy Commissioner of Canada or, if applicable, an applicable provincial privacy commissioner. Pinnacle’s Chief Privacy Officer will provide you with this contact information upon request.  If you have a complaint related to the Privacy Policy or any of our procedures, contact our Chief Privacy Officer.

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