Information note to customers (FinSA / OSFin)

I. INTRODUCTION

Switzerland has adopted the Federal Law on Financial Services (FinSA) and its implementing ordinance (OSFin). They entered into force on 1^stJanuary 2020. The (main) deadline for their implementation is 31^st December 2021.

This new legislation aims to improve investor protection.

NextGen Wealth Managers SA (hereinafter: “the Company” or “the wealth manager”) is subject to this law insofar as it carries out wealth management and advisory services for individual portfolios.

This note reflects the status as of March 27^th 2023. If this document is amended, the latest version will be made available to the Company’s customers.

II. GENERAL INFORMATION REQUIREMENTS FOR THE FINANCIAL SERVICE PROVIDER

A. Contact details, scope of activity and monitoring regime

The Company is a Swiss company registered in the Commercial Register of the Canton of Geneva since 15^thNovember 1991.

The Company has its registered office and address at Rue du Mont-de-Sion 8, 1206 Geneva.

Its contact details are as follows:

Phone number: +41 22 319 69 59
Email: welcome@nextgen-wm.ch

The Company offers discretionary portfolio management and advisory services for individual portfolios to Swiss and foreign clients.

As such, it is licensed as a “Wealth Manager” in the sense of article 17 and ss FinIA, which licence was issued by the FINMA on 23rd March 2023.

The Supervisory Body (SO), to which the Company is subject pursuant to Article 43a of the Swiss Federal Law on Financial Market Supervision (FINMASA), is as follow:

Name: AOOS – Swiss supervisory limited company
Address: Rue du-Roveray 14 – 1207 Geneva
Telephone: +41 22 343 40 00
Email : infogeneve@aoos.ch

B. Professional secrecy

The Company is obliged to observe professional secrecy in its business relationship with the client and to treat as confidential all data, information and specific documents on the client that are received during the course of the business relationship. This obligation shall continue after termination of the contractual relationship.

C. Dormant assets

It may occur that the contact with clients is lost and assets subsequently become dormant. These assets may be permanently forgotten by clients and their heirs. The following is recommended to avoid losing contact:

Changes of address and name: Please inform us immediately if you change your place of residence, address or name.
Special instructions: Please inform us in case of long absences, redirection of correspondence to a third address or reluctance to correspond as well as your availability in case of emergency during this period.
Granting powers of attorney: It may be advisable to appoint an authorised person whom the Company can contact in the event of loss of contact.
Trusted person and testamentary dispositions: Another way to avoid a loss of contact is for a trusted person to be informed of the relationship with the wealth manager. However, the Company may only provide information to such a trusted person if he has been authorised to do so in writing. In addition, the concerned assets may be mentioned in a will, for example.

D. Mediation procedure with a mediation body approved by the Federal Department of Finance

Financial service providers must be affiliated to a mediation body. Disputes between a financial service provider and a client can thus be settled by mediation, which does not exclude the possibility of legal proceedings. The mediation procedure is fair, fast, impartial and inexpensive for the customer, or even free of charge.

The Company is affiliated with the following ombudsman body:

Name: OFS Ombud Finance Switzerland
Address: 16 Boulevard des Tranchées, 1206 Geneva
Telephone: +41 22 808 04 51

III. INFORMATION ON GENERAL RISKS RELATED TO FINANCIAL SERVICES AND INSTRUMENTS

A. Discretionary wealth management risks

a. In general

The Company offers discretionary wealth management services. In this context, the client entrusts the Company with assets and gives it a mandate to invest them on his behalf in financial instruments.

The wealth manager manages the assets that the client has deposited with a custodian bank in the name of, on behalf of and at the risk of the client. The wealth manager ensures that the transactions he carries out correspond to the client’s profile and the agreed investment strategy and that the structuring of the portfolio is appropriate. Investment decisions are made entirely by the Company (without prior consultation with the client).

Such an wealth management activity involves transactions in financial instruments which are associated with opportunities and risks of varying degrees depending on the investment strategy agreed with the client. It is therefore important that the client understands these risks before using this financial service and defining an investment strategy.

Within the framework of asset management, the asset manager carefully selects the investments to be included in the portfolio within the framework of the market offer under consideration. The wealth manager ensures an appropriate spread of risks, insofar as the investment strategy allows.

The wealth manager regularly informs the client about the agreed and provided wealth management.

b. Risks

In the context of wealth management, there are, in principle, risks that fall within the client’s risk sphere and are therefore borne by the client:

The risk of the chosen investment strategy: Various risks may arise from the investment strategy chosen and accepted by the client. These risks are fully borne by the client. A presentation of the risks and an explanation of the corresponding risks are provided before the investment strategy is adopted.
The risk of loss of value of the financial instruments in the portfolio: This risk, which may vary depending on the financial instrument, is borne entirely by the client. For the risks associated with the various financial instruments, please refer to the brochure “Risks of trading in financial instruments” of the Swiss Bankers Association.
Information risk on the part of the wealth manager or the risk that the wealth manager has too little information to be able to make an informed investment decision: When managing assets, the wealth manager takes into account the client’s financial situation and investment objectives. If the client provides the asset manager with insufficient or inaccurate information regarding his financial situation and/or investment objectives, there is a risk that the wealth manager will not be able to make investment decisions that are suitable for the client.
The risk as a qualified investor in collective investment schemes: Clients who use wealth management in the context of a long-term wealth management relationship are considered qualified investors within the meaning of the Collective Investment Schemes Act. Qualified investors have access to forms of collective investment schemes that are exclusively open to them. This status allows a broader range of financial instruments to be taken into account in portfolio design. Collective investments for qualified investors may be exempt from regulatory requirements. These financial instruments are therefore not or only partially subject to Swiss regulation. This may give rise to risks, particularly with regard to liquidity, investment strategy or transparency. Detailed information on the risks arising from a particular collective investment scheme can be found in the constituent documentation of the financial instrument and, where applicable, in the basic information sheet and the prospectus.

In addition, asset management involves risks which fall within the risk sphere of the wealth manager and for which the latter is liable to the client. The wealth manager has taken appropriate measures to counter these risks, in particular by observing the principle of good faith and the principle of equal treatment when handling client orders. Furthermore, the wealth manager ensures the best possible execution of client orders.

B. Risks related to the advisory services for individual portfolios

a. In general

Within the framework of an investment advisory mandate, the Company advises the client on transactions in financial instruments, taking into account its portfolio. To this end, the Company ensures that the recommended transaction corresponds to the investment objectives (suitability test) or the investment strategy agreed with the client. The client then decides for himself to what extent he wishes to follow the Company’s recommendation.

Investment advice is provided on a regular basis, either on the client’s initiative or on the Company’s initiative. In doing so, the Company shall advise the client to the best of its knowledge and with due diligence.

The Company shall regularly check whether the structuring of the portfolio for investment advice corresponds to the agreed investment strategy. If it is found that there is a deviation from the agreed structuring, the Company will recommend corrective action to the client.

The firm will keep a record of each advice.

b. Risks

In addition to the risks mentioned above in the context of wealth management, there are in principle additional risks in the case of an advisory mandate which fall within the client’s risk sphere and are therefore borne by the client:

The risk that, as a result of the advice, the client places the order too late, which could lead to losses: Recommendations made by the Company are based on market data available at the time of the advice and are only valid for a short period of time due to market volatility.
The risk as a qualified investor in collective investment schemes: Clients who use portfolio investment advisory services in the context of a long-term investment advisory relationship are considered qualified investors within the meaning of the Collective Investment Schemes Act. Qualified investors have access to forms of collective investment schemes that are exclusively open to them. This status allows a broader range of financial instruments to be taken into account in portfolio design. Collective investments for qualified investors may be exempt from regulatory requirements. These financial instruments are therefore not or only partially subject to Swiss regulation. This may give rise to risks, particularly with regard to liquidity, investment strategy or transparency. Detailed information on the risks arising from a particular collective investment scheme can be found in the constituent documentation of the financial instrument and, where applicable, in the basic information sheet and the prospectus.

In addition, investment advice on the portfolio entails risks which fall within the Company’s risk sphere and for which the Company is responsible to the client. The Company has taken appropriate measures to counter these risks, in particular by respecting the principle of good faith and the principle of equal treatment when handling client orders. In addition, the Company ensures the best possible execution of client orders.

C. The market offer taken into consideration

The market offer taken into account in the selection of financial instruments covers third-party financial instruments as well as financial products (in particular structured products, certificates and collective investment funds) for which the Company assumes specific tasks (structuring, advisory, management or any other function related to the said investment vehicle). The Company receives remuneration for the tasks it performs from the financial products that would be included in the market offer. The client is aware of the risk of conflicts of interest arising from this (see section E below).

D. Risks associated with financial instruments

Transactions in financial instruments are associated with opportunities and risks. The specific risks inherent in the financial instruments offered are described in the SBA’s brochure “Risks of Trading in Financial Instruments” (see Appendix 1). We invite clients to read this brochure carefully and remain at your disposal to answer any questions.

E. Managing conflicts of interest

a. In general

Conflicts of interest may arise if the Company:

can obtain a financial benefit for itself or avoid a financial loss to the detriment of clients in breach of good faith;
has an interest in the outcome of a financial service provided to clients that is adverse to interest of the clients;
has a financial or other incentive, in the course of providing financial services, to place the interests of certain clients above the interests of other clients; or
accepts an inducement in the form of financial or non-financial benefits or services from a third party in breach of good faith in relation to a financial service provided to the client.

Conflicts of interest may arise in connection with the financial services provided by the Company. They arise in particular from the coincidence of:

multiple client orders;
client orders involving the Company’s own business or other proprietary interests; or
client orders with transactions of the wealth manager’s employees.

In order to identify conflicts of interest and to prevent them from having an adverse effect on the client, the Company has issued internal guidelines and taken organisational precautions:

The Company has established an independent control function that continuously monitors the investments and transactions of the Company’s employees as well as compliance with market conduct rules. Through effective control and sanction measures, the Company can avoid conflicts of interest.
When executing orders, the Company respects the principle of priority, i.e. all orders are immediately recorded in the chronological order of their receipt.
The Company requires its employees to disclose mandates that may lead to a conflict of interest.
The Company designs its remuneration policy in such a way that it does not create incentives for behavior that violates its contractual duties.
The Company regularly trains its employees and ensures that they have the necessary expertise.
The Company consults with and obtains approval from the control function in the event of a potential conflict of interest.

In the context of the financial services offered, the Company has identified conflicts of interest and informs its clients in a transparent manner on:

Remuneration received from third parties (see letter b. below).
The investment of client assets in structured products, certificates and/or collective investment funds (see III. C. above) in which the Company assumes specific tasks, remunerated in addition to the wealth management mandate.

No other conflicts of interest have been identified by the Company.

b. Economic links with third parties in relation to the service provided

The Company may receive remuneration from third parties (commissions, retrocessions, rebates or any other benefits) in connection with the financial services provided. The Company shall inform its clients in the mandates of the rates of such remuneration. In all circumstances, the Company shall ensure that the client’s interests are protected, particularly in the event of conflicts of interest.

F. Processing of Personal Data

In order to comply with the legal provisions applicable, in particular as a part of the client segmentation process and its compliance with anti-money laundering laws, the Company collects and processes information from and on its clients and prospective clients about their personal and financial circumstances. The Company not only processes personal data obtained from tis clients, but also processes personal data collected through publicly available sources and private sector data providers focusing on data relevant in the field of financial services. In this context, the Company may also particularly sensitive personal data on its clients, individuals representing them, on controlling persons and beneficial owners of assets under management as well as personal data on family members and other individuals having personal and commercial ties with our clients. If the client refuses to disclose information requested by the Company, we not be able to provide specific services, may not be allowed to enter into a business relationship or must terminate the relationship.

The Company must not and will not delete this information upon or shortly after termination of a business relation but will keep this data stored as required by applicable legislation. The Company may and will share personal data with third parties in the framework of the outsourcing of business activities to the extent required, as well as with other financial services providers, which also render services to the client in question. Such outsourcing and business partners may be located in other countries where we deem the degree of data protection being of an adequate level. The Company,

its directors and employees as well as all of its outsourcing partners and agents are subject to professional secrecy obligations pursuant to the Financial Institutions Act.

The Company maintains adequate internal guidelines and compliance programs

for the processing of personal data.

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Information note issued by the Company dated September 11 2023.

Information note to customers (FinSA / OSFin)

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