Banyan Hill (“Publisher”) and WorthNet, LLC, are related but separate, independently managed companies. WorthNet’s business is to solicit and refer prospective clients to select third-party investment advisers. Publisher receives cash compensation to assist with promoting WorthNet, which creates a material conflict of interest. Publisher is not a current client or investor of WorthNet.
WorthNet compensates the Publisher pursuant to a written agreement (“Agreement”) governing the scope of the Publisher’s activities with respect to WorthNet and the terms of associated compensation. Currently, the Agreement provides for a range of cash payments tied to key prospective client milestones (e.g., engaging with WorthNet regarding a third-party adviser, opening an account with a third-party adviser and remaining a client of a third-party adviser over time). The Agreement also provides for payments to the Publisher based on common performance advertising models, including but not limited to: fees for media and audience access such as per thousand impressions (CPM), per click (CPC), and flat rate sponsorship fees at prevailing market rates; fees based on key user actions such as per form submitted by a prospective customer (cost per lead or CPL), per specific transactional milestone like the establishment of an adviser relationship or subsequent renewal (cost per action or CPA), or the purchase of other products and services promoted by WorthNet (revenue share); or a combination therein. Compensation will vary by placement and performance metrics. Net fees are expected to range between $10 and $100 per qualified lead in the first year, based on assumptions about the volume of traffic and conversion rates of traffic to leads and clients, and may continue for the length of client relationships. The Agreement may be amended in the future by WorthNet and the Publisher’s mutual agreement.
As a result, the Publisher has an economic interest in recommending WorthNet to leads. This economic interest, together with the Publisher’s affiliation with WorthNet, can inform the Publisher’s recommendation of WorthNet in addition to a lead’s interests. This creates a material conflict of interest on the part of the Publisher in its promotion of WorthNet to ads.