As a financial advisor, it is essential to have a well-written agreement in place to protect both yourself and your clients. A financial advisor agreement is a legal document that outlines the terms and conditions of the professional relationship between the advisor and their client.
A financial advisor agreement should include the following elements:
1. Scope of Services – This section outlines the specific services that the advisor will provide to the client. This could include investment management, financial planning, or tax planning, among others.
2. Compensation – This section details how the advisor will be compensated for their services. This could include a percentage of assets under management, a flat fee, or an hourly rate.
3. Termination – This section outlines the conditions under which either party can terminate the agreement. This could include termination for cause, termination without cause, or termination by mutual agreement.
4. Confidentiality – This section outlines the advisor`s obligation to keep the client`s personal and financial information confidential.
5. Indemnification – This section outlines the advisor`s liability for any losses or damages incurred by the client as a result of the advisor`s negligence or misconduct.
6. Governing Law – This section identifies the state law that will govern the agreement.
Here is a sample financial advisor agreement:
[Name of Financial Advisor]
[City, State ZIP Code]
[City, State ZIP Code]
Dear [Client Name],
I am pleased to provide you with financial advice and investment management services. This agreement sets forth the terms and conditions of our professional relationship.
Scope of Services
I will provide the following services to you:
– Investment management
– Financial planning
– Tax planning
My fee for these services is [insert fee structure here]. You will receive a separate fee schedule for any additional services.
Either party may terminate this agreement at any time by providing written notice to the other party. If you terminate this agreement, you will be responsible for any fees due up to the date of termination.
I will keep your personal and financial information confidential and will not disclose it to third parties except as required by law.
I will not be liable for any losses or damages incurred by you as a result of my negligence or misconduct. You agree to indemnify and hold me harmless from any claims or damages arising from your use of my services.
This agreement shall be governed by the laws of [insert state here].
Please sign below to indicate your agreement with the terms of this agreement.
Agreed to by:
In conclusion, having a well-written financial advisor agreement is crucial for protecting both yourself and your clients. Be sure to include all the necessary elements, such as the scope of services, compensation, termination, confidentiality, indemnification, and governing law. Use this sample agreement as a starting point to create a customized agreement that meets the specific needs of your practice and clients.