Financial Advisor Agreement Generator

What is a Financial Advisor Agreement?

A Financial Advisor Agreement is a contract between a financial advisor/firm and a client that outlines the terms and conditions for providing investment advice, financial planning, wealth management, or other financial services. This agreement establishes service scope, fiduciary responsibilities, compensation structure, investment strategy, risk disclosures, confidentiality provisions, account access parameters, communication expectations, and termination conditions. It addresses the unique aspects of financial advisory relationships including regulatory compliance, duty of care, investment suitability, and conflicts of interest while ensuring both parties understand their rights and responsibilities.

Key Sections Typically Included:

• Services Scope and Description
• Fiduciary Standard and Duty of Care
• Compensation Structure and Fee Schedule
• Investment Strategy and Asset Allocation
• Risk Tolerance and Investment Objectives
• Regulatory Disclosures and Compliance
• Client Responsibilities and Information Provision
• Account Access and Trading Authority
• Performance Reporting and Communication
• Confidentiality and Privacy Provisions
• Conflicts of Interest Disclosures
• Third-Party Service Provider Relationships
• Limitation of Liability Provisions
• Dispute Resolution Procedures
• Term and Duration
• Termination Conditions and Procedures
• Account Transition After Termination

Why Use Our Generator?

Our Financial Advisor Agreement generator helps advisors and clients establish clear expectations for financial advisory relationships. With the significant financial implications, regulatory requirements, and fiduciary obligations involved, a comprehensive agreement ensures both parties understand service parameters, fee structures, and legal responsibilities. Our generator creates a customized agreement that addresses specific financial objectives, risk tolerances, and service needs while protecting both parties' interests and complying with regulatory standards.

Frequently Asked Questions

• Q: How should advisor responsibilities and fiduciary obligations be defined?

  • A: The agreement should clearly establish the advisor's fiduciary duty to act in the client's best interest, define the standard of care and loyalty expected, and specify the scope of the advisor's authority and limitations. It should outline the advisor's responsibility for investment due diligence and research, address the process for determining investment suitability based on client's circumstances, and establish monitoring and review procedures for client portfolios. The agreement should also detail communication frequency and methods, specify the types of financial advice and guidance to be provided, and outline educational responsibilities regarding investments and strategies. Additionally, it should address the advisor's obligation to disclose conflicts of interest, specify record-keeping and documentation responsibilities, and clarify the advisor's role regarding tax implications of investment decisions versus formal tax advice.

• Q: How should compensation and fee structures be documented?

  • A: The agreement should clearly define all compensation methods (fee-only, commission-based, or hybrid) with specific amounts or percentages, establish fee calculation methodologies (AUM-based, flat fee, hourly, etc.), and specify payment frequency and methods. It should detail any tiered fee structures based on assets under management, address minimum fee requirements or account size, and outline procedures for fee adjustments or increases. The agreement should also specify whether fees are deducted directly from accounts or billed separately, detail any additional costs for specialized services or financial planning, and address third-party fees (custodian fees, transaction costs, fund expenses). Additionally, it should outline fee refund policies in case of termination, specify whether commissions or referral fees are received from third parties, and address performance-based fee arrangements if applicable.

• Q: What investment approach, strategy, and client parameters should be included?

  • A: The agreement should clearly document the client's investment objectives and financial goals with specific metrics, outline the client's risk tolerance using standardized assessment methods, and specify any investment restrictions or exclusions. It should detail the proposed asset allocation strategy and investment philosophy, address diversification principles and rebalancing procedures, and specify authorized investment types and vehicles. The agreement should also establish procedures for client approval of investment decisions, outline the process for strategy adjustments based on changing market conditions or client circumstances, and specify benchmark indices for performance evaluation. Additionally, it should address tax-efficiency considerations in investment selection, detail emergency liquidity provisions and cash reserves strategy, and establish procedures for handling significant market events or economic changes.