This document is an Investment Advisory Agreement that appoints the investment advisor as attorney-in-fact to the trustee. It details the duties and obligations of the investment advisor and provides indemnity to the advisor. It also spells out the duration and termination of the agreement and the governing law of the agreement.
Illinois Investment Advisory Agreement: A Comprehensive Guide for Investors Introduction: An Illinois Investment Advisory Agreement is a legal contract between a financial advisor (or investment advisor) and an investor, outlining the agreed terms and conditions for the provision of investment management services. This agreement establishes a fiduciary relationship between the advisor and the investor, emphasizing the advisor's obligation to act in the investor's best interest. In Illinois, investment advisors are regulated by the Illinois Securities Department to ensure the protection of investors. This article aims to provide a detailed description of the Illinois Investment Advisory Agreement, highlighting its key components, obligations, and types. Key Components of the Agreement: 1. Parties involved: The agreement identifies the investor and the investment advisor involved in the contractual relationship. 2. Scope of services: It outlines the specific investment advisory services to be provided, such as financial planning, portfolio management, risk assessment, and asset allocation. 3. Compensation structure: The agreement defines the fees and expenses associated with the services provided, including the advisor's management fee, performance-based fees, administrative costs, and transaction expenses. 4. Duration: This specifies the duration of the agreement and whether it is open-ended or has a fixed term. 5. Termination clause: The agreement includes provisions for terminating the relationship, stating conditions under which either party can terminate the agreement. 6. Disclosure of conflicts of interest: Investment advisors are required to disclose any potential conflicts of interest that may arise from the advisory relationship. 7. Custody of assets: If the advisor has custody of the investor's assets, the agreement addresses the responsibilities and safeguards in place to protect the investor's interests. 8. Legal and fiduciary duties: The agreement outlines the legal and ethical obligations of the advisor, emphasizing their fiduciary duty to act in the best interest of the investor. Types of Illinois Investment Advisory Agreements: 1. Discretionary Investment Advisory Agreement: Under this agreement, the investment advisor has the discretion to make investment decisions on behalf of the investor without obtaining prior approval for each transaction. 2. Non-Discretionary Investment Advisory Agreement: This agreement requires the investment advisor to obtain the investor's approval before executing any investment transactions. The advisor provides recommendations, and the investor retains the final decision-making authority. 3. Wrap Fee Program Agreement: This agreement combines investment management services with transaction execution services into a single fee (a "wrap fee") rather than charging separate fees for each service. 4. Limited Power of Attorney Agreement: This agreement grants the investment advisor limited authority to execute specific transactions on behalf of the investor, such as buying or selling securities. Conclusion: The Illinois Investment Advisory Agreement is a vital document that sets the framework for the relationship between an investor and an investment advisor. The agreement governs the provision of advisory services, protects the investor's interests, and ensures compliance with regulatory requirements. By understanding the key components and the different types of agreements available, investors can make informed decisions and select the most suitable advisory arrangement in Illinois.Illinois Investment Advisory Agreement: A Comprehensive Guide for Investors Introduction: An Illinois Investment Advisory Agreement is a legal contract between a financial advisor (or investment advisor) and an investor, outlining the agreed terms and conditions for the provision of investment management services. This agreement establishes a fiduciary relationship between the advisor and the investor, emphasizing the advisor's obligation to act in the investor's best interest. In Illinois, investment advisors are regulated by the Illinois Securities Department to ensure the protection of investors. This article aims to provide a detailed description of the Illinois Investment Advisory Agreement, highlighting its key components, obligations, and types. Key Components of the Agreement: 1. Parties involved: The agreement identifies the investor and the investment advisor involved in the contractual relationship. 2. Scope of services: It outlines the specific investment advisory services to be provided, such as financial planning, portfolio management, risk assessment, and asset allocation. 3. Compensation structure: The agreement defines the fees and expenses associated with the services provided, including the advisor's management fee, performance-based fees, administrative costs, and transaction expenses. 4. Duration: This specifies the duration of the agreement and whether it is open-ended or has a fixed term. 5. Termination clause: The agreement includes provisions for terminating the relationship, stating conditions under which either party can terminate the agreement. 6. Disclosure of conflicts of interest: Investment advisors are required to disclose any potential conflicts of interest that may arise from the advisory relationship. 7. Custody of assets: If the advisor has custody of the investor's assets, the agreement addresses the responsibilities and safeguards in place to protect the investor's interests. 8. Legal and fiduciary duties: The agreement outlines the legal and ethical obligations of the advisor, emphasizing their fiduciary duty to act in the best interest of the investor. Types of Illinois Investment Advisory Agreements: 1. Discretionary Investment Advisory Agreement: Under this agreement, the investment advisor has the discretion to make investment decisions on behalf of the investor without obtaining prior approval for each transaction. 2. Non-Discretionary Investment Advisory Agreement: This agreement requires the investment advisor to obtain the investor's approval before executing any investment transactions. The advisor provides recommendations, and the investor retains the final decision-making authority. 3. Wrap Fee Program Agreement: This agreement combines investment management services with transaction execution services into a single fee (a "wrap fee") rather than charging separate fees for each service. 4. Limited Power of Attorney Agreement: This agreement grants the investment advisor limited authority to execute specific transactions on behalf of the investor, such as buying or selling securities. Conclusion: The Illinois Investment Advisory Agreement is a vital document that sets the framework for the relationship between an investor and an investment advisor. The agreement governs the provision of advisory services, protects the investor's interests, and ensures compliance with regulatory requirements. By understanding the key components and the different types of agreements available, investors can make informed decisions and select the most suitable advisory arrangement in Illinois.
Para su conveniencia, debajo del texto en español le brindamos la versión completa de este formulario en inglés. For your convenience, the complete English version of this form is attached below the Spanish version.
