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While the Advisers Act does not require a written agreement between an advisor and its clients, it contains a handful of requirements regarding the content and parameters of any advisory contract, whether or not it is in written form.
An investment advisor is an individual or a firm that specializes in advising clients on the buying and selling of securities, in exchange for a fee. There are two ways this can happen. First, an investment advisory can offer their services by working directly with their clients to offer investment advice.
Investment advisory contracts are legal documents that outline the relationship between the client and the investment advisor. They provide clear guidelines of what is expected of each party in order for your needs to be met.
Most states require RIAs to have a net worth of at least $35,000 if they have actual custody of client funds and $10,000 if they do not; RIAs who fail to meet this requirement must post a surety bond. (The rules for this requirement, as well as several other aspects of registration, vary from state to state.)
An advisor agreement is a legal document used between a company and an advisor they have hired. The legal agreements outlines the expectations and obligation between the two parties, including the role and responsibilities of the advisor, their compensation, confidentiality, and assignment of work.
An investment agreement will set out the company's obligations and warranties to the investor in return for the funding. The investor will not usually have any input into the company's affairs unless they are also becoming a shareholder.