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11+ Investment Advisory Agreement Templates in DOC | PDF

An investment advisory agreement the term defined by the Securities and Exchange Commission (SEC) as any contract agreement or scheme by which an individual invests money in a common enterprise and is led to expect income solely from the efforts of the promoter or third party. These contracts are deals where one party invests money expecting a return on investment (ROI). Such contracts are used in different industries including the real estate industry.

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11+ Investment Advisory Agreement Templates in  DOC | PDF

1. Investment Advisory Agreement Template

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2. Financial Management Investment Advisory Agreement Template

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3. Non-Discretionary Investment Advisory Agreement Template

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4. Investment Advisory Service Agreement Template

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5. Investment Management & Advisory Agreement Template

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6. Capital Investment Advisory Agreement Template

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7. Basic Investment Advisory Agreement Template

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8. Sample Investment Advisory Agreement Template

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9. Supplementary Agreement for Service of Investment Advisory

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10. Approval of Investment Advisory Agreement Template

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11. Investment Advisory Agreement Template in PDF

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12. Investment Advisory Agreement Template in DOC

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Elements of a Proper Investment Advisory Agreement

There are three things that should be included in an investment agreement:

Return on Investment

Your agreement needs to state when you can expect a return on investment from an investor. If he or she doesn’t get a return, then the investor will ask you to return the investment. You need consider the payment fact; how will you pay the investor? This includes the rate of interest and other relevant details too. For instance, determine if you will provide a flat rate of interest or a rate of return based on the success of the investment that is agreed upon by both parties. Additionally, the contract should take into account what happens if your business is dissolved or fails. You need to determine what course of action is to be followed in the case of those circumstances. In those situations what will happen to the investment? Any uncertainties related to the investment also need to be disclosed in the agreement. It will make the investor aware of the fact that a return isn’t guaranteed.

Reporting and Control

The agreement needs to clarify whether the investor shall have any rights, such as ownership or management rights, within the company. For example, some investors might get voting rights in a platform that will allow them to get a say in business administration. Investors may have the option of voting for managers or directors. In the case of a smaller company, an investor may be granted rights that require him or her to manage daily operations. The investment agreement needs to identify any kind of reports that investors may intend to obtain in connection with corporate finances. It also needs to detail any investor’s rights to audit books for the company.

Contract Strategy

Investment agreements are very complex financial instruments. They’re not risk-free like with any investment. In some circumstances, they generally contain provisions limiting their ability to provide payouts of the contract value. It’s very essential to completely understand potential risks and situations when considering investment options. Since agreement terms are customized, negotiating on behalf of sponsors with the issuing parties is helpful for a stable value manager. Many skills are important for a fixed income manager to have stable value investing, such as agreement negotiation and administrative experience.

Steps on Drafting an Investment Contract

Step 1: Write the Opening Recital

The opening recital specifies the date on which the agreement is concluded as well as the names and addresses of all contracting parties. Using the company name and address if applicable, as the customer contact will be listed later in the agreement.

Step 2: Make the ‘Whereas’ Statement

This step states “Whereas” the first firm is seeking investment in its business, and “Whereas” the second firm is willing to invest. You should follow it up with the statement that says “therefore.” This usually reads as ‘Therefore, in the light of the agreements and covenants considered hereafter, the parties agree as follows:’.

Step 3: Write the Required Articles

The articles contain everything that was discussed and agreed upon previously. The same now takes a written form as a part of the contract. The articles can be identified one by one; they will appear as “Article 1,” “Article 2” etc. In the context of an investment agreement, the typical articles consist of the amount of money to be spent, how the investment is to be used and what the investor will hope to get in exchange for their financial contribution.

Step 4: Insert the Payment Terms

Payment terms generally vary from business to enterprise and often depend on how large the investment is. Sometimes the transaction is issued as a lump sum payment, in which case you will mention the amount of the transfer, the date decided and details of the bank account receiving it. When the investment is spread across several installments, it is sensible to refer to an attachment. It specifies the dates and amounts in the receiving bank account for each transfer.

Step 5: Determine the Deliverables

Often the investment would require specific deadlines to meet certain targets, or goods to be produced as a result of business activities. Such items are known as deliverables. The returns need to be listed, along with each due date, in the investment contract.

Step 6: Determine the Term and Termination

The term of the contract defines the period of validity of the agreement and is the length of time needed by the investor to make the financial commitment and obtain the negotiated return on investment (ROI). The termination element specifies how the contract will end, and how the parties concerned will terminate the contract early.

Step 7: Insert Basic Information

This section of the contract will include the name, title, address, phone number, email address and other relevant contact details of both parties. In other words, this section will consist of the basic information of the involved parties.

Step 8: Determine the Law

The law generally varies from one place to another. And because of this, it is important to state explicitly which state will have authority over the contract.

Step 9: Put Signatures

There should be at least two witnesses in the presence of whom each party will sign the contract. Each witness must sign the contract, too. Ideally, one witness should be a Notary Public and will be required to notarize the signatures, although this is not generally mandatory. It is advisable to have two copies signed by the parties; this way each party will have a copy.

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