What this document can tell you

Review an adviser agreement for scope, authority, fees, custody, conflicts and exit terms before authorizing work.

Your reading route

Identify the parties and service

Match the legal firm name, account owner and service type to Form CRS and Form ADV. Team brands can obscure the regulated entity. The agreement should state whether the service is planning, ongoing advice, investment management or another defined assignment and name any minimum account or term. Next step: Compare the agreement with Form ADV.

Read authority and custody clauses slowly

Discretion may let the adviser trade without prior approval within the mandate; non-discretionary work generally requires client approval. Identify the qualified custodian, statement source and any authority to transfer fees. Never treat an adviser-created portal as a substitute for independent custodian statements. Next step: Review the shorter relationship summary.

Recalculate fees and the exit

Apply the fee formula to your expected assets or work. Look for billing in advance or arrears, householding, minimum fees, product costs and refunds after termination. Record notice method, effective date, record delivery and what happens to managed accounts when the agreement ends. Next step: Plan for an orderly exit.

Follow one detail through the document

Lee's proposal says 0.80%, but the agreement also contains a minimum annual fee that equals 1.25% of Lee's current account. The agreement controls the billing. Lee asks for a dollar illustration, confirms quarterly billing in arrears and has the minimum explained before deciding.

Document review checklist

Mark each item as you verify it0 of 6 complete

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Primary sources

Questions about the document

Should the agreement match Form ADV?

Yes on material services, fees and conflicts. Differences or unclear language should be resolved in writing before the relationship begins.

Can an adviser change the agreement?

The agreement should state amendment and notice procedures. Material disclosure changes may also appear in updated regulatory documents, so retain each version.

Finish the review

  • Match legal firm and client names
  • Define every included service
  • Understand discretionary authority
  • Confirm the independent custodian
Scope note

This page is general education, not individual financial, investment, insurance, mortgage, legal or tax advice.