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This agreement is meant to be a blueprint of sorts for you as the client because it spells out both what the financial advisor will do you for you, such as provide general advice or recommend specific investment moves for your portfolio, as well as what your responsibilities are.
This is called the 15(c) process, named after the section of the Investment Company Act of 1940 (1940 Act) that requires a majority of a fund's independent directors to annually approve the fund's advisory contract at an in-person meeting called for that purpose.
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.
Section 15 of the Investment Company Act, as amended (?1940 Act?), requires that each investment advisory contract with a registered investment company be approved initially by a majority of the fund's outstanding voting securities and by a majority of the board of directors, including a majority of the directors who ...
They provide clear guidelines of what is expected of each party in order for your needs to be met. Investment advisory agreements typically include terms related to the advisors fee structure, investment methodology, level of risk a client is willing to take, and more.