Each investment manager has been appointed under an investment management agreement with the management company and the company, which may be amended from time to time to take over the day-to-day management of the company`s investments, subject to the overall supervision and responsibility of the management company. The agreements between an investment advisor and his client are recalled in an investment management contract. Although the advisor generally recognizes his or her own form of agreement, the client must make certain decisions, may want to negotiate certain points, and in any case must understand the basic terms of the agreement. If you are the client, some of the basic conditions you need to know are: The agreement or an appendix to the agreement must include the investment guidelines under which the account is managed. These guidelines should specify not only the investment target of the account (p.B capital appreciation), but also the investment allocations (p.B a target of 60 % equity and 40 % debt) and investment restrictions (p.B no more than 20 % in foreign securities, only high-quality debt, no derivatives). You should discuss with the consultant the initial guidelines that should be given based on your current situation and risk tolerance, and regularly review these policies. Investment guidelines are the primary means by which you control the advisor`s activities, so you need to make sure they are clear and familiar with them. Allens is pleased to have participated in the update of the Financial Services Board`s model investment management agreement. Providing best practice documents to FSC members and other industry stakeholders ensures that the industry adheres to high standards. The Investment Management Agreement expired on February 28, 2014 and KBR is no longer the Investment Manager of the Company as of the same date.
Investment management contracts generally provide that the advisor is not liable to the client for wilful misconduct, bad faith, simple or gross negligence and/or breach of fiduciary duty. Some agreements may also provide that the Client shall not protect the Consultant against claims by third parties. While you should try to limit these types of regulations, consultants tend to resist significant changes. In addition, advisors are not permitted to limit the liabilities they would otherwise have under securities laws. The agreement gives the advisor discretion or non-discretion. With discretionary authorization, the advisor may create your account without prior consultation with you. In the case of a non-discretionary authority, the advisor must obtain your prior consent to each transaction. For both types of powers, the agreement should clearly indicate which assets are to be managed. This is usually done by referring to a specific account or accounts held in your name with a particular custodian. .