Asset Management Agreement Form

What is the asset management agreement?

An asset management agreement is a formal contract between a client and an asset manager outlining the terms and conditions under which the manager will manage the client's assets. This document typically details the scope of services, investment objectives, fees, and the responsibilities of both parties. It serves to protect the interests of both the client and the asset manager by clearly defining expectations and obligations.

Key elements of the asset management agreement

When creating an asset management agreement, several key elements should be included to ensure clarity and legal enforceability:

• Parties involved: Clearly identify the client and the asset manager.
• Scope of services: Define the specific services the asset manager will provide, such as investment strategy, asset allocation, and reporting.
• Fees and expenses: Outline the fee structure, including management fees, performance fees, and any other costs associated with asset management.
• Investment objectives: Specify the client's investment goals, risk tolerance, and any restrictions on investments.
• Duration of the agreement: Indicate the length of the agreement and the conditions for termination.
• Compliance and regulations: Include clauses ensuring adherence to relevant laws and regulations governing asset management.

Steps to complete the asset management agreement

Completing an asset management agreement involves several important steps to ensure that the document is thorough and legally binding:

1. Gather necessary information: Collect all relevant details about the client and the asset manager, including contact information and financial details.
2. Define investment objectives: Discuss and document the client’s financial goals and risk tolerance.
3. Draft the agreement: Use clear and concise language to draft the agreement, incorporating all key elements.
4. Review the agreement: Both parties should review the document carefully to ensure accuracy and completeness.
5. Sign the agreement: Utilize a secure eSignature solution to sign the agreement digitally, ensuring compliance with eSignature laws.
6. Store the agreement: Keep a copy of the signed agreement in a secure location for future reference.

Legal use of the asset management agreement

The asset management agreement is legally binding when it meets specific criteria. To ensure its enforceability, it must be signed by both parties, include clear terms and conditions, and comply with applicable laws and regulations. Utilizing a trusted eSignature platform can help ensure that the agreement adheres to the Electronic Signatures in Global and National Commerce (ESIGN) Act and the Uniform Electronic Transactions Act (UETA), which govern the legality of electronic signatures in the United States.

How to use the asset management agreement

Using an asset management agreement effectively involves understanding its purpose and how it guides the relationship between the client and the asset manager. The agreement serves as a roadmap for managing investments, outlining expectations and responsibilities. Clients should refer to the agreement regularly to ensure that the asset manager is adhering to the agreed-upon strategies and objectives. Additionally, any amendments or updates to the agreement should be documented and signed by both parties to maintain clarity and compliance.