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What Is An Investment Management Agreement

The contract must provide that it can be terminated by you at any time or relatively quickly (for example. B 30 days) without penalty. If you are not satisfied with the consultant, you should be able to end the relationship without incurring any additional costs. The agreement should describe how the advisor will negotiate the assets in the account once a purchase or sale decision has been made. If the advisor is trading through an affiliate broker, you should have peace of mind that you are getting the best total price. The agreement often allows the advisor to receive research or brokerage services from the brokers he or she uses. This is allowed, but you should know that the advisor has a financial interest in using these brokers. You can also ask the advisor to trade through a specific broker, but this can increase your trading costs. 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. The agreement should specify whether you or the advisor is responsible for the power of attorney for the account securities. Some consultants do not like to elect MPs because of the administrative burden. However, proxies can be important (p.B a vote on an upcoming acquisition), and the advisor is often in a better position to assess issues and ensure your voice is recorded in a timely manner.

For similar reasons, you may also ask the consultant to file class actions on your behalf. 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. The agreement must stipulate that the consultant will provide its services in accordance with all laws and regulations. The agreement may also identify special requirements, such as.

B the registration of the adviser under the Federal Investment Advisers Act of 1940 or under State law. The agreement must name the depositary who will hold the assets in the account. The custodian bank must be a reputable financial organization, e.B. a large bank or brokerage firm, and should be independent of the advisor (again, to avoid the Madoff situation). If the advisor recommends a particular custodian bank, he or she must explain the basis of his or her recommendation (e.B. reduced costs, better services or the consultant`s knowledge of the custodian`s staff and systems). The advisor must also be willing to work with the custodian bank you are currently using or would otherwise prefer. Investment management contracts usually 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 […].