Investment Advisory Agreement (Service Agreement)
An investment advisory agreement, sometimes called the service agreement, is the contract between an adviser and a client. It states the services provided, the fee and how it is calculated and billed, whether the adviser has discretion, the term and how either side ends it, and how the agreement is treated on assignment. It is not filed with any regulator. It is retained by the firm, and Form ADV Part 2A describes publicly what the agreement puts into effect for one client.
- Who handles it
- The adviser executes one with each client and retains the signed copy. There is no filing. Examiners ask for the executed agreement and read it against what the firm actually billed and against what the brochure says the firm does.
- Filed through
- Retained by the firm
- Applies to
- SEC-registered RIA, State-registered RIA, Dually registered
What the form asks for
- Scope of services, and the accounts the agreement covers
- Fee schedule, the basis it is calculated on, and billing frequency
- How the fee is collected, including any debit authorization
- Discretionary or non discretionary authority
- Term, termination, and the treatment of prepaid fees
- Assignment and change of control
- Other agreed terms, including any arbitration provision
- Signatures and effective date
The work behind the filing
Reconcile the fee you bill against the fee the agreement states
The fee schedule lives in a signed PDF. Billing runs out of the portfolio system. The two agree on the day of signing and then drift, once a negotiated exception is granted, a household is restructured, or an account is added without amending anything. Caddi can extract the schedule from each executed agreement and compare it against what was actually billed, account by account.
Know which clients have a current executed agreement
Most firms can answer this, but only by reconstructing it from a document store and a CRM under exam pressure, which is when the missing signature page turns up. Caddi can maintain the inventory continuously: who signed, which version, when, and where the executed copy sits.
Re-paper a book without losing track of it
A fee change, a new template, or a change of control means the entire book gets a new document that has to be sent, signed, filed, and reconciled against who is still outstanding. Run by hand it takes months and ends with an unreliable list. Caddi can drive the send, chase the signature, file the executed copy in the right client folder, and keep the outstanding list honest.
Questions
What is an investment advisory agreement?
It is the contract between an adviser and a client setting out the services provided, the fee and how it is calculated and billed, whether the adviser has discretion, the term and how either side terminates, and how the agreement is handled on assignment.
Is an investment advisory agreement filed with the SEC?
No. It is not filed with any regulator. It is executed with the client and retained by the firm, and examiners commonly ask to see executed agreements.
What is the difference between the advisory agreement and Form ADV Part 2A?
The agreement is the contract with one client. Part 2A is the brochure that describes the firm's services and fees to the public. They are read together, and they are expected to describe the same arrangement.
Why does billing drift from the signed agreement?
Because the agreement is a document and billing is a system, and only one of them gets updated when something changes. An exception granted in a conversation, a household restructured, or an account added under an old schedule all move the billed fee away from the signed one, and nothing compares the two on its own.
Does Caddi file this form for me?
No. Caddi does not submit filings to IARD, FINRA Gateway, EDGAR, or any regulator, and it is not a substitute for your compliance program or your CCO. Caddi automates the work around the filing: gathering the underlying data out of your portfolio, CRM, and document systems, reconciling it against the prior filing, flagging what changed, and evidencing delivery. A human still reviews and files.
Related forms
The filing is the easy part
Caddi does not file forms. It runs the work around them: pulling the underlying data out of your portfolio, CRM, and document systems, reconciling it against the prior filing, and evidencing delivery. See it run on your own stack.
See the compliance specialistThis page describes what the form is and the work it creates. For requirements, deadlines, and whether any of it applies to your firm, see SEC: Investment adviser regulation and examination resources.