Advisor Contract Terms: What You Need to Know Before Signing

When you hire a financial advisor, you're not just paying for advice—you're signing a legal agreement. These advisor contract terms, the written rules that define the relationship between you and your financial advisor. Also known as investment advisor agreement, it lays out exactly what you’re paying for, how often you’ll be reviewed, and whether your advisor is legally bound to put your interests first. Most people skip reading these documents, but that’s like buying a car without checking the warranty. The fine print controls your costs, your rights, and your protection.

Two key things always show up in these contracts: advisory fees, how your advisor gets paid—whether it’s a percentage of your assets, a flat fee, or commissions on products they sell. And fiduciary duty, the legal obligation for an advisor to act in your best interest, not their own. Not all advisors have this duty. Some only need to recommend "suitable" options—which could mean higher-commission products that aren’t the best for you. If your contract doesn’t say "fiduciary" clearly, ask for it in writing. Don’t rely on verbal promises.

Other common terms include how often you’ll meet, what reports you’ll receive, and whether the advisor can trade your account without asking. Some contracts lock you in for a year. Others let you walk away anytime. Watch for auto-renewal clauses—those can trap you if you forget to cancel. Also check if your advisor is allowed to work with other clients who might have conflicting interests. Transparency isn’t optional. It’s the baseline.

You’ll find posts here that break down real contract examples, compare fee structures from top firms, and show you exactly which clauses to question. No jargon. No sales pitches. Just what the documents actually say—and what you should demand before you sign.