Financial Advisor Agreement: What You Need to Know Before Signing

When you hire a financial advisor agreement, a legal contract that defines the relationship between you and the person managing your money. Also known as an investment advisor contract, it’s not just paperwork—it’s your protection. Too many people sign without reading, then wonder why they got hit with hidden fees or unclear advice. This isn’t about trust—it’s about transparency.

A good financial advisor agreement, a legal contract that defines the relationship between you and the person managing your money. Also known as an investment advisor contract, it’s your protection. should clearly state whether your advisor is a fiduciary, a person legally required to act in your best interest. Not all advisors are. Some work on commission and push products that pay them more, not what’s best for you. The agreement must say outright if they’re bound by fiduciary duty. If it doesn’t, walk away.

Look at the fees. Are they flat? Percentage of assets? Hourly? The agreement must break this down in plain language. No vague terms like "reasonable compensation." You should know exactly how much you’re paying per year, per trade, or per service. Some advisors hide fees in account maintenance charges or mutual fund expenses. A solid agreement lists every cost, upfront.

It should also cover what services you’re actually getting. Are they just picking stocks? Building a portfolio? Giving tax advice? Helping with retirement planning? If the agreement says "comprehensive financial planning," but the advisor only talks about mutual funds, you’ve got a mismatch. The scope of work needs to match what you paid for.

Don’t skip the termination clause. Can you cancel anytime? Is there a penalty? How much notice do you need to give? These details matter more than you think. Life changes. Your goals change. You should be able to leave without getting locked in or charged extra.

You’ll also find details on how often you’ll meet, how reports are delivered, and what happens if your advisor leaves the firm. These aren’t footnotes—they’re part of your ongoing experience. A good agreement treats you like a partner, not a number.

Most of the posts here cover tools and systems that make money easier to track: cash flow dashboards, virtual cards, neobanks. But none of that matters if the person guiding your investments isn’t clear about their role. A financial advisor agreement is the foundation. Everything else—your portfolio, your goals, your peace of mind—rests on it.

Below, you’ll find real examples and breakdowns of what these agreements look like, what red flags to spot, and how to ask the right questions before you sign anything. No fluff. Just what you need to know to protect your money.