Investment Management Agreement Guidelines

  • 11 months ago
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Investment Management Agreement Guidelines: What You Need to Know

An investment management agreement (IMA) is a legally binding contract between an investor and an investment manager. The purpose of the agreement is to provide guidance on how the investor`s assets will be managed, including the investment strategy, risk tolerance, and fees charged by the manager.

If you`re considering signing an IMA, it`s important to understand the guidelines that should be included in the agreement. Here are some key elements to look for:

Investment Objectives and Strategy

One of the first things to look for in an IMA is a clear outline of your investment objectives and the investment strategy that will be used to achieve them. This should include details on the types of investments that will be made, the level of risk that is acceptable, and the expected performance of the portfolio over time.

Fees and Expenses

Another important element to consider is the fees and expenses that will be charged by the investment manager. This should include a breakdown of any management fees, performance fees, and other costs that will be associated with managing your assets. It`s important to understand how these fees will impact your overall returns and to ensure that they are competitive with industry standards.

Performance Metrics and Reporting

Your IMA should also include clear performance metrics and reporting guidelines. This should include information on how your portfolio will be benchmarked, how often you will receive performance reports, and what metrics will be used to evaluate the success of your portfolio.

Investment Restrictions

IMAs may also include investment restrictions, which outline any limitations on the types of investments that can be made on your behalf. These restrictions may be based on factors such as your risk tolerance, investment goals, or regulatory requirements.

Termination and Amendment

Finally, your IMA should include details on how the agreement can be terminated or amended. This may include provisions for ending the agreement early, as well as guidelines on how the agreement can be changed over time to reflect changes in your investment objectives or other factors.

In conclusion, an IMA is an important document that should be carefully considered before signing. By understanding the key guidelines that should be included in the agreement, you can ensure that your assets are being managed in a way that aligns with your investment goals and risk tolerance.

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