What is an advisory agreement in the context of a Registered Investment Advisor (“RIA”)?

Definition: An advisory agreement is a document used to formalize the arrangement between an RIA and their clients. It typically outlines the various services to be provided, the fees to be charged, etc.

When used in an RIA context: “The RIA gave their new client the firm’s advisory agreement to sign to begin the client engagement.”

See also: Episode #16