Money Management Contract Template for Australia

A Money Management Contract is a legally binding agreement that establishes the professional relationship between an investment manager and their client under Australian financial services law. This document provides the foundation for portfolio management services, clearly defining the scope of authority, investment guidelines, fee structures, and regulatory compliance requirements that govern the relationship.

When do you need this document?

You need a Money Management Contract whenever you're establishing a formal investment management relationship in Australia. This applies when you're a licensed financial services provider taking on new clients for portfolio management, discretionary investment services, or ongoing investment advice. The contract is essential for high-net-worth individuals seeking professional money management, institutional investors appointing fund managers, and family offices establishing investment management arrangements. It's also required when restructuring existing investment relationships to ensure compliance with current ASIC regulations and when expanding services to include discretionary trading authority or alternative investment strategies.

Key legal considerations

The contract must clearly define the investment manager's authority and limitations, including specific asset classes, risk parameters, and investment restrictions. Fee arrangements require detailed disclosure, including management fees, performance fees, and any third-party costs that may be charged to the client. The agreement should establish comprehensive reporting requirements, outlining the frequency and detail of performance reports, transaction confirmations, and portfolio statements. Termination provisions must specify notice periods, asset transfer procedures, and fee calculations upon contract end. The document should address conflicts of interest, including how the manager will handle situations involving related parties or proprietary investments. Liability and indemnification clauses must be carefully balanced to protect both parties while ensuring the manager maintains appropriate professional responsibility.

Legal requirements in Australia

Under the Corporations Act 2001, money managers must hold an Australian Financial Services License (AFSL) or be an authorised representative of a license holder. The contract must comply with ASIC's client money handling requirements, including proper segregation of client assets and appointment of approved custodians. Anti-Money Laundering and Counter-Terrorism Financing Act 2006 obligations require robust customer identification and verification procedures, with ongoing monitoring and suspicious transaction reporting. Privacy Act 1988 compliance is mandatory for handling personal information, requiring clear privacy disclosures and consent mechanisms. The Australian Consumer Law provides additional protections, particularly regarding misleading or deceptive conduct and unconscionable terms. Investment managers must also ensure the contract aligns with their AFSL conditions and any relevant ASIC regulatory guides or class orders that apply to their specific services.