Non Discretionary Investment Advisory Agreement Template for Canada

A Non Discretionary Investment Advisory Agreement is a crucial legal document that formalizes the relationship between an investment advisor and client in Canada, where you retain complete control over your investment decisions while receiving professional guidance. Unlike discretionary agreements where advisors can execute trades on your behalf, this non-discretionary structure ensures you maintain final authority over all investment choices, with your advisor serving in a consultative capacity only.

When do you need this document?

You need this agreement when engaging an investment advisor who will provide recommendations, market analysis, and investment strategies while you make the final decisions. This structure is ideal if you want professional expertise but prefer to maintain hands-on control of your portfolio. The document is essential for registered investment advisors operating under National Instrument 31-103, as it demonstrates compliance with regulatory requirements for clear service definitions and client acknowledgments. Whether you're an individual investor seeking guidance for retirement planning, a corporate treasurer managing company assets, or an institutional client overseeing pension funds, this agreement ensures your advisory relationship is properly documented and legally compliant.

Key legal considerations

The agreement must clearly define the scope of advisory services, distinguishing between advice and execution authority to avoid regulatory violations. Fee structures require transparent disclosure, including management fees, performance fees, and any potential conflicts of interest. Risk disclosure provisions are mandatory, ensuring you understand investment risks and the non-guaranteed nature of returns. The document should address liability limitations, outlining circumstances where your advisor may or may not be held responsible for investment outcomes. Confidentiality clauses protect your financial information under privacy legislation, while termination provisions specify notice requirements and account transition procedures. Communication protocols must be established, defining how advice will be delivered and documented.

Legal requirements in Canada

Canadian investment advisory agreements must comply with provincial Securities Acts, which vary by jurisdiction but generally require advisor registration and adherence to fiduciary duties. National Instrument 31-103 mandates that registered advisors maintain detailed client agreements that clearly outline service limitations and fee structures. The Personal Information Protection and Electronic Documents Act (PIPEDA) governs how your personal and financial information is collected, used, and protected throughout the advisory relationship. Know Your Client (KYC) requirements must be incorporated, ensuring your advisor understands your investment objectives, risk tolerance, and financial circumstances. The agreement must include regulatory disclosures about the advisor's registration status, disciplinary history, and any material conflicts of interest. Ongoing compliance obligations require regular review and updates to ensure the agreement remains current with evolving regulations and your changing circumstances.