Investment Mandate Agreement Template for England and Wales

An Investment Management Agreement, commonly abbreviated to IMA and sometimes called an investment mandate agreement, is a legally binding contract that governs the relationship between you as a client and a professional investment manager who will run your assets on a discretionary basis. It sets the terms under which the manager can make investment decisions without seeking your prior approval for each transaction, while meeting the England and Wales regulatory framework. Read the agreement in full before signing, because the mandate inside it decides what the manager may do with your property.

Is an investment management agreement the same as an investment mandate agreement?

In practice, yes. The terms investment management agreement, IMA and investment mandate agreement all describe the same instrument: the contract that grants a manager authority to run a portfolio within agreed limits. The mandate is the core of it, the set of instructions and boundaries that decides what the manager may and may not do with your property. Some firms use "management agreement" for the whole contract and "mandate" for the investment brief inside it, but a single IMA usually covers both.

What is the difference between a discretionary and an advisory mandate?

The mandate type decides who makes the final call on each trade.

Most IMAs are discretionary, so clear restrictions and reporting matter. The agreement should state plainly which model applies.

When do you need this document?

You need an Investment Management Agreement when engaging a professional investment manager to run your portfolio on a discretionary basis. This applies whether you are a high-net-worth individual seeking private wealth management, a pension scheme trustee appointing an asset manager over scheme assets, or a corporate treasury department outsourcing investment functions. The agreement is essential when your manager will have authority to buy and sell securities, manage cash flows, and implement strategies without requiring your approval for each individual transaction. You also need this document when establishing segregated managed accounts, appointing sub-advisors for specific asset classes, or when institutional investors delegate decisions to external fund managers.

What should an investment mandate cover?

The mandate is the brief the manager works to. A clear one covers:

• Permitted asset classes and instruments, for example equities, bonds, cash and derivatives
• A benchmark and any target return or income objective
• Restrictions, such as concentration limits, leverage caps and excluded sectors
• Whether the manager may vote shares and how
• The base currency and any hedging policy

Key legal considerations

Your agreement must clearly define the scope of the manager's authority and set appropriate safeguards for your assets. Critical provisions include:

• Investment objectives that align with your risk tolerance and financial goals
• Detailed restrictions that prevent unauthorised activities
• Fee and payment structures covering management fees, performance fees, transaction costs and when each amount falls due
• Reporting requirements, including the frequency and content of performance reports
• Clear procedures for giving instructions, keeping the parties in contact by email or another agreed channel, and settling trades
• Risk management provisions, including stop-loss mechanisms, concentration limits, and procedures for managing conflicts of interest
• Termination, asset transfer arrangements, and liability limitations, with confirmation the manager holds appropriate professional indemnity insurance

Does a pension scheme need a separate kind of IMA?

The structure is the same, but a pension scheme mandate carries extra duties. Trustees must act within their scheme's investment powers and statement of investment principles, and the IMA should record how scheme assets are held, how income is applied, and the reporting the trustees need to meet their own obligations. Public pension schemes and private occupational schemes alike appoint managers this way, so the agreement should name the scheme as the client and tie the mandate to the trustees' agreed strategy.

What happens to your assets if the manager becomes insolvent?

The agreement should confirm that your assets are held separately from the manager's own resources, so that on the manager's insolvency your money and investments are not treated as part of its estate. Under FCA CASS rules, client money and assets are segregated and held with an approved custodian for exactly this reason. Recording custody, segregation and record-keeping arrangements in the IMA gives you a written basis to trace and recover certain holdings if the manager fails. In a restructuring or insolvency of the manager, properly segregated client assets are treated separately from the firm's estate, which is the practical reason these clauses matter.

How does the IMA handle international investments and foreign assets?

Many mandates hold assets across more than one jurisdiction, so the agreement should set out how international holdings are managed, custodied and reported. It should name the base currency, any foreign exchange and hedging policy, and how overseas custodians or sub-custodians are used. Where the mandate covers international markets, the agreement should also confirm which regulatory and tax reporting obligations apply to those holdings and how income and gains from them are accounted for.

How are disputes and complaints handled under an IMA?

A well-drafted IMA sets out how a disagreement is raised and resolved before it escalates. Typical clauses cover the notice a client must give, a defined period for the manager to respond, and whether unresolved matters go to mediation, arbitration or the courts of England and Wales. This is distinct from a property dispute or a shareholder dispute; an IMA disagreement usually turns on the terms of the mandate, fees or reporting. Where you qualify as a retail client, the agreement should also inform you of your right to refer a complaint to the Financial Ombudsman Service. Recording these steps keeps a disagreement a commercial matter to be settled between the parties.

How does an IMA protect your data and privacy?

An investment manager holds account details, identity records and financial information, so the agreement should state how that personal data is used and stored. A privacy clause, often cross-referring to the manager's privacy policy, confirms the manager processes your information only for the purposes of the mandate and any legal obligation, keeps it secure, and returns or deletes it on termination. This gives you a written basis to check how your information is handled and who it may be shared with, for example a custodian or administrator. For regulated firms the agreement may also address anti-money laundering and modern slavery compliance where the manager's own policies apply.

Does the IMA cover the manager's own staff?

The IMA governs the client relationship, not the manager's employment arrangements. The people running your portfolio sit under the firm's own employment contracts and, for senior staff, the Senior Managers and Certification Regime. If you are hiring an in-house investment professional rather than appointing an external firm, you would instead use an employment contract, not an IMA.

Related agreements to have in place

An IMA often sits alongside other documents. If you are appointing a manager as part of a wider investment round, review our investment agreement templates, and if you need to share information with a prospective manager first, our non-disclosure agreement covers that stage. For a fuller list of financial and commercial documents you can create, browse the full template library.

Legal requirements in England and Wales

Under England and Wales law, your Investment Management Agreement must comply with the Financial Services and Markets Act 2000 and associated regulations. Your manager must be authorised by the Financial Conduct Authority and comply with COBS (Conduct of Business Sourcebook) rules governing client relationships and investment advice. The agreement must incorporate MiFID II requirements for client categorisation, best execution policies, and product governance obligations. CASS (Client Assets Sourcebook) rules mandate specific provisions for protecting your assets, including segregation and custodial arrangements. Your manager must conduct appropriate suitability assessments and provide required disclosures about fees, risks, and potential conflicts of interest. The agreement should reference compliance with FCA Handbook provisions and include necessary consumer protection measures if you qualify as a retail client under FCA classification rules.