Financial Advisory Services Agreement Template for Indonesia

A Financial Advisory Services Agreement is a legally binding contract that governs the professional relationship between financial advisors and their clients in Indonesia. This document establishes the terms under which financial advice, investment recommendations, and wealth management services are provided while ensuring compliance with Indonesian Financial Services Authority (OJK) regulations.

When do you need this document?

You need this agreement whenever engaging professional financial advisory services in Indonesia. Investment banks require it when providing corporate finance advice to companies seeking merger and acquisition guidance or capital raising strategies. Wealth management firms use this document when offering portfolio management and investment advisory services to high net worth individuals or institutional investors. Financial consulting companies need this agreement when advising businesses on financial restructuring, risk management, or strategic financial planning. Private equity firms and asset management companies also require this contract when providing specialized investment advice or fund management services to their clients.

Key legal considerations

The agreement must clearly define the scope of advisory services to avoid disputes over service expectations and deliverables. Fee structures and payment terms require precise specification, including management fees, performance fees, and any additional charges for specialized services. Risk disclosure clauses are crucial, as advisors must inform clients about potential investment risks and market volatilities. Confidentiality provisions protect sensitive financial information shared during the advisory relationship. Liability limitations and indemnification clauses help protect advisors from excessive legal exposure while maintaining accountability for professional negligence. The agreement should also include termination procedures, outlining how either party can end the relationship and handle ongoing obligations.

Legal requirements in Indonesia

Under Indonesian law, financial advisory agreements must comply with Law No. 21 of 2011 on Financial Services Authority, which establishes OJK's regulatory oversight of financial services. Advisors must hold appropriate licenses under Law No. 8 of 1995 on Capital Markets if providing investment advisory services. The agreement must incorporate consumer protection measures mandated by OJK Regulation No. 1/POJK.07/2013, including transparency requirements, fair treatment obligations, and complaint handling procedures. The Indonesian Civil Code governs the fundamental contract law principles, requiring clear identification of parties, lawful consideration, and mutual consent. The agreement must include specific risk warnings and disclosure statements as required by OJK regulations, particularly for investment-related advisory services. Additionally, the contract should specify dispute resolution mechanisms, preferably through Indonesian courts or recognized arbitration institutions operating under Indonesian law.