Financial Advisory Services Agreement Template for Saudi Arabia

A Financial Advisory Services Agreement is a comprehensive legal contract that establishes the professional relationship between financial advisors and their clients in Saudi Arabia. This document ensures compliance with the Capital Market Authority (CMA) regulations, Shariah law principles, and Saudi Arabian commercial law while protecting both parties' interests throughout the advisory relationship.

When do you need this document?

You need this agreement whenever providing or receiving financial advisory services in Saudi Arabia. Investment banks require it when offering portfolio management advice to institutional clients. Asset management companies use it to formalize relationships with family offices and high-net-worth individuals. Financial advisory firms need it for corporate restructuring consultations or merger and acquisition advice. Government entities require this agreement when engaging external financial advisors for public investment strategies. Fund managers must have this in place before providing investment advice to pension funds or sovereign wealth funds.

Key legal considerations

The agreement must clearly define the scope of advisory services while establishing appropriate limitations to avoid unauthorized securities activities. Fee structures require transparency and must comply with CMA guidelines on advisor compensation. Confidentiality clauses are crucial given the sensitive nature of financial information shared during the advisory relationship. Risk disclosure provisions must adequately inform clients about potential investment risks and market volatility. The agreement should include robust indemnification clauses protecting both parties from regulatory violations. Termination provisions must specify notice periods and procedures for concluding the advisory relationship while protecting ongoing client interests.

Legal requirements in Saudi Arabia

Financial advisors must hold valid licenses from the Capital Market Authority under the Authorized Persons Regulations before entering any advisory agreements. The agreement must demonstrate compliance with Securities Business Regulations governing the conduct of financial advisory activities. Anti-Money Laundering Law requirements mandate proper client identification, due diligence procedures, and suspicious transaction reporting mechanisms. For banking-related advisory services, compliance with SAMA's Banking Control Law is essential. All advisory services must align with Shariah principles, requiring appropriate Islamic finance structuring and avoiding prohibited activities such as excessive speculation or interest-based transactions. The agreement must be executed in Arabic or include certified Arabic translations to ensure enforceability under Saudi commercial law. Dispute resolution mechanisms should specify Saudi courts or recognized arbitration centers as the governing jurisdiction for any conflicts arising from the advisory relationship.