Investment Advisor Contract Template for Saudi Arabia

An Investment Advisor Contract is a legally binding agreement that establishes the formal relationship between a licensed investment advisor and their client in Saudi Arabia. Under the Capital Market Law and Securities Business Regulations, this contract is mandatory before any investment advisory services can commence and serves as the foundation for regulatory compliance with the Capital Market Authority (CMA).

When do you need this document?

You need this contract when engaging a CMA-licensed investment advisor for portfolio management, investment recommendations, or financial planning services. It's required for both individual and institutional investors seeking professional investment guidance, including high-net-worth individuals working with wealth management firms, corporations establishing investment partnerships, family offices managing generational wealth, and financial institutions offering advisory services. The contract is also essential for fund managers providing advisory services to investment companies and when establishing discretionary or non-discretionary investment management relationships.

Key legal considerations

The contract must clearly define the scope of advisory services, including whether advice covers conventional investments, Sharia-compliant products, or both. Fee structures, payment terms, and any performance-based compensation must be transparently disclosed. Risk disclosure provisions are critical, outlining investment risks and the advisor's liability limitations. Client asset protection measures must comply with Authorised Persons Regulations, including segregation requirements and custodial arrangements. The agreement should address confidentiality obligations, termination procedures, and dispute resolution mechanisms. Anti-money laundering compliance provisions are mandatory under Saudi law, requiring client identification and monitoring procedures.

Legal requirements in Saudi Arabia

Under the Capital Market Law (Royal Decree No. M/30), investment advisors must be licensed by the CMA and maintain compliance with Securities Business Regulations. The contract must include the advisor's CMA license number and specify authorized activities. Authorised Persons Regulations require specific client agreement provisions, including clear service descriptions, fee disclosures, and risk warnings. The agreement must comply with Anti-Money Laundering Law requirements, incorporating customer due diligence and reporting obligations. For Islamic finance products, the contract should reference Sharia compliance mechanisms and oversight procedures. All advisory agreements must be maintained for regulatory inspection and include provisions for CMA reporting requirements.