Non Discretionary Investment Advisory Agreement Template for South Africa

The Non Discretionary Investment Advisory Agreement is a crucial document used in the South African financial services sector when establishing a formal relationship between an investment advisor and a client where the client retains final decision-making authority over all investment decisions. This agreement is essential for compliance with the Financial Advisory and Intermediary Services (FAIS) Act and must be implemented when providing regulated financial advisory services in South Africa. It outlines the scope of advisory services, fee structures, risk disclosures, and compliance requirements while explicitly stating that the advisor cannot make investment decisions without the client's approval. The document incorporates necessary provisions to meet regulatory requirements, including FICA compliance, POPIA data protection measures, and mandatory disclosures under South African financial services laws.

1. Parties: Identification of the investment advisor and the client, including registration details and FSCA license numbers

2. Background: Context of the agreement and brief overview of the advisory relationship being established

3. Definitions: Key terms used throughout the agreement, including regulatory definitions from FAIS Act

4. Scope of Services: Detailed description of non-discretionary investment advisory services, explicitly stating the advisor's non-discretionary role

5. Appointment and Authority: formal appointment of the advisor and limits of their authority, emphasizing the non-discretionary nature

6. Duties and Responsibilities: Specific obligations of both advisor and client, including communication protocols and decision-making process

7. Investment Process: Description of how investment advice will be provided and implemented, requiring client approval for all transactions

8. Fees and Charges: Comprehensive fee structure, including advisory fees, third-party costs, and payment terms

9. Risk Disclosures: Mandatory risk warnings and disclosures as required by FAIS Act

10. Representations and Warranties: Standard declarations by both parties regarding capacity, authority, and compliance

11. Confidentiality and Data Protection: POPIA compliance provisions and confidentiality obligations

12. Duration and Termination: Term of agreement, termination rights and procedures

13. General Provisions: Standard legal clauses including governing law, notices, and amendment procedures