What is the purpose of an investment management agreement in the investment process?

The purpose of an investment management agreement in the investment process is to formally document the terms of an agreement between two parties, usually an investor and an investment management firm. The agreement outlines the investment strategy and goals, the responsibilities of the investment advisor, and the fees the investor pays for the management services. The agreement is intended to protect both the investor and the manager. It provides a clear understanding of the roles and expectations of each party, helping to ensure that the investment process goes smoothly. The agreement also includes disclosures which both parties must agree to, such as the amount of risk the investor is willing to take, and any limitations on the manager’s ability to conduct transactions. In Washington, investment management agreements are governed by the Washington Investment Management Act. This act requires that all investment management agreements be written and must include the following information: the names of the investor and the manager, the scope and nature of the services to be performed by the manager, the fees and other compensation to be paid to the manager, the investment objectives, the investment guidelines, and the termination or renewal provisions. The agreement also allows for clear communication between the investor and the manager regarding any changes to the strategy or goals. The investment management agreement is an important part of the investment process and is a requirement in Washington.

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What is the purpose of an investment management agreement in the investment process?

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