Agreements between an investment advisor and his client will be translated into an investment management agreement. While the advisor usually announces his or her own form of agreement, the client must make certain decisions, can negotiate certain points and must in any case understand the fundamental terms of the agreement. If you are the customer, some of the basic conditions that you want to keep in mind are: the agreement should describe how the advisor will trade assets on the account as soon as a decision is made to buy or sell. If the advisor acts through a related broker, you should get some certainty that you will get the best total price. The agreement will often allow the consultant to obtain research or brokerage services from the brokers he uses. This is permissible, but you should be aware that the advisor will have a financial interest in using these brokers. You can also order the advisor to act through a particular broker, but this can increase your trading fees. Investment management agreements generally provide that the advisor is not held liable to the client if he has no intentional misconduct, bad faith, simple or serious negligence and/or breach of the duty of loyalty. Some agreements may also provide that the client compensates the advisor for third-party claims. While you should try to reduce these types of rules, advisors tend to resist significant changes. In addition, consultants are not allowed to limit debts they would otherwise have under securities legislation. Under the Property Management Agreement, AUPM is entitled to a combined royalty for asset management and financial management services of 2% per annum of the gross operating income budgeted for each property and all real estate acquired later by the fund or sub-trust and which are not excluded from the choice of trustees of the fund (hereafter: managed properties).
The fee is paid monthly late and is aligned with actual gross operating income at the end of each fiscal year. If the combined vacancy rates of managed real estate are greater than 15%, the gross operating result is considered to be 85% of the combined gross operating income of real estate, as if the real estate did not have a vacancy. The agreement should consist of whether you or the advisor is competent for non-voting rights regarding the securities on the account. Some councillors do not like to elect substitutes because of the administrative burden. However, proxies can be important (for example. B a vote on an upcoming acquisition) and the advisor is often in a better position to assess the issues and ensure that your vote is recorded on time.