Is an electronic signature valid?

Yes. Electronic signatures are generally enforceable under the ESIGN Act (15 U.S.C. §7001) and UETA where adopted; ensure intent, consent, attribution, and retention to meet legal tests.

Who must sign the agreement?

Authorized representatives with corporate signing authority should sign; also maintain board resolutions or powers of attorney as proof of authority for audits or disputes.

Do clients need notice of delegation?

Primary advisers should disclose material delegation arrangements in Form ADV and client documentation per SEC guidance; ensure disclosures align with the agreement’s terms.

When is notarization required?

Notarization is not typically required for subadvisory contracts, but specific state or entity rules may require notarization for supporting corporate documents or POAs; verify state practice.

Can the agreement be amended electronically?

Yes, with proper execution and recordkeeping. Amendments should follow the amendment clause procedures and retain the same level of signer authentication and audit trail.

How long must signed copies be kept?

Retain executed agreements per retention policies and applicable law; IRS records three years (IRC §6501(a)) and industry rules may require longer retention.

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Subadvisory Agreement

Subadvisory Agreement

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

What a Subadvisory Agreement Is and When It Applies

A Subadvisory Agreement is a written contract under which a primary investment adviser delegates discretionary portfolio management or investment research to a third-party subadviser while retaining overall responsibility to clients. The agreement defines scope of services, investment guidelines, fee allocation, reporting and recordkeeping, compliance with regulatory obligations, indemnities, and procedures for termination and transition. It is commonly used by registered investment advisers, mutual funds, and institutional asset managers to outsource portfolio management without transferring ultimate fiduciary duties or regulatory responsibilities.

Why a Clear Subadvisory Agreement Matters

A well-drafted Subadvisory Agreement allocates responsibilities, protects client interests, reduces regulatory risk, and clarifies fees and reporting between adviser and subadviser.

Who Typically Uses a Subadvisory Agreement

Common users include primary investment advisers arranging delegated management, asset managers, and fund sponsors.

Registered investment advisers managing client accounts who outsource portfolio management or specialist strategies.
Mutual fund boards and ETF sponsors engaging subadvisers for sector or strategy expertise.
Institutional investors and pension plans that require contractual duties and reporting from subadvisers.

The agreement should be tailored to the parties’ regulatory status, client disclosures, and operational needs.

Core Provisions to Include in a Professional Subadvisory Agreement

These six components form the backbone of an enforceable, compliant subadvisory arrangement and reduce ambiguity between parties.

Scope of Services

Describe specific investment authority, discretionary limits, approved instruments, and any prohibited transactions to align subadviser actions with client mandates.

Investment Guidelines

State objective, benchmarks, concentration limits, risk tolerances, ESG filters, leverage rules, and rebalancing triggers to guide portfolio decisions.

Fees and Allocation

Specify fee structure, invoicing intervals, expense reimbursements, and how gross or net performance fees are calculated and allocated between parties.

Reporting and Audits

Set regular reporting cadence, required performance reports, position-level statements, access for audits, and delivery format and recipients.

Compliance and Representations

Include firm-level representations, regulatory compliance obligations, disclosures to clients, insider trading controls, and supervisory responsibilities.

Termination and Transition

Define notice periods, transition assistance, custody handoff, data return, and post-termination trading restrictions to avoid disruption to clients.

Stepwise Process to Complete and Execute the Agreement

Follow these sequential steps to prepare, sign, and archive a Subadvisory Agreement for compliance and operational readiness.

01

Draft and Review: Assemble template, legal counsel review, and compliance review.
02

Agree Terms: Negotiate scope, fees, and termination mechanics.
03

Signatures: Collect authorized signatures and dates from both parties.
04

Distribute and Archive: Deliver executed copies to compliance, custodian, and records.

How to Configure an Online Signing Workflow

Set up a digital workflow that ensures correct signer order, authentication, and retention of the final executed file.

Field	Configuration
Signer Order	Set primary adviser then subadviser sequential signing.
Authentication	Use email plus SMS code or stronger methods for high-value accounts.
Reminders	Enable automated reminders every 3–7 days until execution.
Retention	Store signed PDF plus audit trail for the required retention period.

Where Executed Copies Should Be Sent

Distribute the fully executed agreement to the right parties to maintain regulatory and operational continuity.

Primary Adviser: Keep an executed original in compliance records.
Subadviser: Provide an executed copy for their corporate records.
Custodian: Send to custodian for account-level instructions.
Fund Board / Compliance: Deliver copies to board and compliance teams as required.

Digital Signing and System Integration Considerations

Choose an eSignature provider that supports audit trails, secure storage, and applicable compliance addenda.

Authentication: Email, SMS, or stronger methods.
Integrations: Salesforce, NetSuite, Microsoft 365 compatibility.
Export Formats: PDF, DOCX, and audit log export.

Ensure the platform can deliver tamper-evident signed PDFs, export signing certificates, and integrate with your document repository or CRM for automated recordkeeping and audits.

Typical Timing and Notice Periods to Include

Specify contractual dates and recurring reporting deadlines to avoid misunderstandings and missed obligations.

Effective Date:

Defines when authority and fees begin.

Termination Notice:

Commonly 30–90 days written notice required.

Quarterly Reports:

Set delivery timing for performance and holdings.

Annual Review:

Schedule compliance and performance reviews annually.

Transition Timeline:

Define days for custody transfer and trading halt.

Key Implementation Milestones for a New Subadvisory Relationship

Track milestones from negotiation to first funded account to ensure smooth operational handoff.

01

Negotiation Complete

All commercial terms agreed and documented.

02

Legal Approval

Counsel and compliance approval obtained.

03

Execution

Signed by authorized representatives of both parties.

04

Account Funding

Custodian receives instructions and assets transfer completes.

Common Preparation and Execution Errors to Avoid

Leaving performance benchmarks vague, which creates interpretive disputes and regulatory questions.
Failing to specify exact fee calculation methods that cause billing disputes and reconciliation errors.
Omitting required client disclosures or failing to notify clients per adviser fiduciary duties.
Allowing an unauthorized signatory to execute the agreement without proper corporate documentation.

Primary Legal and Operational Risks

Fiduciary Breach: Regulatory enforcement risk.

Contractual Liability: Indemnity and damages exposure.

Client Claims: Fee disputes or performance litigation.

Data Exposure: Unauthorized disclosure of client information.

Transition Risk: Market dislocation during handoff.

Termination Costs: Potential early-exit expenses.

Essential Data Elements to Capture in the Agreement

Parties: Full legal names

Effective Date: MM/DD/YYYY

Asset Scope: Permitted asset classes

Fees: Compensation terms

Reporting: Frequency and format

Signatures: Names, titles, dates

Who Typically Signs and What Authority They Need

Chief Compliance Officer

The CCO typically reviews and certifies that the arrangement meets regulatory obligations and internal policies; their approval is required in many firms for delegations of discretionary authority.

Authorized Signatory

An officer or person with board-authorized signature authority signs on behalf of the entity; provide corporate resolution or power-of-attorney documentation when requested.

Practical Examples of Subadvisory Arrangements

Two concise scenarios illustrate common uses and operational outcomes when delegating portfolio management.

Institutional Overlay

A pension plan hires a specialist subadviser for emerging-market bonds

Specialist manages a carve-out mandate
The primary adviser retains fiduciary oversight, requires quarterly reporting, and enforces strict liquidity rules during transition.

Mutual Fund Strategy

A mutual fund sponsor engages a boutique manager for small-cap equities

Boutique provides discretionary trading within defined limits
The fund’s board receives monthly performance and compliance reports and can terminate with defined notice and transition support.

eSignature Vendor Pricing Snapshot for Agreement Execution

Compare core pricing and capability characteristics for common eSignature providers to inform vendor selection for Subadvisory Agreement workflows.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	Varies by vendor	Varies by vendor	Varies by vendor	Varies by vendor
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No
Envelope Cap	No cap	100 envelopes/user/year	Varies by plan	Varies by plan	Varies by plan

Frequently Asked Questions About Subadvisory Agreements and eSigning

Answers to common legal, operational, and signing questions to help avoid delays or compliance problems.

Need help? Contact support

Is an electronic signature valid?
Yes. Electronic signatures are generally enforceable under the ESIGN Act (15 U.S.C. §7001) and UETA where adopted; ensure intent, consent, attribution, and retention to meet legal tests.
Who must sign the agreement?
Authorized representatives with corporate signing authority should sign; also maintain board resolutions or powers of attorney as proof of authority for audits or disputes.
Do clients need notice of delegation?
Primary advisers should disclose material delegation arrangements in Form ADV and client documentation per SEC guidance; ensure disclosures align with the agreement’s terms.
When is notarization required?
Notarization is not typically required for subadvisory contracts, but specific state or entity rules may require notarization for supporting corporate documents or POAs; verify state practice.
Can the agreement be amended electronically?
Yes, with proper execution and recordkeeping. Amendments should follow the amendment clause procedures and retain the same level of signer authentication and audit trail.
How long must signed copies be kept?
Retain executed agreements per retention policies and applicable law; IRS records three years (IRC §6501(a)) and industry rules may require longer retention.

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