Draft Markup Of Investment Advisory Agreement

---
name: draft-markup-of-investment-advisory-agreement
task_id: funds-asset-management/draft-markup-of-investment-advisory-agreement
description: Redline an investment adviser's form advisory agreement from the client's perspective, producing a marked-up draft with a cover memo that prioritizes changes by negotiating importance and ties each proposed modification to the applicable legal, regulatory, or client-policy basis.
activates_for: [planner, solver, checker]
---

# Skill: Client-Protective Redline of Investment Advisory Agreement

## 1. Subject-matter triage

- Treat the form agreement as adviser-drafted and client-protective redrafting as the objective.
- Read the supporting documents first and extract any client-specific requirements, operational constraints, investment-policy terms, or prior negotiation positions that must be translated into markup.
- If the task references multiple supporting documents, enumerate them and reconcile them before drafting; do not assume consistency across materials.
- Build the redline from the client’s perspective: preserve necessary commercial functionality, but elevate protections that affect control, compliance, termination, data access, and liability.

## 2. Failure modes the skill is correcting

- Redline focuses on economics while missing control, compliance, transition, and risk-allocation provisions that matter most to a fiduciary client.
- Cover memo describes proposed edits without grounding them in legal authority, regulatory requirement, or client policy.
- Draft lumps all changes together instead of separating core protections from negotiable preferences.
- Supporting documents are reviewed but not converted into actual markup changes.
- Markup is visually edited but not robustly encoded, making changes disappear in plain-text or export workflows.
- Recommendations are stated as issues only, without an actionable next step or responsible owner.
- Legal propositions are asserted conclusively without naming the authority that supports them.

## 3. Legal frameworks / domain conventions that apply

- Review assignment language for consistency with the governing adviser-rule framework and any contract-consent limitations; if transfer-of-control effects are relevant, preserve client consent rights rather than relying on a narrow formalistic definition.
- If the agreement permits use of client brokerage commissions for research or other services, narrow the clause to the applicable safe-harbor standard and require client-appropriate disclosure and periodic reporting under the governing advisory-disclosure rules.
- Require ongoing delivery of the adviser’s current brochure and material updates on the timing required by the applicable advisory-disclosure regime.
- Add transition-assistance obligations so termination does not strand the client: account records, portfolio data, coordination with successor personnel, and non-interference with the handoff.
- Review limitation-of-liability and indemnity provisions to prevent shifting ordinary-negligence risk away from the adviser where client protection is warranted.
- Confirm fee proration through termination and remove post-termination charges, penalties, or non-refundable fees that conflict with the client’s economics.
- Add prompt notice of material regulatory proceedings, examinations, disciplinary events, or other matters that could affect performance.
- Translate any client-policy requirement in the source materials into actual agreement language; do not leave it only in the memo.
- Cite controlling authority for each legal proposition relied on, using the statute, regulation, rule, or recognized authority that supports the position.

## 4. Analytical scaffolds

- Start by listing the relevant supporting documents and extracting every client-specific requirement that bears on the agreement.
- Identify each proposed change, assign it a clear severity level using a consistent ordinal scale defined once in the cover memo, and explain the practical exposure if the point is not accepted.
- For each substantive redline, pair the markup with a short rationale that ties the change to the governing rule, contract principle, or client policy.
- Separate provisions into: must-have protections, important protections, and preferred negotiating positions.
- Where multiple counterpart provisions interact, read them together and reconcile conflicts rather than redlining a clause in isolation.
- For each issue or proposal, include the operative legal basis, the relevant contract interaction, and the downstream consequence for the client.
- Close the deliverable with concrete recommended actions that name the responsible role and the timing urgency.

## 5. Vertical / structural / temporal relationships

- Track the agreement vertically: definitions, operative covenants, compensation, disclosures, termination, liability, confidentiality, assignment, transition, and boilerplate should be checked for internal consistency.
- Read cross-references both directions; a change in one section may require conforming edits elsewhere.
- Treat timing language as substantive: notice periods, cure periods, delivery schedules, termination effective dates, and post-termination obligations should be harmonized.
- If the form uses multiple versions, exhibits, schedules, or incorporated policies, ensure the redline reflects them as a single integrated contract package.
- When a provision depends on an external document or client policy, align the contract text to that document’s timing and operational mechanics rather than paraphrasing it abstractly.

## 6. Output structure conventions

- Produce a single deliverable: the marked-up advisory agreement with a cover memo prepended.
- The cover memo should be organized by negotiating priority, using an explicit ordinal severity scale defined once at the top.
- For each memo entry, state the change, the legal/regulatory/client-policy basis, the client exposure if not accepted, and the recommended negotiation posture.
- The markup must be readable from plain text and must not depend on formatting alone; mark deletions, insertions, and substitutions with explicit textual conventions and attach a brief rationale to each substantive change.
- Ensure every substantive change is captured in the operative draft, not merely described in commentary.
- Use industry-conventional sectioning and headings appropriate for a redlined advisory agreement; do not mirror any hidden checklist structure.
- End with a Recommended Actions block stating the action, the responsible role, and the timing anchor for each recommendation.