Investment Advisory Agreement (Nigeria)
INVESTMENT ADVISORY AGREEMENT
Investment and Securities Act 2024 | SEC Nigeria Rules and Regulations | Companies and Allied Matters Act 2020
THIS INVESTMENT ADVISORY AGREEMENT is made this [Date of Agreement]
BETWEEN:
(1) [Adviser Name] (RC No: [Adviser RC], SEC Reg No: [SEC Registration Number]) of [Adviser Address] (hereinafter referred to as the "Adviser"); AND
(2) [Client Name] (RC No: [Client RC]) of [Client Address] (hereinafter referred to as the "Client").
1. APPOINTMENT AND MANDATE
1.1 The Client hereby appoints the Adviser as its [Mandate Type] investment adviser in respect of the Client's portfolio with an initial value of [Portfolio Value] (the "Portfolio").
1.2 The Adviser is registered with the Securities and Exchange Commission (SEC) Nigeria under the Investment and Securities Act 2024 as an Investment Adviser (Corporate) under Registration No. [SEC Registration Number].
1.3 The investment objective of the Portfolio is [Investment Objective], with a risk tolerance of [Risk Tolerance].
1.4 The Adviser shall invest the Portfolio in the following permitted asset classes: [Asset Classes].
2. FEES
2.1 The Client shall pay the Adviser an annual management fee of [Management Fee].
2.2 Performance fee: [Performance Fee].
2.3 All fees are subject to Value Added Tax (VAT) at 7.5% under the VAT Act (Cap V1, LFN 2004). The Client (if a company) shall deduct Withholding Tax (WHT) at 10% from fee payments and remit to the Federal Inland Revenue Service (FIRS) within 21 days of month of payment.
3. FIDUCIARY DUTIES AND CONFLICT OF INTEREST
3.1 The Adviser shall act in the Client's best interest at all times and shall exercise the standard of care, skill, and diligence expected of a registered investment adviser under the Investment and Securities Act 2024 and the SEC Nigeria Rules and Regulations.
3.2 The Adviser shall disclose to the Client in writing any material conflict of interest before undertaking any transaction that may be affected by such conflict, including any proprietary positions, affiliate relationships, or commission arrangements.
3.3 The Adviser shall maintain Client funds and securities in segregated accounts, clearly separate from the Adviser's own assets, in compliance with SEC Nigeria's Client Asset Protection Rules.
4. REPORTING
4.1 The Adviser shall provide the Client with [Reporting Frequency] portfolio statements showing holdings, valuations, transactions, and performance against the agreed benchmark.
4.2 The Adviser shall provide an annual Capital Gains Tax (CGT) schedule showing realised gains and losses for submission to the Federal Inland Revenue Service (FIRS) under the Capital Gains Tax Act (Cap C1, LFN 2004).
5. TERM AND TERMINATION
5.1 This Agreement shall commence on [Date of Agreement] and continue until terminated by either party giving [Termination Notice] written notice to the other.
5.2 The Adviser may terminate immediately if the Client fails to pay fees within 30 days of the due date or if the Client's instructions would require the Adviser to act in breach of the ISA 2024 or SEC Nigeria Rules.
5.3 On termination, the Adviser shall deliver the Portfolio to the Client or its nominated custodian within 10 business days, subject to deduction of all outstanding fees and expenses.
6. GOVERNING LAW
6.1 This Agreement is governed by the laws of Nigeria and the laws of [Governing State] State. The Federal High Court has jurisdiction over disputes arising under the Investment and Securities Act 2024. Other disputes may be submitted to arbitration under the Arbitration and Mediation Act 2023.
Adviser (authorised signatory)
________________
Signature
Client
________________
Signature
What Is a Investment Advisory Agreement (Nigeria)?
An Investment Advisory Agreement in Nigeria sets out the rights, duties and consideration binding the parties to it.
Under the Investment and Securities Act 2007 (and now the ISA 2024), any person who, for compensation, engages in the business of advising others on the value of securities or the advisability of investing in, purchasing, or selling securities must be registered as an Investment Adviser with SEC Nigeria. Two categories of registration exist: Investment Adviser (Corporate) for firms, and Portfolio Manager for individuals managing client portfolios on a discretionary basis. Unregistered persons providing investment advisory services in Nigeria commit an offence under the ISA and are liable to criminal prosecution and fines.
The Capital Market Operators Regulations issued by SEC Nigeria require investment advisers to maintain minimum paid-up capital, keep client funds segregated from firm funds, maintain proper books of account, and file periodic reports with SEC. Fiduciary duties attach to investment advisers under Nigerian securities law: the adviser must act in the client's best interest, disclose all conflicts of interest, and not churn client portfolios to generate commissions.
An Investment Advisory Agreement must be distinguished from a Stockbroking Agreement, under which a broker executes securities transactions on behalf of a client as agent, and from a Fund Management Agreement, under which a fund manager manages a collective investment scheme (CIS) regulated under the SEC Rules on Collective Investment Schemes. The Investment Advisory Agreement governs a direct advisory relationship between the adviser and an individual or institutional client.
The legal framework governing the Investment Advisory Agreement (Nigeria) in Nigeria draws on several key statutes and regulatory bodies. Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Parties executing a Investment Advisory Agreement (Nigeria) in Nigeria should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Investments and Securities Act 2007 sets the foundational requirements.
When Do You Need a Investment Advisory Agreement (Nigeria)?
An Investment Advisory Agreement in Nigeria is required whenever a SEC-registered investment adviser formally engages a client to provide portfolio advice or discretionary investment management services.
An Investment Advisory Agreement is needed when a SEC-registered Portfolio Manager or Investment Adviser (Corporate) enters into a mandate with a high-net-worth individual or family office in Nigeria to manage a portfolio of equities listed on the Nigerian Exchange Group (NGX), Federal Government of Nigeria (FGN) Bonds, Treasury Bills, and other capital market instruments.
An Investment Advisory Agreement is required when a pension fund administrator (PFA) licensed by the National Pension Commission (PenCom) engages an external investment adviser to provide recommendations on pension fund asset allocation under the Pension Reform Act 2014 and PenCom's Investment Regulation for Pension Fund Assets.
An Investment Advisory Agreement is needed when a Nigerian institutional investor — such as an insurance company regulated by the National Insurance Commission (NAICOM), a bank's asset management subsidiary, or a university endowment fund — appoints an external investment adviser to manage a portion of its investment portfolio.
An Investment Advisory Agreement is required when a foreign asset management firm licensed to operate in Nigeria through a SEC-registered local entity enters into advisory mandates with Nigerian corporate clients or government agencies, documenting the advisory scope, fee structure, and regulatory compliance obligations.
An Investment Advisory Agreement is needed when a fintech platform offering robo-advisory or algorithmic investment management services to retail clients in Nigeria must document the advisory relationship, disclosures, and fee structure in compliance with SEC Nigeria's fintech-related guidelines and the ISA 2024.
Parties in Nigeria should prepare a Investment Advisory Agreement (Nigeria) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.
What to Include in Your Investment Advisory Agreement (Nigeria)
A valid Investment Advisory Agreement in Nigeria must contain the following essential elements to comply with SEC Nigeria's requirements and protect both parties.
Parties and SEC Registration: Full legal names, CAMA 2020 RC numbers, and addresses of the adviser and client. The adviser's SEC Nigeria registration number and category (Investment Adviser Corporate / Portfolio Manager) must be stated. Operating without SEC registration is a criminal offence under the ISA 2024.
Scope of Services: A precise description of the advisory services — whether non-discretionary (adviser recommends, client decides) or discretionary (adviser has authority to execute transactions without prior client consent for each trade). For discretionary management, the client must grant a written limited power of attorney or express written authority to the adviser.
Investment Mandate and Objectives: The client's investment objectives (capital preservation, income, growth), risk tolerance (conservative, moderate, aggressive), investment horizon, and any restrictions on the types of securities or sectors the adviser may invest in.
Fees: The advisory fee structure — whether an annual management fee (expressed as a percentage of assets under management, typically 0.5%–2% per annum), a performance fee (a percentage of returns above a stated benchmark), or a flat retainer. All fees must be disclosed upfront under SEC Nigeria's disclosure requirements.
Conflict of Interest Disclosure: An express disclosure of any conflicts of interest — including whether the adviser receives commissions from product providers (e.g., NGX-listed companies, mutual fund managers), has proprietary positions in recommended securities, or has affiliates that benefit from client transactions.
Client Reporting: The frequency and format of portfolio statements, performance reports, and tax reporting (e.g., annual Capital Gains Tax schedules under the Capital Gains Tax Act, Cap C1, LFN 2004).
Risk Disclosure: A written risk disclosure statement signed by the client acknowledging the risks of investing in Nigerian capital markets, foreign exchange risk, inflation risk, and liquidity risk.
Termination: The notice period for termination, the treatment of open positions on termination, and the return of client assets.
Governing Law: Nigerian law, with SEC Nigeria as the primary regulatory authority and the Federal High Court having jurisdiction over ISA disputes.
Additional compliance elements for a Investment Advisory Agreement (Nigeria) used in Nigeria include: Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Forms-legal.com provides this template as a starting point for Nigeria-compliant documentation.
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Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Investment Advisory Agreement (Nigeria) (Nigeria) [Legal document template]. Forms Legal. https://forms-legal.com/nigeria/financial/agreements/investment-advisory-agreement-nigeria
"Investment Advisory Agreement (Nigeria) (Nigeria)." Forms Legal, 2026, https://forms-legal.com/nigeria/financial/agreements/investment-advisory-agreement-nigeria.
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author = {{Forms Legal}},
title = {Investment Advisory Agreement (Nigeria) (Nigeria)},
year = {2026},
howpublished = {\url{https://forms-legal.com/nigeria/financial/agreements/investment-advisory-agreement-nigeria}},
note = {Free legal document template. Based on Investments and Securities Act 2007}
}Frequently Asked Questions
Yes. Under the Investment and Securities Act 2024 (ISA 2024), which replaced the Investment and Securities Act 2007 (ISA 2007), any person who for compensation advises clients on the value of securities, the advisability of investing in securities, or manages client investment portfolios must be registered with the Securities and Exchange Commission (SEC) Nigeria as a Capital Market Operator. The relevant registration categories for investment advisers are Investment Adviser (Corporate) for registered companies and Portfolio Manager for individuals. SEC Nigeria requires applicants to meet minimum paid-up capital requirements, pass prescribed competency examinations, and submit to ongoing supervision. Operating as an unregistered investment adviser is a criminal offence under the ISA 2024 and may result in prosecution, fines, and orders to refund client funds. Clients should verify an adviser's registration on the SEC Nigeria Capital Market Operators database before signing any Investment Advisory Agreement.
Investment advisers registered with SEC Nigeria may charge clients fees in several forms, subject to disclosure and SEC guidelines. Management fees (typically 0.5%–2% per annum of assets under management) are the most common, deducted quarterly from the client's portfolio. Performance fees — a percentage (typically 10%–20%) of returns above a benchmark such as the Nigerian Exchange Group (NGX) All Share Index or the CBN Treasury Bill rate — may be charged if disclosed and agreed in the Investment Advisory Agreement. Fixed retainer fees for non-discretionary advisory services are also permitted. SEC Nigeria's rules require all fees to be clearly stated in the client agreement and periodically reviewed. Advisers must not charge fees that create incentives to churn client portfolios — this would constitute a breach of the adviser's fiduciary duty and a violation of SEC Rules and Regulations.
In a discretionary investment advisory arrangement in Nigeria, the investment adviser has full authority to make investment decisions and execute transactions on behalf of the client without obtaining the client's prior approval for each individual trade, within the boundaries of the agreed investment mandate. Discretionary management is governed by SEC Nigeria's Portfolio Manager regulations and requires the client to grant the adviser written authority (typically a limited power of attorney) to act on their behalf. In a non-discretionary advisory arrangement, the adviser makes recommendations but the client makes the final decision on each investment — the adviser cannot execute any trade without the client's express instruction. Most retail investment advisory relationships in Nigeria are non-discretionary. The Investment Advisory Agreement must clearly state which model applies, as the adviser's liability exposure differs significantly: a discretionary manager bears greater responsibility for individual investment decisions.
Investment advisory fees received by a Nigerian investment adviser are subject to Companies Income Tax (CIT) at the applicable rate under the Companies Income Tax Act (CITA, Cap C21, LFN 2004) — 30% for large companies, 20% for medium companies (turnover NGN 25 million–NGN 100 million), and 0% for small companies (turnover below NGN 25 million) under the Finance Act 2019 amendments. Value Added Tax (VAT) at 7.5% under the VAT Act (Cap V1, LFN 2004) as amended by the Finance Act 2020 applies to investment advisory services supplied in Nigeria. The client (if a company) must deduct Withholding Tax (WHT) at 10% from advisory fees paid to a corporate adviser and remit to FIRS within 21 days. Capital gains earned by clients on securities transactions are subject to Capital Gains Tax (CGT) at 10% under the Capital Gains Tax Act (Cap C1, LFN 2004). Investment income (dividends) is subject to WHT at 10% under CITA.
An investment adviser in Nigeria who breaches their fiduciary duty to a client may face liability under both civil law and regulatory enforcement. Civilly, the client may sue the adviser in the Federal High Court (which has jurisdiction over capital market disputes under Section 251 of the Constitution of the Federal Republic of Nigeria 1999) for damages, disgorgement of profits made at the client's expense, and rescission of the advisory agreement. Under the Investment and Securities Act 2024 (ISA 2024), SEC Nigeria has powers to: suspend or revoke the adviser's registration; impose administrative fines; order restitution to affected clients; and refer cases for criminal prosecution. Specific fiduciary breaches include: front-running (trading on foreknowledge of client orders); churning (excessive trading to generate commissions); recommending unsuitable products; and failing to disclose conflicts of interest. The SEC Nigeria Enforcement Division actively monitors capital market operators and publishes enforcement actions on the SEC website.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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