What Should a Stock Advisory Agreement Include?

This guide provides a practical six-point framework for reviewing a stock advisory agreement covering service scope, fees, risk disclosures, termination rights, grievance redressal and regulatory identity.

Investing time in the stock advisory agreement review before signing is significantly easier than resolving disputes after service has begun. The agreement is the legal foundation of the advisory relationship and should be read in full before any payment is made.

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Service Scope — What Is and Is Not Included

A stock advisory agreement should define clearly what the client is purchasing. For SEBI Research Analyst services, this covers research recommendations with entry, target, stop-loss and rationale. For Investment Adviser services, it also covers risk profiling, suitability and personalised advice. A stock advisory agreement using vague language like "investment guidance" or "market insights" without specifying regulatory basis and deliverables is insufficient. Investors should ask: what will I receive, in what format, at what frequency?

Fee Structure and Payment Mode

The stock advisory agreement must specify whether fees are fixed subscription or AUA, the amount or percentage, the billing frequency and any conditions under which fees may change. Any charges not in the stock advisory agreement that appear after signing are inconsistent with transparent terms.

Agreement Clause	What to Check	Red Flag
Service scope	Specific deliverables and format	Vague terms without regulatory basis
Fee structure	Amount, mode, billing frequency	Undisclosed add-on charges
Risk disclosures	Market risk acknowledgement	Absence of risk language or implied guarantees
Termination and refund	Notice period, refund policy	No client termination right

Risk Disclosures

A stock advisory agreement must include risk disclosures confirming that investments are subject to market risk and no guaranteed returns are offered. SEBI prohibits guaranteed return claims for registered Research Analysts and Investment Advisers. Any stock advisory agreement implying guaranteed outcomes or fixed returns is either non-compliant or from an unregistered entity.

Termination Rights and Refund Policy

The stock advisory agreement should specify how either party can terminate, the notice period, how advance fees are handled and whether refund of unexpired fees is provided. Current SEBI fee guidance specifies the framework for advance fee and proportionate refund for individual and HUF clients. Investors should verify this section before signing.

Grievance Redressal and Regulatory Identity

A complete stock advisory agreement identifies who to contact for complaints, expected resolution timelines and whether the platform participates in SEBI SCORES. It should also identify the legal entity, its SEBI registration number and registration category (Research Analyst or Investment Adviser). Platforms like Univest (SEBI RA Reg. No. INH000013776) publish their disclosure documents and terms on their official website. Verify the registration number at sebi.gov.in before signing any stock advisory agreement.

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Conclusion

A this advisory arrangement should cover six areas: specific service scope and deliverables, fee structure with mode and billing terms, risk disclosures confirming no guaranteed returns, termination and refund rights, a grievance redressal process and the SEBI registration number and entity name. Investors who review a this advisory service against this framework consistently make better-informed advisory subscription decisions.

FAQs

What should a this advisory service include?

Ans. A this advisory service should include: the scope of services and specific deliverables, the fee structure specifying amount, mode (fixed fee or AUA) and billing frequency, risk disclosures confirming investments are subject to market risk and no guaranteed returns are offered, termination and refund rights, the grievance redressal process and the SEBI registration number and entity name.

Is a this advisory service legally required?

Ans. A written client agreement is mandatory for SEBI-registered Investment Advisers under the IA Master Circular (February 2026). It must be signed before personalised advice is delivered. SEBI Research Analysts must maintain disclosure documents. An advisory platform that does not provide a written agreement before accepting payment may not be operating under a compliant framework.

What fee information should appear in the advisory agreement?

Ans. The agreement should specify the fee mode (fixed or AUA), the exact amount or percentage, the billing frequency, whether the fee can change and under what conditions, and refund terms if the agreement is terminated early. Charges not mentioned in the agreement that appear after signing are inconsistent with transparent advisory terms.

What risk disclosures must appear in an advisory agreement?

Ans. The agreement must state that investments in securities are subject to market risk and past performance does not guarantee future results. It must not include language suggesting guaranteed returns or assured profits. SEBI prohibits such claims. The absence of risk disclosure language is an immediate red flag.

How do I check termination and refund terms?

Ans. Look for the notice period to terminate, whether you have the right to terminate at any time, how advance fees are handled if you terminate early and whether refund of unexpired fees is provided. Under SEBI IA fee regulations, individual and HUF clients are entitled to proportionate refund of unexpired fees. Agreements that lack client termination rights are inadequate.

How do I verify the regulatory identity in an advisory agreement?

Ans. Look for the SEBI registration number in the agreement and on the platform's website. Verify it at sebi.gov.in confirming the entity name, registration category (RA or IA) and current active status. An agreement that does not disclose a SEBI registration number is from either an unregistered entity or lacks mandatory disclosures.