The engagement letter documents the nature and scope of the engagement and reduces the planner's legal risk in connection with it. If we elect to terminate our services for nonpayment, our engagement will be deemed to have been completed even if we have not completed our report. You should not rely on any advice that has not been fully reviewed and put in writing by our firm. Planners who are RIAs or who sell securities may want to consider including arbitration clauses in their investment advisory contracts. Settling disputes with clients through an arbitration process rather than through the courts has several advantages.
Arbitration is generally faster and less expensive for both the planner and the client.
Arbitration proceedings are far less formal than the court system, and the resulting decisions are known only to the parties involved in the dispute. Situations can arise, however, where the structure and authority of a trial in the courts are desirable. An arbitration clause should not be inserted into the planner's investment advisory agreement without review and approval by legal counsel. The material in this article was adapted from PPC's newly revised Guide to Retirement Planning . Practitioners Publishing Company.