Break Away From The Pack

Why is a nondisclosure agreement critical for your firm?

On Behalf of | Jan 3, 2022 | RIA Formation |

People who turn to anyone for help with their finances will count on that person to remain quiet about what’s going on. When you’re career is in the financial industry, you must be careful not to violate a client’s trust. Anyone who’s starting their own firm should pave the way for this by using nondisclosure agreements

There are certain elements that must be present in any confidentiality agreement. If you don’t ensure that you have all the required information in the contract, it might be hard for you to uphold it if it’s broken. 

Elements of a nondisclosure agreement

At a minimum, you must include the following points in the nondisclosure agreement:

  • The parties who are part of the agreement
  • How the information covered can be used
  • The time period during which the agreement is valid
  • Information about what’s confidential
  • Notes about any exceptions to the confidentiality

There’s a chance that you’ll need to include other points in the contract. These are known as miscellaneous provisions. Typically, it’s best to have a solid confidentiality agreement that doesn’t leave any guesswork. This helps to protect your firm and your clients. 

You must ensure that you have everything in order when you start your own firm. One thing that you have to do is to protect the clients who will come to you for financial services. If you have other employees joining the firm, you have to get a nondisclosure agreement in place with each of them. Working with someone who’s familiar with financial industry contracts is important so you can get everything set up in the proper manner.