How do I Choose an Investment Advisor?

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  • Written By: Ken Black
  • Edited By: Andrew Jones
  • Last Modified Date: 22 December 2018
  • Copyright Protected:
    Conjecture Corporation
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Before choosing an investment advisor, also sometimes spelled investment adviser, you need to consider many factors such as experience, performance, and whether the individual has any certifications or licenses. Accessibility and personality may also be important considerations, especially if you are planning a great deal of contact with your advisor. Further, the function the advisor serves is also important. You may also want to consider whether you truly need an investment advisor, or a financial planner.

Though there is often no certification required to work in the field, some investment advisors may be certified with the Certified Planner Board of Standards. In most cases, an investment advisor is required to meet certain minimum standards as determined by the state. Usually, this is done through testing. Before hiring an advisor, ask him or her about any certifications or licenses and what they had to do to earn them. While these do not guarantee success, they do help demonstrate a certain level of knowledge.

Though most people are investing for the long term, if you think there may be times when you need to get in touch with your investment advisor quickly, then ask if, or how, that may be possible. In such cases, accessibility can be a big issue. Advisors who insist on only being contacted during office hours may not be the best fit for you. Many advisors who wish to be accessible offer their cell phone numbers and personal e-mail addresses to clients.


Experience and performance, at least on some level, are also important. In most cases, a young investment advisor will work with a seasoned professional when starting out. Over that period, he or she may be given increasingly larger levels of responsibility. At some point, the firm the advisor is working with should feel comfortable having them manage accounts on their own. Therefore, it never hurts to ask about experience, even if an advisor seems especially young.

Another important aspect you may wish to know is how the investment advisor is paid. This may seem like an invasive subject, especially if you are not used to asking such questions, but there are some legitimate reasons for knowing. Those who are paid a portion of the portfolios they manage have a vested financial interest in the the product, both short term and long term. Those paid a straight salary may be able to see the long-term picture more objectively. This is a personal choice each client must make.

Another factor to consider is whether you would rather have a financial planner working with you, instead of an investment advisor. A financial planner considers not only investments, but savings, expenditures and other financial situations a client may have. In many cases, a financial planner will be an investment advisor as well, but not all investment advisors are financial planners.



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