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Investment Advisor Search
- 6 Questions To ALWAYS Ask

Investment Advisor Search

Even highly intelligent business people often seek an elite-level investment advisor, but the search for the right one may become a challenge.

We all know that we’re smart enough to take care of ourselves and handle our own affairs. While we may be a genius in our chosen field, we’re also smart enough to know that we may need a little help when delving into other areas, such as financial management. We may be great at picking winners at the Kentucky Derby but there’s a huge difference between that and the stock market.

When you’re choosing someone to advise you in your money management matters, you want to be certain you’re getting the best you possibly can. You can start weeding out the field of applicants by asking a few questions up front.

Investment Advisor Search Question #1: Are you a registered investment advisor?

If the applicant answers “yes,” then he or she has a fiduciary duty to you as a client. That’s financial advisor lingo for saying he or she is required by law to put your needs first. If the reply includes the term “suitability,” that means he or she is held to a lower standard which requires he or she sell you what is appropriate for you but it doesn’t have to be in your best interest.

Investment Advisor Search Question #2: How do you expect to be paid for your services?

Your potential investment advisor should clearly lay out, in writing, how you are expected to pay for services rendered. There are three basic payment methods: fees based on an hourly rate, fees based on a percentage of portfolio value, and commissions paid per transaction.

There are a variety of intricacies that can sneak in when it comes to paying for advisory services, so be sure to do your homework. Look up some of the best financial investing literature then pour over the top stock market investment books so you’ll be armed with information before negotiating fees for services.

Investment Advisor Search Question #3: What’s your experience?

How long has the investment advisor been in practice? Where was he or she practicing? Ask about professional certifications, licenses or designations. Some recognized signals of credibility include Certified Financial Planner (CFP), Chartered Financial Consultant (ChFC), and Certified Public Accountant – Personal Financial Specialist (CPA-PFS).

Investment Advisor Search Question #4: What services do you offer?

Different factors can determine the services offered by a financial advisor. These can include credentials, areas of expertise and licenses held. Some may offer only advice on financial topics but not actually sell financial products. Others specialize their advice to specific areas, such as tax advice or estate planning. Make sure the professional you hire has experience in the area on which you’re focusing.

Investment Advisor Search Question #5: How do you approach financial planning and investing?

Find out if your potential financial advisor takes a holistic approach to planning for your financial goals. Ask whether he or she provides advice on specific areas like real estate investing, or focuses on general investing. You’ll want to make certain that the advisor you hire adheres to a viewpoint on investing that is not overly aggressive for your level of risk tolerance, nor too cautious.

Investment Advisor Search Question #6: May I ask for three references?

Ideally, your potential candidate will provide you with two current clients as well as an accountant, estate attorney or other professional reference.

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* Authored by Gabby Revel of Gabby is a freelance writer and editor with over 10 years of experience writing about personal finance, beauty and fashion as well as other lifestyle topics. When she's not writing, Gabby likes traveling and exploring the world. And she loves cats.

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