Choosing an investment advisor or manager

• An investment advisor or manager, unlike a typical stockbroker, is in the business of managing other people’s money.   If they manage more than $25 million, investment advisors are required to register with the SEC.
  
  
• We do recommend that you check out the registration file FORM ADV, Part 1 for any investment advisory firm you are considering from the SEC website.  As with stockbrokers and the NASD website, the information about any particular investment advisor may not be complete.
  
  
• Ask any prospective investment advisor to provide you with Part 2 of their FORM ADV, which is not available from the SEC on the web.  The firm may give you the actual form that they filed with the SEC or a brochure that contains the same information.
  
  
• At a minimum, the advisory firm should have a list of experienced, well credentialed people who are responsible for making decisions with funds in vested by clients of the firm.  That means people schooled in financial analysis.
  
  
• The most important reason to sign on with any investment advisor is performance.  Does the firm make money for its clients?  Has it been able to do so in different market conditions?
  
  
• There are accepted ways for an investment advisor to report performance, and most advisors will be happy to tell you how well they have done for customers similar to you.   Checking an advisors’ references is always appropriate.
  
• Investment advisory fees are usually negotiable. Always ask for a discount.  Always investigate advisors thoroughly and compare them with each other.