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Items to consider when choosing an investment advisor: Does your advisor hold the Chartered Financial Analyst designation? Why Choose a CFA® Charter holder? Does your advisor adhere to the strict moral, ethical and financial reporting guidelines set out by the CFA Institute? CFA Institute Homepage ; Code of Ethics Does your advisor use a common sense approach that is easy to understand? Our Investment Discipline Does your advisor have a solid, time-tested investment discipline that he/she has applied consistently through bull and bear markets? Does your advisor invest in his/her own recommendations? Is the advisor company run by investors who are most concerned with performance or by businessmen concerned mainly with gathering assets? Are your funds managed by a single decision maker or a dysfunctional committee? Does the advisor's investment style fit your personality? For example, an aggressive Type A personality would probably be unhappy hiring a slow, methodical value investor as an advisor. Does the advisor provide good transparency regarding investment methods and business practices? Do you have unrestricted access to your funds? Or are you required to 'lock up' your funds for a period of time? Do you understand how career risk, business risk and career success could affect your performance? 3/31/04 Newsletter Is your advisor registered, in good standing, with the appropriate regulatory body? For Registered Investment Advisors, you should read the firm's Form ADV for a broad range of important information. View our regulatory filing Form ADV. Is your advisor willing to provide a list of references? Be skeptical. Be wary of anyone making extraordinary claims, especially regarding extremely high returns. Is such performance CFA Institute-compliant? Ask about the risk involved. Remember, if it seems to good to be true, it probably is. Ask plenty of questions such as: What experience do you have? What degrees do you hold? What other credentials do you have? How are you compensated? Commissions? Fees? Hourly rate? Are there any conflicts of interest I should know about? For additional thoughts on choosing a manager see our 6/30/04 and 3/31/04 newsletters. Additional information to consider when choosing an investment advisor can be found on the SEC website through this link. Investment Advisors: What you need to know before choosing one. Check out your investment advisor or broker's background -Investment Advisor Registration Directory- by state
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