Evaluating & Selecting an Investment Advisor

The list of questions below should be considered as you interview potential investment advisors:

People

  • Is the advisor registered as a broker or RIA?
  • Does the advisor accept fiduciary responsibility?
  • What is the background and experience of the firm's investment team?
  • What is the background of the representative assigned to your account?
  • What is the firm's size and growth plan?
  • Are you comfortable with each?
  • How many accounts does your representative manage?
  • How often will they meet with you?

Philosophy

  • How are they compensated?
  • Is the firm product or service driven?
  • Does the firm have an articulated investment philosophy? If so, does your representative follow and believe in it?
  • Is this philosophy compatible with your objectives?
  • Does the firm adhere to this philosophy through all market cycles?
  • Does the representative meet with you often to discuss your specific goals and objectives with you?

Process

  • What is the firm's investment process? How do they select investments for your account?
  • Does the firm have disciplined and systematic controls that ensure the process supports the firm's philosophy?
  • What is their sell discipline?

Performance

  • Is performance reported to you or do you only receive an asset statement?
  • If reported, is performance gross or net of fees?
  • Does the firm conduct performance reviews for standard time periods e.g., monthly, quarterly, annually, since inception?
  • Has your representative targeted performance against an appropriate benchmark?
  • If your account has underperformed, is there a logical explanation and demonstration of outperformance in other periods?
  • Are reports timely, accurate and easily comprehensive?