|
1 |
Experience
and qualifications. Look for the relevant
certifications (described
here) |
|
2 |
Relation
to other professionals. What makes the
advisor different from a financial planner or a
broker? |
|
3 |
Official
registration. Make sure the advisor is
registered with the SEC if he or she has more
than $50 million under management. Ask about
Part Ii of “Form-ADV,”
which you should review carefully. |
|
4 |
Investment
philosophy. You need to feel comfortable
with the investment approach of your advisor. |
|
5 |
Investment
process. Who does the advising? What
services are covered? How do you get started? |
|
6 |
Communication. What sort of mailings are
sent? Is contact with advisor possible? How
about meetings? |
|
7 |
Research.
Is it done in-house or subcontracted to others?
What research methods are used? |
|
8 |
Performance. How is performance calculated?
How does it compare with benchmark indices such
as the S&P500 or DJIA over three-year and
five-year periods? (One year is not enough.) Is
performance reporting compliant with AIMR/CFA Standards? |
|
9 |
Compliance.
Is the advisor compliant with AIMR/CFA and SEC
standards? Has any public disciplinary action
ever been taken? |
|
10 |
Independence. Does the advisor sell any
financial products for commission or enter into
incentive deals that could influence investment
recommendations? |
|
11 |
Ethics.
How does the advisor set and maintain policies
within the firm about confidentiality, security,
honesty, full disclosure, and fiduciary
responsibility? |
|
12 |
Payment.
Are services paid for on a commission basis or a
fee basis? What is the usual fee? Are the
financial arrangements put in writing? Is there
a contract governing the relationship? |
