If the time has come to find a new advisor to help you with your investments your choice should take into account how much experience you already have. A second consideration is the amount of funds that you have to invest and how actively you intend to be in the investment markets, this is important as it is a direct selection criterion for the advisor that you eventually decide to use.
1. What do you want your investments to do?
This should be the first question any potential investment advisor should ask you. It is a good question and you should have thought this through in advance. Most people are mainly interested in enjoying spending their money than keeping an eagle eye on the bottom line. Are you looking to maximize the return of the funds you have set aside for your pension or do you want your funds to give you an immediate income from the interest that they earn.
2. Risk assessment
Once again this is an important consideration to take into account. Basically the higher the return on your investment in interest the potentially more risky that investment probably is. Good examples are those investors who got burnt investing in funds in Cyprus and Iceland in recent years. You may be interested in investing in other markets than stocks and shares or bonds. Some advisors can help you evaluate alternative such as tree farming in Central America that has returned interesting dividends.
3. The financial advisors background
This is an important factor and it is important to understand if the advisor represents particular financial companies or is truly independent. Take time to understand the financial advisor’s style and approach and be sure you are comfortable with that; however professional a candidate advisor may be if you don’t like the individual your relationship almost certainly won’t work.
4. You get what you pay for
As with anything else you are shopping for you get what you pay for is a good rule to follow for investment advisors. But to complicate matters investment advisors get paid in different ways, the most common of these are:
Advisors can receive a base salary as well as the fees they charge to the client in the form of a commission. If the advisor only receives commission their eagerness to sell you anything, just to get the sale might make you a bit suspect about their impartiality.