MUTUAL FUND ARTICLES BY ULLI G. NIEMANN
Articles for Free publication in your Newsletter or on your
How to find an Investment Advisor
By Ulli G. Niemann
Do you think you need an Investment Advisor? Hold on before you answer because
this is sort of a trick question. Also, I am definitely biased because I am
an Investment Advisor. Nonetheless, I think I can assist you in looking at
this issue in a way that will serve you.
Working with a fair number of investors over the last nearly
20 years, I have observed that while most are intelligent
people, and many are fairly knowledgeable about the market,
they are, as a group, not terribly successful with their
Why should they be? More likely than not they have made
their living doing something other than investing, so why
would they think they can do what a professional does better
than a professional? (After all, they go to professionals
for health care or for car repairs when needed!)
Most investors-even some professionals-tend to be "off" in
their timing: they buy things when they are hot, not when
they are cold. But for the greatest benefit, it should be
the opposite. The media doesn't help much when it comes to
this buying approach, and let's face it; greed and fear play
a large part in most peoples' investment decisions.
I truly believe the majority of people would be better of
(that is, they would end up with more money at the end of
the day) if they used professional money managers to advise
them on their investing. Specifically I am referring to Registered
Investment Advisors with proven track records of performance
in investing in stocks, bonds, mutual funds
Let me burst one myth right off the bat: You don't have
to be a millionaire to engage the services of a topnotch
advisor. Some people think you need to start an account with
$50,000 or more to get a really good advisor. Well, you may
have more choices if you're at that level, however you can
find very successful Investment Advisors who will accept
opening accounts for as little as $5000.
There are literally thousands of Registered Investment Advisors
in the US. Just what do they do-what service do they provide
you? They do the legwork; the research and analysis. Maybe
more importantly, they keep their primary focus on the markets,
and specifically on their specialty area like individual
stocks, mutual funds, or bonds.
Because they spend the bulk of their time and energy researching,
considering, and analyzing, they naturally have a greater
sense of the market and its movements than those of us who
don't put this kind of attention into it. So, with the right
advisor, you can keep your focus on what you want-like your
business or your retirement or whatever-and still get the
information you want and need to invest wisely.
How Do You Find The Advisor for You?
Since there are good Investment Advisors and bad ones, how do you find the
former and avoid the latter? Good question, and there are some keys. Most large
brokerage firms list the Investment Advisors they work with and maintain information
about their past performance. This is not a foolproof resource, though, since
they tend to recommend the Investment Advisors who invest in their products
or clear their business with the firm. So if you pursue this avenue, you need
to watch for conflict of interest issues.
You can always subscribe to one of the numerous database
services that include information, and sometimes rankings,
on Investment Advisors. These services tend to be fairly
pricey, though, so they may not be your best choice. Another
option is to find articles (yes, like this one) or free newsletters
written by Investment Advisors. If you find one or several
that make sense to you, check out the IA and see if there's
chemistry between you.
When checking out advisors, here are some things to keep
1. Verify their record -- look over their past performance;
2. Consider their system. Will it work in different market
3. As best you can, check out their operation and
4. See if they've had regulatory problems.
5. Equally important as doing your due diligence is making
sure there is good communication between you and your advisor
and that you trust this person with your money choices.
Another quick free way to scan through a select database
and find a wide variety of candidates is with www.wiseradvisor.com.
registered there myself as an advisor and know that the company
a background check regarding registrations and regulatory
An important question to ask is the how the advisor gets
compensated. You want to stay away from commission junkies
or salesmen disguised as advisors. I believe that you will
get the best unbiased advice from someone who is paid a management
fee based on the value of the assets that you entrust them
To take it one step further, ask if the advisor invests
his own money in the same methodology that he recommends
for his clients. If he doesn't, ask why. If you don't like
the answer, close your check book and run as fast as you
Choosing an Investment Advisor can yield long-term high
profit benefits. I encourage you to consider it if you haven't
before. However, as with any relationship, make sure there's
a fit before you jump into it.
© Ulli G. Niemann