Tips for Researching Investment Advisors

It’s a great idea to invest your money rather than stash it in a savings account, but it’s an even better idea to invest your money with the help of an experienced advisor who can steer you in the right direction. No matter if you’re new to investing or have been doing so for several years, the right advisor can help you maximize your time and your money. Here are some tips to help you narrow down your options.

Education and Experience

Just as you’d likely hesitate in putting your health in the care of someone who didn’t finish medical school and has hands that constantly shake, you’d be just as apprehensive about trusting your hard-earned money to an investment advisor who doesn’t have a firm understanding of the market. Check out the professional credentials and background of any advisor you’re thinking of working with. You can do this by visiting the advisor’s site, and you can also look for independent reviews that touch on the individual’s depth of experience and education.

Proper Licensing

Once you’re satisfied that a potential advisor has the experience and education you require, do a bit more digging to ensure she or he is currently licensed. Investment advisors have to successfully pass the Series 65 exam to become Registered Investment Advisors.

On a related note, while advisors don’t have to earn certifications to perform their jobs, doing so can make it easier for them to bring in business. Voluntary certifications can also put you at ease about the person handling your money. Examples of certifications commonly held by RIAs include:

  • Personal Financial Specialist
  • Certified Financial Planner
  • Chartered Financial Consultant
  • Chartered Financial Analyst


Before deciding on an investment advisor, gain clarity on how she or he is compensated. This is recommended because the answer to that question could raise a conflict of interest. For instance, earning commission often leads to the potential for a conflict of interest, mainly because such advisors could have an issue with putting your interests before theirs.

More typical pricing models are assets under management fee, hourly fee, and flat fee. There could also be additional fees you have to pay in addition to the base fee, so be sure to ask about that as well to avoid unfortunate financial surprises.

Opt for a Fiduciary

Fiduciary advisors have an obligation to look out for your best interests. With non-fiduciary advisors, while they may offer suitable information regarding an investment, that doesn’t necessarily mean that that investment is in your best interest at that moment.

Run a Criminal Background Check

If you’ve never run a background check before, now is the perfect time to change that. As you narrow down your choices for investment advisors, give strong consideration to running background checks. While you can always ask if the advisor has ever been convicted of a crime, there’s no guarantee she or he will tell the truth. Background checks can also reveal whether an individual advisor has ever been put under investigation by an investment group or regulatory body. Asking for current client references can also give you a great deal of peace of mind.

Degree of Interaction

If you’ve never worked with an advisor before, you may not be aware of just how often you’d like to meet up with this professional. There are advisors who have an initial introduction meeting and only check in with clients once a year, while others reach out to clients multiple times throughout the year. It’s best to let potential advisors know your investment goals. That way, you can work together to create a meeting schedule that works for you both. Finally, set the groundwork for what you’ll discuss during each individual interaction, so you both know what to expect.

Your investments are just as impacted by the market as they are your advisor. You have little control over one, but you’re most certainly in the driver’s seat regarding the other.