LOOK OUT FOR YOUR BEST INTERESTS.
Registered Investment Advisers (RIAs) must abide by a fiduciary duty, making decisions about your investments based on what's in your best interests, not his. An adviser makes sure your investments remain in your best interests.
ESTABLISH REGULAR COMMUNICATION.
A good adviser doesn't wait for you to call; he will reach out at least two times annually. And, when you leave a message, he should return your call within one business day.
TELL YOU HOW HE'S COMPENSATED.
Many advisers are paid by investment companies for recommending certain products. That compensation can take on many forms, but if an adviser is receiving compensation to sell one company's products over another, how can you be sure those investments are best for you?
EXPLAIN HIS INVESTMENT STRATEGY.
An adviser should be able to explain an investment strategy in a way you understand. And if you still don't understand, it's a good idea to find another adviser to work with.
GIVE A WRITTEN INVESTMENT PLAN.
The reason you print out driving directions from Map quest or Google Maps is because you need to know exactly how to get to your destination. No one likes to get lost. Likewise, your adviser should provide an investment road map in a written document, with a list of investments and asset allocations. If your plan changes, you should receive an updated version
HAVE SOME TYPE OF EXPERTISE.
Some advisers might specialize in stocks, bonds, or estate planning. Others might have a license to sell insurance policies.
MANY PEOPLE HIRE A FEE-BASED ADVISER to help with their investments. Before you do, it's important to ask the right questions. It's also important that the adviser asks you the right questions.
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