Posted on: 20 May, 2003
Author: Ulli G. Niemann
Do you think you need an Investment Advisor? Hold on before youanswer because this is sort of a trick question. Also, I amdefinitely biased because I am an Investment Advisor.Nonetheless, I think I ca... Do you think you need an Investment Advisor? Hold on before youanswer because this is sort of a trick question. Also, I amdefinitely biased because I am an Investment Advisor.Nonetheless, I think I can assist you in looking at this issuein a way that will serve you. Working with a fair number of investors over the last nearly 20years, I have observed that while most are intelligent people,and many are fairly knowledgeable about the market, they are, asa group, not terribly successful with their investing. Why should they be? More likely than not they have made theirliving doing something other than investing, so why would theythink they can do what a professional does better than aprofessional? (After all, they go to professionals for healthcare or for car repairs when needed!) Most investors-even some professionals-tend to be "off" in theirtiming: they buy things when they are hot, not when they arecold. But for the greatest benefit, it should be the opposite.The media doesn't help much when it comes to this buyingapproach, and let's face it; greed and fear play a large part inmost peoples' investment decisions. I truly believe the majority of people would be better of (thatis, they would end up with more money at the end of the day) ifthey used professional money managers to advise them on theirinvesting. Specifically I am referring to Registered InvestmentAdvisors with proven track records of performance in investingin stocks, bonds, mutual funds Let me burst one myth right off the bat: You don't have to be amillionaire to engage the services of a topnotch advisor. Somepeople think you need to start an account with $50,000 or moreto get a really good advisor. Well, you may have more choices ifyou're at that level, however you can find very successfulInvestment Advisors who will accept opening accounts for aslittle as $5000. There are literally thousands of Registered Investment Advisorsin the US. Just what do they do-what service do they provideyou? They do the legwork; the research and analysis. Maybe moreimportantly, they keep their primary focus on the markets, andspecifically on their specialty area like individual stocks,mutual funds, or bonds. Because they spend the bulk of their time and energyresearching, considering, and analyzing, they naturally have agreater sense of the market and its movements than those of uswho don't put this kind of attention into it. So, with the rightadvisor, you can keep your focus on what you want-like yourbusiness or your retirement or whatever-and still get theinformation 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 doyou find the former and avoid the latter? Good question, andthere are some keys. Most large brokerage firms list theInvestment Advisors they work with and maintain informationabout their past performance. This is not a foolproof resource,though, since they tend to recommend the Investment Advisors whoinvest in their products or clear their business with the firm.So if you pursue this avenue, you need to watch for conflict ofinterest issues. You can always subscribe to one of the numerous databaseservices that include information, and sometimes rankings, onInvestment Advisors. These services tend to be fairly pricey,though, so they may not be your best choice. Another option isto find articles (yes, like this one) or free newsletterswritten by Investment Advisors. If you find one or several thatmake sense to you, check out the IA and see if there's chemistrybetween you. When checking out advisors, here are some things to keep inmind: 1. Verify their record -- look over their past performance; 2.Consider their system. Will it work in different marketenvironments?; 3. As best you can, check out their operationand 4. See if they've had regulatory problems. 5. Equallyimportant as doing your due diligence is making sure there isgood communication between you and your advisor and that youtrust this person with your money choices. Another quick free way to scan through a select database andfind a wide variety of candidates is with www.investortree.com. I'm registered there myself as anadvisor and know that the company did a background checkregarding registrations and regulatory issues. An important question to ask is the how the advisor getscompensated. You want to stay away from commission junkies orsalesmen disguised as advisors. I believe that you will get thebest unbiased advice from someone who is paid a management feebased on the value of the assets that you entrust them with. To take it one step further, ask if the advisor invests his ownmoney in the same methodology that he recommends for hisclients. If he doesn't, ask why. If you don't like the answer,close your check book and run as fast as you can. Choosing an Investment Advisor can yield long-term high profitbenefits. I encourage you to consider it if you haven't before.However, as with any relationship, make sure there's a fitbefore you jump into it. Article Tags: Investment Advisor, Investment Advisors Source: Free Articles from ArticlesFactory.com ABOUT THE AUTHOR Ulli Niemann is an investment advisor and has been writing aboutobjective, methodical approaches to investing for over 10 years.He eluded the bear market of 2000 and has helped hundreds ofpeople make better investment decisions. To find out more abouthis approach and his FREE Newsletter, please visit:. Article Tags: Investment Advisor, Investment Advisors Source: Free Articles from ArticlesFactory.com