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Tips for Finding the Right Investment Advisor Part I

Markets got you down? Now may be a good time to team up with a good investment advisor.

By
Andrew Horowitz
Episode #079



Now, with that in mind, think about the commission-based planner. If you are working with an advisor whose income is based on the commissions from selling specific investments, how can you ever be certain that what you are buying is not a membership at the country club for that advisor?

At what point does adding a mutual fund to the portfolio or jumping on a stock become an action that is less in your interest and more in theirs?

By process of elimination, the best pick out of the group is the fee-based advisor. Typically, these advisors employ a nice blend of all the fee structures. Basically, you will be able to choose which pay structure is best suited for you and the advisor. This gives you the greatest flexibility and control.

Investment Advisors Help You Maintain Objectivity

In some capacity, it is important to seek counsel of some kind. Bear in mind that old saying: The man who represents himself as an attorney has a fool for a client. Nobody—not even an experienced advisor—has the answers to all of life’s (or Wall Street’s) questions. Furthermore, almost no one can completely separate their emotions from their own portfolio. This happens to be one of the most important lessons to be learned when dealing with your own money.

That is why advisors have a decided advantage. If they gain or lose $5,000 in a day for your portfolio, they are less likely to lose sleep over it. Of course this is not something to be taken lightly, even with a very large portfolio. Yet the simple fact of the gain or loss is less likely to dictate the advisors’ next move. This is what separates the successful investor from the rest of the pack.

In short, the greatest benefit of utilizing an investment advisor, in some capacity, is to gain objectivity. Portfolio decisions that are based on logic, rather than emotion, will be much more consistent with your long-term goals.

Cha-Ching, and that is ALMOST all for now...Next episode we will explore what you need to know to find an Investment advisor that is a good fit. I'm Andrew Horowitz, your guest host for this episode.  Check out my regular Quick and Dirty Tips podcasts under The Winning Investor.  Don't forget to come on over and subscribe to my other weekly podcast - The Disciplined Investor available on iTunes and if you want to become more disciplined with your investing, pick up a copy of my book or audio-book, The Disciplined Investor - Essential Strategies for Success.

In a future episode, Laura Adams, your new Money Girl, will cover some investment strategies for those of you who want to go it on your own, or want to keep an eye on your investment advisor.

As always, everyone’s situation is different, so be sure to consult a tax or financial advisor before making important financial decisions. This podcast is for educational purposes only and is not intended to be a substitute for seeking personalized, professional advice.

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