- Don’t get caught up in titles. There are a lot of labels in the investment management industry—financial planners, wealth managers, portfolio managers, financial analysts and more. However, these titles are not consistent from organization to organization and do not provide you with a good background of the person’s experience, training or their approach to investing. So instead of focusing on the title on the nameplate, look at the person sitting behind it and find out exactly how they plan to help you make money and how well you think they understand and respect your goals.
- Conduct an interview. Remember, you’re the employer. Your investment manager needs to work for you, and it’s your responsibility to ensure that she or he does. Ask advisors about their backgrounds, investment philosophy, approach to risk, and how they are paid. Regardless of how an advisor gets paid, you want one who doesn’t skirt the issue and puts your interests first. And don’t be afraid to ask them about what mistakes they’ve made. You’re looking for the perfect person to represent your interests. You’re not looking for a perfect person. So someone who displays accountability for their actions and true regard for their clients’ welfare should merit high consideration.
- Research, research and research. Look closely at the history of any individual or firm you are considering working with. What is their reputation in the market? How long have they been practicing in their profession? How long have they operated their business or worked for their current investment management firm? Can they provide you sources for testimonials? Were they referred by a trusted friend or family member? What research do they use to make investment recommendations?