Choosing the Right Investment Adviser for You

We all need a little help sometimes. If you want help with your portfolio, here's how to choose the right investment adviser for you.

As you plan your financial future, it makes sense to consider the options for getting a little help. Financial professionals can be great for providing you with insight into what's next, and what you can do to maximize your potential.

If you want help with your portfolio, choosing the right investment adviser can go a long way toward providing you with a winning solution. If you are trying choose the right adviser, Joshua Ziering, an Index Investing Evangelist at, has some words of wisdom:

Right Investment Adviser

Watch Out for Loaded Funds

“Look for an adviser that's going to put you in ‘no load' funds,” Ziering says. “Not every adviser is bad, but there is a proven bias between ‘loaded funds' and advisers not looking out for your best interests.”

These days, there is no reason to buy a fund with a sales load. There are plenty of low cost mutual funds and ETFs that will allow you to maximize your portfolio, since you won't see the erosion of your wealth through fees.

Stay Away from Actively Managed Funds

“Be wary of advisers who recommend actively managed funds,” Ziering recommends. “While they may be able to beat the market for a few years, over the long term they don't hold up well. Some of the best investors in the world haven't been able to beat Warren Buffett's S&P 500 index fund pick.”

Before choosing an investment adviser, ask what he or she recommends. Managed funds can have high expenses that eat away at your returns. Make sure you understand the product before you let an investment adviser steer you toward it.

Find Out How the Adviser Gets Paid

One of the most important aspects of choosing the right investment adviser is learning how he or she is paid. Ziering suggests that you carefully consider advisers that charge based on a percentage of assets under management. “This means they're likely to cater to clients with a lot of money.” Without a high net worth, you might not get the same attention, even though these advisers can be great choices.

“Be wary of advisers who don't seem to be charing you anything,” he continues. “This is a big red flag that they're working on commission, and that inherently put their interests at odds with yours.”

Navigating this tricky path means that you need to find out exactly how your investment adviser is paid, and what you can expect in terms of service. “Working with a fee based or an hourly fee based adviser that uses modern portfolio theory to diversify and grow your money is the best option,” Ziering says.

Vet Your Investment Adviser Candidates

You'll want to make sure your investment adviser has the right credentials. Check with the state board, as well as with nationally recognized investment organizations to find out whether or not he or she has the right qualifications and licenses.

Ziering also suggests that you look at the advice you're getting. “It never hurts to run your portfolio through an unbiased source.” He, of course, recommends the free tool at

Interviews with potential candidates can help you find the right investment adviser with you, so make it a point to sit down with each one for 30 to 60 minutes to get a feel for your comfort level, and form an impression.

What are your suggestions for finding the right investment adviser?

2 thoughts on “Choosing the Right Investment Adviser for You”

  1. Roger @ The Chicago Financial Planner

    Nice post Miranda. I agree with much of Mr. Ziering said, but not all.

    First while I agree with the use of index funds and ETFs (and a large percentage of my client’s assets reside in these types of vehicles) there are still some excellent actively managed funds that I use as well. The nice thing is that it doesn’t have to be all or nothing, ideally a competent advisor will use his/her knowledge to pick the best investment vehicles for a client based upon their unique situation.

    As far as checking on an advisor FINRA’s broker check site is good as is BrightScope’s. For advisors who are CFPs the CFP Board of Standards site is another good choice.

    As a fee-only advisor I fully agree with investors having a full understanding of how the advisor is paid. Personally I am migrating to a flat fee for all services but still use % of assets when appropriate. Also clients need to understand that fee-based is not fee-only. Fee-based is basically a hybrid form of the commission model. Advisor compensation methods are key so that investors understand any inherent conflict of interest that might taint the advisor’s advice.

    1. Thanks for your thoughts, Roger! You’ve offered a lot of good information that investors can use as they look for an adviser. It really is important to understand how your adviser is compensated, and know the conflicts of interest.

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