Chapter 6: Comparing Advisors

Chapter 5: What Questions Do I Ask a Potential Advisor?

Do not be afraid to compare several advisors before hiring one! When interviewing potential advisors, you should compare each advisor’s:

  • Risk-adjusted returns
  • Education
  • Certification
  • Experience
  • Communication styles (The most common characteristic people want in an advisor is someone who communicates effectively. While performance certainly matters, it has been shown time and again the number one thing people want from their advisor is effective communication.)
  • Management styles (Advisors have all kinds of different investment and money-management styles. Be sure to find an advisor who matches your preferred style.)
  • Financial planning strategies.

Fees (Does the advisor’s company charge an annual fee to keep your money there? What are their custodial fees? Does the company outsource their investments to a 3rd party money manager? If so, what does the money manager charge? Are there transaction fees and what are they? It is best to be aware of these fees in advance in order to avoid any unwanted surprises.)