How To Analyze Your Investment Advisors Performance

An investment advisor is helpful with one’s investment goals but the advisor should not be delegated blind authority with setting the goals of the investor. The investor should be clear in setting the course for their own investment and should not relinquish authority over investment decisions to an advisor simply because of the advisor’s title or experience. At the end of the day the investor is the one that is responsible for the success or failure of their investment goals. The purpose of this writing is not to instruct how to analyze your investments but how to analyze your investment advisor’s performance.

1. Does the your investment advisor follow your instructions regarding your established allocations of your invested dollars as well as your investment proceeds? You want an advisor that does what you desire them to do. Unless you decide to defer all decisions to an advisor, the authority that you grant an advisor should be clear on what issues they should consult with you prior to final decisions being made.

2. Does your investment advisor understand what to do when your investments sustain losses? there should be a plan in place on what to do when losses are incurred. This will avoid panic investing.

3. Does your investment advisor keep you apprised of existing and potential economic conditions in the market which will potentially impact your investments? Knowledge and information is the most important commodity in investment. Many investors will benefit from investment advisors who are the fore knowledge to study trends for future economic events.

4. Are you able to track your investment advisor’s performance over a period of time. This will enable you to determine if your advisor is consistent in their job or whether they are simply guessing with their investment goals.

5. Do you have access to other clients which use your same investment advisor? Shared information, even through social settings will allow an investor to compare notes on how their advisor is performing.

6. Is your investment advisor capable of advising you on investments which have global market implications? Many, if not most investments, will have a global influence and global trends such as wars, natural events and government policies will play a role in the success and failure of your investment.

7. Is your investment advisor backed up by a research team that can perform detailed due diligence regarding potential investment vehicles? A good advisor has a good research team to back them up and provides good data for the investor to make better investment decisions.

8. Does your investment advisor have experience in understanding how policy issues domestically and internationally will impact your investment blueprint?

9. Does your investment advisor show to you that they are taking steps to grow and learn new trends, new technologies as well as new market place economics which will benefit your investment goals?

10. Does your investment advisor allow you to provide feedback regarding their performance over the course of an investment period?

1 Comment

  1. aryan June 4, 2018 at 9:39 am - 

    I want to become a state-certified investment advisor & start my own financial planning practise in CA. I understand I have to pass the series 65 exam to qualify. What’s the next step to this?

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