Registered Investment Advisor
Registered Investment Advisor: How to Select One
All investment advisers who are manageding over $25 million are required to register themselves with the securities and exchange commission (SEC). Such an adviser is known as a registered investment advisor (RIA). This simply means that a registered advisor is now legally recognized, but it does not mean that the SEC is recommending them.
The question now is how do you go about choosing a registered investment advisor and where do you find one? Another question of course is on what criteria are you able to know whether the registered investment adviser you have in mind is actually up to the job and is effectively managing investments?
Naturally, the bigger financial institutions will be employing a lot of the financial investment advisers who have good track records, because they are able to pay them a good wage. This will mean that you will be paying a higher commission because of their track record. Some of the financial institutions that are worth checking out are ones such as Vanguard investments, Fidelity and the Bank of America. Because of their rate of pay plus their prestige, these companies attract some of the most skilled investment advisers around.
If you want to go on a cheaper rate then check out recent college graduates that have had practice of managing school endowments because such graduates are just starting out and they want to gain some portfolios under their belt. For this reason they will be more willing to work much harder for you the client to get good results in order to create a name to themselves.
One of the most obvious things, that is worth checking before taking on any registered investment adviser is to look at their past history. Have they been successful at the company in which they are currently working? What has been their long-term success rate? Naturally if they have been plagued with disasters, then it would be very wise to avoid avoid this one.
A registered investment advisor may be very keen to display their certificates to prove that they are qualified for the job, however, holding the certification even at a high level does not mean that they have actually been successful in the field. Therefore you what you want to do is ask to see their portfolio. That will immediately tell you how effective they actually are.
Another thing to check out with a registered investment adviser is, what kind of investment activity do they involve in? For example, do they only choose investments in the highly volatile IPO's? Are they prone to dealing in high risk portfolios? If this is the case, then you can be assured that you may gain some amazing success but you may also suffer some incredible losses.
Lastly, but by no means least, you want to find someone who has a genuine interest at helping you. Choose an investment adviser who is taking you on as the client and is determined to get you the best return in the safest way. |
