How to Find an Investment Portfolio Advisor

Investors can track an investment adviser's historic performance in a prospectus.

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Choosing the right investment portfolio adviser can be the difference between reaching financial goals and falling short. Investors should hire money management professionals they trust but also who can deliver desired results. To find this investment professional, investors should be prepared to perform their share of research. Also, investors must be willing and able to communicate their financial goals in order to line up with the most appropriate portfolio advisers.

Size

Many large financial institutions provide portfolio management, but smaller, independent wealth management firms offer similar services. An investor should first determine the size of a firm he prefers to deal with. By placing assets with a large financial institution, an investor has access to a wide range of services and product offerings that might not be available at smaller firms. Nonetheless, an investor is likely to receive more one-on-one attention from a portfolio adviser at a smaller investment management firm, according to "The Wall Street Journal."

Investment Strategies

Mutual funds, which are a common type of investment portfolio run by professional managers, disclose their investment strategies and holdings in a document known as a prospectus. By requesting a copy of a firm's prospectus, an investor can learn about the types of risks associated with various strategies. An investor should also note the specific financial securities that an investment fund contains. This can help an investor to avoid certain pitfalls, such as investing too heavily in one specific investment category.

Fees

An investor should also evaluate the fee structure of a fund relative to the types of profits that the portfolio historically delivers. Fee structures are normally outlined in a fund's prospectus. The two general types are active and passively managed funds. Active managers, which change positions in a fund frequently and in response to market conditions, charge higher fees but attempt to produce above-average profits. Passive fund manager fees are generally cheaper, but these funds — while less risky than active funds — seek to produce average profits.

Caution

Word-of-mouth is one way to locate an investment portfolio adviser but investors should be leery of this approach. It's possible to learn about an investment portfolio from someone while the fund is experiencing unusual growth. Without learning more about a fund other than the types of profits it is experiencing for a time, an investor might fall into a trap of investing in a trendy fund. As market conditions evolve or money management professionals change, so too could that fund's performance. Even when receiving advice about a portfolio manager, an investor should research that fund's particular strategy and track record, according to The Wall Street Journal.

Photo Credits

  • stocks and shares image by Andrew Brown from Fotolia.com

About the Author

Geri Terzo is a business writer with more than 15 years of experience on Wall Street. Throughout her career, she has contributed to the two major cable business networks in segment production and chief-booking capacities and has reported for several major trade publications including "IDD Magazine," "Infrastructure Investor" and MandateWire of the "Financial Times." She works as a journalist who has contributed to The Motley Fool and InvestorPlace. Terzo is a graduate of Campbell University, where she earned a Bachelor of Arts in mass communication.

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