3. PHILOSOPHY:

Asking questions about an advisor's investment philosophy is one of the most important steps in choosing an advisor that can help you achieve your personal investment goals.

Is the advisor conservative or aggressive with regard to his/her investment philosophy? Ask to review records to verify his/her answers. If an advisor works for an investment firm, request information on the firm's philosophy as well.

Investors often consider social or political issues in the selection of investment products. Will the advisor, and if applicable, his/her firm, be able to respond to your views?

The size of an investment organization is not necessarily an indication of an advisor's ability to help you achieve your personal investment goals. Determine the advisor's seniority in the firm. Understand how corporate or management changes can influence his/her investment philosophy.

What is the advisor's (or the firm's) views with regard to communicating to clients? Ask to see copies of account reporting formats and procedures.

How often will you receive reports on your account? Will you be able to understand reports? Does the advisor - or the advisor's firm - support the recent initiatives concerning plain language?

4. PERFORMANCE:

Analyzing performance results is another important aspect of selecting an investment advisor.

As a first step, discuss whether the advisor complies various performance standards. Certain standards, which are based on ethics codes, were created to level the playing field for investors and the investment profession.

Analyze an advisor's performance record over time. Be aware that there are many considerations in determining overall performance, including the investment instruments utilized and account and market activity.

Compare advisor performance with leading benchmarks, such as the various indices.

How is the advisor paid for his/her performance?

Determine whether an advisor's performance data includes the impact of fees charged to clients, and whether he/she receives compensation from anyone other than clients.

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