Q:

What should you know before seeking out diversified investment advisors?

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Quick Answer

Diversified investment advisory services are part of the general financial services advisory industry, according to Wikipedia. Diversified investment advisors are typically selected using the same criteria as other financial advisors. According to James M. Dahle of the Physician's Money Digest, a good financial advisor should hold the right qualifications, offer value for money and have a similar investment philosophy as the client, among other attributes.

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Full Answer

Avoid procuring the services of poorly trained salesmen masquerading as financial advisors, warns Dahle. Good advisors should have qualifications such as CFA, Chartered Financial Analyst and CFP, Certified Financial Planner. Advisors who charge a fee should be preferred over those who are paid on commission, as the latter may be more interested in making a sale than in offering sound financial advice. Dahle recommends consulting the Securities and Exchange Commission website, the Better Business Bureau website and the Broker Check website operated by FINRA to check for outstanding complaints.

Avoid advisors with a large number of unresolved complaints and lawsuits. Before starting the search for an advisor, potential clients should decide whether they prefer local or out-of-state professionals. Those who are more comfortable with face-to-face communication should select a local advisor. The primary disadvantage with that approach is that the best advisors may live too far away to allow for face-to-face communication.

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