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How To Hire An Investment Adviser

By Jason Markum

Stock market investing is tricky and unless you have college training in finance and investment as well as massive investing experience, the chances are that you will make a serious mistake that can be devastating to your investments and therefore devastating to your future retirement.

Many people therefore look towards a stockbroker to get advice on how to pick the best stocks. What they don’t realize is that stockbrokers are not licensed or trained to give stock advice, ironically. In fact, it’s a horrible conflict of interest to get advice from a stockbroker because they have a vested interest in getting you to buy and sell as much stock as possible… because every time you do they make a commission and that’s usually the only way they make money!

So what other options are there if you can’t get advice from a stockbroker? Tips from friends? Hardly!

No, the main option left to you is to hire an independent investment adviser or counselor. The problem with this is that most people are a little put off by investment advisers. The ones that really know what they’re doing seem very rich and professional and you may be a little timid in approaching them. Don’t be!

Think of it as nothing more than hiring a new employee who works outside of your office. That’s really all they are! Use the same judgment and determination you would use to hire any employee when hiring an investment adviser

In the old days you had to be extremely rich in order to hire an investment adviser These days though, with the advent of computers and Internet technology it’s easier for advisers to take on clients with much lower net worth’s. Today advisers are willing to take on clients who have as little as $200,000 in assets to invest.

If you don’t have this much money at the moment, then I’m afraid there’s not many options for you. If you fall into this category, then your best bet is to purchase a simple broad stock market index fund like an S&P 500 fund that attempts to mirror the broad stock market as a whole. Using monthly automatic purchases, that take advantage of the law of averages, you can expect a return of between 6% and 8% per year on such index funds over time since this is the historic return of the stock market year after year.

When choosing an investment adviser there are three groups of counselors to avoid. The first are the one-man firms, in our interconnected global world you need a group of advisers; no one man or woman is going to have the expertise in the variety of areas you will need.

The next group to avoid are bank trust departments because they are often run by low level employees or by committee. Anybody with real talent in this area quickly leaves to get a much higher paying job elsewhere.

Finally stay away from brokerage firms such as the one your stockbroker works for. They usually give advice based on research that’s generated within their firm and also tend to push investments that are sold by their own company which is a conflict of interest you want to avoid.

So there you have several tips on finding the right investment adviser.

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