HOW TO CHOOSE AN INVESTMENT ADVISER REPRESENTATIVE

“Financial professionals” come in all shapes and sizes, including securities salesmen, investment advisers, insurance agents, accountants and others.  

Choosing an investment adviser involves many considerations, but of course you should check out the adviser as thoroughly as you check out a broker/securities salesperson.  You may now review the background of an investment adviser on line at www.advisorinfo.sec.gov.  If you do not have access to the Internet, you can call the Arizona Corporation Commission’s Securities Division (see below) to get this information, or you may call the U.S. Securities and Exchange Commission at 202-942-8090.

In choosing an investment adviser, you may want to ask friends, relatives and co-workers who may have an adviser that has given them good service. You should look for an adviser who is knowledgeable in estate and retirement planning, taxes, insurance, investments and family budgeting.

Some advisers may have such “professional designations” as “Certified Financial Planner” (CFP), “Chartered Financial Analyst” (CFA), “Chartered Financial Consultant” (ChFC), “Chartered Investment Counselor” (CIC), or “Personal Financial Specialist” (PFS).  If the adviser you have chosen uses a professional designation, verify that the adviser has actually obtained the designation by contacting the professional organization.

Another consideration in choosing advisers is how they are compensated.  Some are paid hourly; others receive a flat fee for specific services or a percentage of your annual income or assets.  Still others receive commissions from the securities they sell to you.  You also should ask the adviser about his or her investment philosophy and whether the adviser will be recommending securities offered by all companies or to just a few.  Additionally, you should determine how often the adviser will review your account.

The Securities Division has a variety of investor education materials, one of which is entitled “Cutting Through the Confusion.”   To order a hard copy, click on the Investor Info Center or contact the Securities Division’s Investor Education Coordinator at 602-542-0428, toll-free, 1-866-VERIFY-9.   The key is to…

Verify Before You Buy!