Selecting an investment adviser.Helping a client select an investment adviser is something CPA/financial planners are frequently called on to do. But what questions should the CPA (Computer Press Association, Landing, NJ) An earlier membership organization founded in 1983 that promoted excellence in computer journalism. Its annual awards honored outstanding examples in print, broadcast and electronic media. The CPA disbanded in 2000. and the client ask each prospective adviser to establish his or her credentials CREDENTIALS, international law. The instruments which authorize and establish a public minister in his character with the state or prince to whom they are addressed. If the state or prince receive the minister, he can be received only in the quality attributed to him in his credentials. ? Here is a checklist of information that will help in the process of choosing an investment counselor whose investment style and performance best match the client's goals and objectives. * What securities registrations, academic degrees, sales licenses and professional designations does the adviser have? * How many years of experience has the adviser had managing money for similar clients? * Other than the adviser, which staff members will provide services to the client? What will their responsibilities be? * Will the prospective client be permitted to speak to some of the adviser's current clients to ask about their experiences? * How will the adviser be paid? Does he or she charge fees, earn commissions or get compensated in some other manner? * Will the client's account be subject to any other fees or expenses, such as loads or liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy fees? * Does the adviser have any conflicts of interest? Do certain investment products pay a large commission or make the adviser eligible for prizes, trips or bonuses? Does the adviser accept "soft dollar" compensation? (In the typical soft dollar arrangement, an adviser routes client brokerage orders to particular brokers and, in exchange, gets free research services.) * How will the adviser learn about the client's financial situation to ensure that investment recommendations are in line with the client's needs and objectives? * What is the adviser's investment philosophy? How does he or she select investments, time markets and diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. investment portfolios? * What historical rate of return has the adviser earned for clients over the last 1, 3, 5 and 10 years? What risk levels were used to achieve those returns? Were performance figures verified by an independent auditor Independent Auditor An external auditor with a certified public accounting designation that qualifies him or her to provide an auditor's report. Notes: These auditors aren't affiliated with the company being audited. ? * How much risk will the client be exposed to? What will the adviser do to reduce the level of risk? * Will the investment adviser work closely with the client's other advisers to develop the portfolio? Will he or she provide tax information to the CPA and work with the accountant on yearned tax planning Tax planning Devising strategies throughout the year in order to minimize tax liability, for example, by choosing a tax filing status that is most beneficial to the taxpayer. ? * Will the adviser prepare a written investment policy statement including the client's goals, current asset allocation Asset Allocation The process of dividing a portfolio among major asset categories such as bonds, stocks or cash. The purpose of asset allocation is to reduce risk by diversifying the portfolio. , estimated portfolio rate of return and risk exposure? * What criteria does the adviser use to judge proposed investments? Is this policy in writing? * Does the adviser develop customized portfolios for each investor? * Will the adviser ask the client to grant discretionary trading authority? * What kind of investment performance reports will the client receive? How frequently? Does the investment adviser's performance reporting comply with Association of Investment Management Research standards? Will the client receive reports that compare actual performance with his or her goals? With established benchmarks? * Who will be the custodian bailee (custodian) n. a person with whom some article is left, usually pursuant to a contract (called a "contract of bailment"), who is responsible for the safe return of the article to the owner when the contract is fulfilled. of investment funds Noun 1. investment funds - money that is invested with an expectation of profit investment assets - anything of material value or usefulness that is owned by a person or company ? Will the client's money be commingled with funds belonging to others? * How will disputed between the client and the adviser be resolved? |
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