What Kind of Investment Advisor Do You Have?

The wise old man who first stated that there is more than one way to skin a cat knew what he was talking about.  I wonder if he grew up in Minnesota.

Financial Advisors come in all shapes and sizes.  It seems that there are more names for advising people on their investments than are really necessary.

Some advisors get paid by the hour.  Some advisors get paid only when their clients buy or sell something.  And some advisors get paid a fixed percentage of the assets that they manage for their clients.

Now is a great time to make sure that you are very aware of the kind of investment advisor that you have a relationship with. The U.S. stock markets are close to all-time highs. Highs don’t last very long in the investment advice business.  

The reality is that most men and women who claim to be investment advisors are really asset gathers.  These advisors constantly find new clients to build relationships with, and leave the actual management of their client’s assets to mutual funds or third party money managers.

Most investment advisors manage client relationships.  That sounds really important, doesn’t it?  It really isn’t.

Make sure that your current investment advisor in an actual investment manager.  Have him or her articulate their game plan for how your investments will be managed when interest rates rise and when stock markets fall.

After the next great stock market decline is too late to find out exactly what was done, or what was not done, to protect your investments.

Ric Lager
Lager & Company, Inc.