Choosing an Investment Advisor

Find out what their fiduciary duty is (in client's best interest, or suitable for client) and what act they consider themselves regulated by and get it in writing. Find out how they get paid off your account. If they have a 3-letter designation, look it up to verify they really have it (if you can), see what they had to do to get it, and see if there's a complaint function and if there have been any complaints filed.

brochure on choosing an advisor here

more on choosing an advisor here, including a good section on "the dance" go to this page, and click on "choosing an investment advisor"

On Fiduciary Duty and Responibility

http://www.nasaa.org/Investor_Education/Financial_Education_Resources/  - the last link - Cutting through the Confusion talks about brokers/advisors/planners and who regulates them and fiduciary duty

When is a Financial Planner an Investment Fiduciary? hmmm, not very obvious. best to get them to commit.

Broker or Investment Advisor - here's another answer

Govt information sites

http://adviserinfo.sec.gov/IAPD/Content/IapdMain/iapd_SiteMap.aspx -  SEC site where you can look up a specific firm and their "Form ADV".

http://dfi.wa.gov/sd/investmentadviser.htm state site specific to investment advisors.

http://dfi.wa.gov/sd/iafederal.htm - this gets down to the specific dirt on what they need to know to be legal

http://www.nasd.com/RegulatorySystems/CRD/FilingGuidance/NASDW_005235 info on the NASD U form, used to track complaints against anyone who works for a broker-dealer. Page explains the form, but doesn't say where you can get it. Do you have to ask firms for it, I wonder?

http://www.adviserinfo.sec.gov/IAPD/Content/Search/iapd_OrgSearch.aspx This is the SEC page where you can look up firms by name and link to their ADV form 1. Firms are required to file Form 1 and you can ask them for Form 2

What are all those fancy letters? Look them up with NASD

 http://apps.nasd.com/datadirectory/nasd/prodesignations.aspx - the National Association of Securities Dealers (agency that licenses brokers) says it doesn't recognize or endorse any of this stuff. "be aware that Financial Analyst, Financial Adviser (Advisor), Financial Consultant, Financial Planner, Investment Consultant or Wealth Manager are generic terms or job titles, and may be used by investment professionals who may not hold any specific designation"

 

Check out any professional designation by contacting the issuing organization and determining whether they are currently authorized to use the designation and whether they've been disciplined. And make sure you understand the requirements for a professional designation. The criteria used by organizations that grant professional designations for investment professionals vary greatly. As noted earlier, some require formal certification procedures including examinations and continuing professional education credits. Others may merely signify that membership dues have been paid. 

Different types of advisors and rough differences between them.

Finding an Investment Advisor

Nontrivial if you're looking for a firm!  I (Shaula) used NAICS codes from here http://www.census.gov/epcd/naics02/def/NDEF523.HTM and then used my local library database links to a company lookup database (I used Gale via the Seattle Public Library, the "business and industry" link in their database section). I chose additional NAICS codes by looking up by name companies I already knew of, and then looked up companies by code. Mostly I used 523920, which turned up about 30 companies in WA but none in OR or ID, and an additional 200 some in CA. 

http://www.napfa.org National association of personal financial advosors

http://www.socialinvest.org/areas/sriguide/Directory/results.cfm - socially responsible investing advisors

Interviewing and Selecting the Investment Advisor

Interview checklist suggested by the Certified Financial Planner Board of Standards