Choosing the right investment advisor is a critical decision that has significant long-term implications both personally and financially. Candidly, many investors fail to ask important questions about advisors’ means of compensation, expertise and capabilities, roles and responsibilities and other factors. Following is a summary of important factors to consider when interviewing prospective advisors.

Objectivity – Hire a Fee-Only Advisor

In our humble opinion, the only way to ensure that your advisor truly shares your best interests is to hire a fee-only advisor that does not receive any product-based compensation of any kind. As discussed in our piece entitled “Advisors’ Duties – BUYER BEWARE,” conflicts of interest abound and advisors’ duties are rarely what they seem to be. Many “advisors” do not have a fiduciary duty to hold Clients’ interests above their own, and product biases often cloud objectivity. When you hire a fee-only advisor, you take comfort in the fact that the advisor has no product biases.


Similar to interviewing a candidate for a job, it is important to determine that an advisor has the appropriate educational background and expertise. We suggest that any prospective advisor should likely have an educational background in accounting or finance. Beyond education, it is important to inquire as to the number of years of actual experience the prospective advisor has in providing investment advice and the number of accounts under direct supervision by the advisor. Advisors with numerous and/or smaller accounts might not be able to devote adequate attention on an ongoing basis. Further, while it is more confusing than ever to make sense of the alphabet-soup of licenses and so-called credentials that advisors carry, we respectfully suggest that the most reputable credentials to look for in an advisor are the Certified Financial Planner (CFP®) practitioner, Certified Public Accountant (CPA®), and Chartered Financial Analyst (CFA®) designation. Individuals carrying any of these designations have completed rigorous testing and continuing education requirements in various disciplines. Also, it is advisable to inquire whether any prospective advisor has a disciplinary history relating to investments.

Transparency of Reporting and Monitoring

When utilizing an investment advisor it is important to evaluate the performance of your investments. To do so, investors generally need two things. First, they need a regular calculation of returns calculated NET of all investment expenses. Many advisors have a nasty habit of presenting investment returns gross of expenses which is extremely misleading. Unless you know how your investments are performing NET of all expenses, you really don’t know how you are doing. Second, it is helpful to compare net investment returns to appropriate benchmark indices to determine how well your portfolio is performing relative to market returns. While it may not be realistic to expect to materially outperform the broad markets on a long-term basis, severe underperformance is likely cause for concern. When evaluating prospective investment advisors, it is important to inquire whether you will receive regular reporting of NET investment returns with appropriate benchmarks for comparison. Requesting sample performance reports can be helpful in evaluating the kind of reporting you will receive. Beyond regular investment performance calculations, it is also important to inquire how often your portfolio allocation will be reviewed and by whom. At Kyle Financial Services, Inc. we review each Client’s asset allocation weekly and provide quarterly reports delineating NET investment returns compared to various relevant indices.

Planning and Modeling Capabilities

Given the interrelationship between investments and taxes, it is advisable to seek an investment advisor that has an in-depth knowledge of taxes. Also, as discussed in detail in our piece entitled “Retirement Calculators – CAUTION,” investors need to be wary of advisors that utilize “off-the shelf” modeling tools for long-term cash flow and asset allocation illustration. As discussed in that piece, many popular tools have severe flaws that make the results of such modeling unreliable and potentially dangerous. At Kyle Financial Services, Inc. we have developed a proprietary tool for cash flow modeling and asset allocation illustration that endeavors to provide a more realistic depiction of how portfolios might behave under thousands of different market cycles.

Please see the attached questionnaire which is a helpful resource for evaluating prospective investment advisors.



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Milwaukee, WI 53224
Phone: (414) 359-2020
Fax: (414) 359-2120
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