How to Select an Investment Advisor 


There are 2,613,000 financial salespeople in the United States -- in fact, it's the fifth largest vocation (after truck drivers but before janitors -- no kidding). Strange to tell, not every one of them is outstanding. 

This simple quiz will help you decide who to have manage your investment portfolio -- often before he gets to your front door.

Question #1: Method of Transportation

[  ] Advisor 'A' pulls up to your curb in a top-of-the-line, late-model Jaguar, BMW, or Mercedes, indicating his great wealth.

[  ] Advisor 'B' chugs up in a ten-year-old Volvo. It could use a paint job. Or, he arrives by bus.

Question #2: Dress

[  ] Advisor 'A' wears a suit from a bespoke tailor on Jermyn Street. The solid gold Rolex on his wrist weighs eight pounds and has more gauges than the space shuttle. He carries a briefcase made of the skin of an endangered species. 

[  ] Advisor 'B's suit is…did I say suit? No, he wears a rumpled blue blazer that looks like he slept in it. His khaki pants are frayed at the cuffs. His wife bought his shirt over the phone from a catalog. No tie -- he doesn't own one. His battered briefcase still bears the tooth marks where his dog gnawed it. 

Question # 3: Demeanor 

[  ] Coming up the walk, Advisor 'A' has the jaunty step and cocksure attitude of an America's Cup captain. His haircut and tan remind you of that guy who reads the local news at eleven. As he shakes your hand with his powerful, manly grip (learned at his sales training seminar), you feel his brimming confidence being transferred directly into you. 

[  ] Advisor 'B' shuffles up the walk looking like a victim of shell shock on his first outing from the rest home. His few remaining hairs are pathetically combed over his bald pate. His shoulders hunched, he avoids direct eye contact. As he limply shakes your hand, he seems to be saying, "Please don't hit me."

Question #4: Investment Sophistication

[  ] Advisor 'A' is a man in charge of markets. Because his business card bears the name of a famous Wall Street firm, he must be a Wall Street insider wired into the very highest sources. With his hand on the tiller, you will make money no matter what happens. Furthermore, his PowerPoint slide show demonstrates like a Euclidian theorem how your money will compound 10% year after year. Soon you will be living on the Rue de Facile (French for Easy Street).

[  ] Advisor 'B's attitude is morose. All he talks about are the risks, never the big returns you were hoping for. He looks over your investment statements and just shakes his head in dismay, like he's reading the obituary of his best friend. When he talks about putting money into the stock market, his eye starts to twitch.

SCORING:

Each time you chose Advisor 'A', score 0 points.
Each time you chose Advisor 'B', score 25 points.

INTERPRET YOUR RESULTS:

0-99: "A fool and his money are soon parted."
100: Congratulations