Using a professional investment adviser-is it worth it?

Many people who invest their money in stocks, bonds, and other types of investments choose to use a professional investment adviser to help them make the smartest decisions when it comes to where and when to invest their money.

What is an investment adviser?
A professional investment adviser is one who gives advice about securities to their clients, such as investing in stocks, bonds, mutual funds, IRAs, and other forms of investments. In exchange for these services, they charge a fee or make a commission.

Investment advisers are useful to those who are just beginning to invest, or who have a lot of money to invest and are not sure where the smartest places to do so are. Investment advisers are also helpful to anyone who is not comfortable with their own knowledge of investing and would like the educated advice of a professional.

What costs should I expect to pay for a professional investment adviser?
When it comes to paying investment advisers for their services, they can charge for their servives in a number of ways, including:

Hourly fee. This type of adviser bills his or her clients by the hour for the services he or she performs.

Fixed fee. An investment adviser who charges a fixed fee will typically charge a flat fee for a certain amount of hours. The client then knows exactly how much to expect.

Commission based. This type of arrangement is similar to a broker. A commission based investment adviser charges commission on a certain percentage of the securities they sell.

Combination. Some investment advisers will charge for their services with some combination of the above fees.

Before you hire any professional investment adviser, it is very important that you know how they get paid. Make sure you understand completely their fee structure, so you won't have any surprises when it comes time to pay them for your services.

As far as which type of fee structure is best, it depends on your investment habits and your needs. Some professionals recommend paying by the hour, which could save you money if you are trading large amounts of money.

If you have a smaller portfolio, however, and don't do a lot of trading, a commissioned based investment adviser could be a good idea for you.

How do I find a professional investment adviser?
When looking for a professional investment adviser to help you manage your investments and make the most of them, you will want to meet with them face to face. Make sure you have a rapport with them and that they are someone you will be comfortable working with and entrusting your money with. Some questions to ask include:

What experience do you have with people in similar circumstances as mine?

What licenses do you hold and what organizations are you registered with?

What products and services do you offer?

Have you ever been sued or disciplined for unethical behavior?

What is your fee structure? Are you paid in a fixed hourly rate, by commission, or by a combination?

These are just a few questions you should consider asking before hiring a professional investment adviser.

A professional investment adviser can provide a number of valuable services to investors, but these services do not come cheap. Each investment advisor will structure his costs and fees differently, so make sure you understand how they expect to be paid before signing with one.

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