Successful investors recognize the importance of education and knowledge when it comes to managing financial assets. But while they may spend countless hours learning about markets, securities, and associated risks, investors often overlook the qualifications of the professionals whom they hire to manage their money.
If you work with investment advisors, they will have access to the personal details of your finances, so their credentials should matter to you. There are a number of reputable and applicable credentials that financial professionals in different disciplines may hold, but none is as rigorously focused on investment knowledge as the Chartered Financial Analyst® (CFA®) designation. Understanding the significance of the CFA charter — and what is required of investment professionals in order to hold it — can be useful information when choosing an investment advisor.
The relationship between you and your financial advisor is an important one, and there are questions you should ask before proceeding. As with any important personal decision, you should devote time to making a careful evaluation of your situation, requirements and alternatives. It is impossible to guarantee the performance of a financial advisor, but asking the right questions can help you make the most appropriate choice for your needs. CFA Institute has created this fact sheet to answer North American investors' most commonly asked questions. You can learn more by visiting other Educated Investor fact sheets, such as Managing the Relationship Between You and Your Advisor. Additionally, investors may access Web links for investor organizations outside of North America.
Where to Turn for Help with Your Investments
There are many reasons you might want help with your investments. Perhaps you want to start a college fund for your child. Maybe you are concerned that you are not doing enough to save for retirement. Or maybe you simply feel the need to get your financial house in order.
Investing wisely is a function of your specific needs and goals. Each investor has different objectives that need to be met depending on age, income, planned activities, and attitudes about risk. How can you work with your investment advisor to best determine which investments are right for you? Among the important factors to consider are personal status, plans, and constraints. Some of the issues that you and your advisor should consider in defining the objectives that are right for you are listed below.
Goals and Needs. You may have specific goals and requirements that you want your investment portfolio to fulfill. For example, you may be funding college for children, business expansion, travel plans, or retirement needs. You should identify these goals and needs clearly with your investment advisor so that his or her recommendations for your portfolio can assist you in meeting them.