April 29, 2016
If you are seeking to improve the rate of return on your investments, selecting the right advisor for your unique circumstances is important.
“The advisor you pick shouldn’t just be smart,” says Lisa Kopp, Head of Traditional Investments Group at U.S. Bank, whose Wealth Management platform has 300 fund options. “The advisor should also have a systematic process in place for recommending funds for your portfolio. If the advisor doesn’t have an organized plan, mistakes can easily be made."
While Kopp and her team use a systematic process to conduct due diligence on money managers, not all investment advisors do. When you’re meeting with an advisor, Kopp recommends asking the following questions:
1. What type of access does your advisor have to research fund managers?
Although there is publicly available material about fund managers, your advisor should access
additional information to help make a
determination of how a manager may perform in the future.
Learning how much access an advisor has to managers can help you decide if he or she is qualified to make specific recommendations.
For instance, Kopp and her team had identified several strong managers for possible inclusion on the platform in the core fixed income area. However, as she and her team interviewed a specific manager and dug further into the performance record, they found that one sector was the source of most of the performance advantage.