Investment Advisers

An investment adviser is a

  • firm or person
  • that, for compensation, engages
    • in the business of providing investment advice to others about the value of or about investing in securities – stocks, bonds, mutual funds, exchange traded funds (ETFs), and certain other investment products


  • in issuing reports or analyses regarding securities, as part of a regular business.

Advisers typically provide ongoing advice about buying, selling and/or holding investments and will monitor the performance of your investments and their alignment with your overall investment objectives.  The fee that you pay for this advice is typically based on the value of all of the assets held in your account with the adviser.  You may pay other fees and costs related to servicing your account and the investments that you buy, sell or hold.  Advisers also may give advice about market trends or asset allocation or offer financial planning services. 

Selecting an adviser

Investment advisers are required to act in your best interest and not put their interest ahead of yours.  At the same time, the way advisers make money creates some conflicts with your interests.  You should understand and ask an adviser about these conflicts because they can affect the investment advice they provide.  Conducting a thorough inquiry into an adviser’s services, fee arrangements, and investment offerings will help you select an adviser capable of serving your investment objectives.

Before selecting an adviser, you should consider:

  • what services and products you need,
  • what services and products the adviser can provide,
  • any limitations on what services and products the adviser can provide,
  • how much you will pay for services and transactions,
  • how the adviser gets paid, 
  • what conflicts of interest the adviser may have when giving you investment advice, and
  • whether the adviser has legal or disciplinary history and, if so, for what type of conduct.

The services and advice your adviser provides and what fees you pay will ultimately depend on the contract you negotiate with your adviser.  Make sure you read and understand this agreement, as well as the adviser’s relationship summary and Form ADV Part 2 Brochure.

Advisers generally must register with the Securities and Exchange Commission or state securities authorities.  has a free and simple search tool that allows you to find out if your investment professional is licensed and registered, and if the firm or person has had run-ins with regulators or received complaints from investors.  Always check out both the person as well as the firm. 

If you wish to file a complaint regarding the conduct of your investment adviser, please check out our Investor Bulletin: Investor Complaints.

Questions to Ask

Here are some of the questions to ask when evaluating an investment adviser:

  1. Are you registered with the SEC, a state, or the Financial Industry Regulatory Authority (FINRA)?
  2. May I have a copy of your firm’s latest Form ADV, including the brochure and the brochure supplement?
  3. Have you or your firm ever been disciplined by any regulator?  If yes, for what reasons and how was the matter resolved?
  4. Have you ever been sued by a client who was not happy with your work or the services you provided or the products you recommended?
  5. How are you paid for your services? What is your usual hourly rate, flat fee, or commission?
  6. What experience do you have, especially with people in my circumstances?
  7. Where did you go to school? What is your recent employment history?
  8. What products and services do you offer? Are you only supposed to recommend a limited number of products or services to me? If so, why? 

Additional Information

Investor Bulletin: Top Tips for Selecting a Financial Professional
Investor Bulletin: Transition of Mid-Sized Investment Advisers from Federal to State Registration
Investment Adviser Registration