NEW YORK (AdviceIQ) -- Comparison-shopping is important before choosing a new refrigerator or lawn mower. It's even more essential before choosing an investment adviser. But don't believe you can compare investment returns, because you can't.At any retail store, you can spot comparison shoppers a few aisles away. They are the ones carrying articles from Consumer Reports, badgering the salesperson with a million and one questions. People who manage money well are usually big fans of comparison shopping. Unfortunately, there is no easily available consumer's report on advisers. Even more frustrating, those selling financial products often have incentives not to be forthcoming with the information that is crucial for comparison. One aspect of shopping for an investment adviser is knowing what questions to ask. One common mistake is to focus on investment returns. Shoppers may ask for the average recent returns of the adviser's portfolios or may want to know whether the adviser's returns beat the market averages.
By Rick Kahler
If so many games can be played around returns, what questions should a savvy comparison shopper ask? Focus on one word: transparency. You want to find out if the returns, costs and risk (standard deviation) of your portfolio are clearly displayed and contrasted against appropriate benchmarks. Kahler Financial Group in in Rapid City, S.D. AdviceIQ is a network of financial advisors that writes insightful articles for the public about investing and wealth management. All articles are edited by AdviceIQ's editor in chief, Larry Light. AdviceIQ certifies that all its advisors have no regulatory infractions. To subscribe to AdviceIQ's Rss feed for personal finance articles written by financial advisors and AdviceIQ editors,
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