A Few Tips to Help You Find the Best Investment Consultant

Defined-benefit pensions are on the deathwatch. You face hard limits on retirement account contributions. With those hurdles, many people look toward investing as a solution for financing their retirements.

Of course, investing education is almost non-existent for most Americans. That lack of education makes stock market speculation incredibly risky for rank-and-file citizens.

Self-education can take you part of the way in terms of understanding the essentials. Unfortunately, some markets prove so complex that only experts understand them. Dabblers often receive brutal financial punishment for their mistakes.

What you need for success in investing is an experienced investment consultant. The challenge comes when you must find select the consultant. How do you do that?

It’s also important to understand the difference between financial advisors and consultants. So, before jumping into the tips, we’ll take a quick look at the difference between them.

Financial Advisor vs Investment Consultant

A financial advisor provides a broad range of financial advice, such as:

In essence, they help you devise an overall financial strategy. Once you settle on the right strategy, they advise you on the steps needed to get there.

An investment consultant, by contrast, offers a fairly narrow range of advice. They only deal with investments, such as trading stocks and bonds, or investing on your behalf.

Personal stockbrokers or money managers both fall into the category of investment consultants. As a general rule, they don’t deal with long-term personal finance planning.

Start with Your Financial Advisor or Bank

If you already work with a financial advisor you trust, ask them for a recommendation for a dedicated investment consultant. They’ll likely know several good consultants and can even make introductions.

Starting with your own financial advisor offers a key benefit. They already know your financial situation and overall financial attitudes.

Say that you prefer a conservative approach. Your advisor will connect you with consultants who favor lower-risk investments. If you don’t mind some risk, they put you in touch with consultants who work with higher-risk or volatile markets.

Your financial advisor also knows your personality if you’ve worked with them for a while. That means they can help you avoid consultants with the wrong kind of personalities.

If you’re a reserved person, you’d probably dislike a brash, high-energy consultant. If you’re a type-A go-getter, you’d probably love the same consultant. A good advisor will work at getting you into the room with the right kind of personality.

Of course, not everyone works with a financial advisor. Most banks keep some financial advisors and investment specialists on staff. You can typically arrange a meeting with one of them by asking at your bank.

Even if they don’t typically handle the types of investments you want, they can still recommend consultants who do handle them.

Seek Recommendations from Your Personal Network.

If you don’t work with a financial advisor and have mixed feelings about your bank, you can ask around in your personal network. There’s a good chance that you know several people who work with consultants or know someone in investment consulting.

Ask what kind of investing those consultants focus on and what kind of results your friends or family have seen.

Pro Tip: Don’t ask about how much people made working with a particular consultant. Instead, ask about the rate of return in terms of percentages.

Also, remember that different kinds of investment offer different rates of return. High-risk investments yield large returns but only when successful. Low-risk investments offer smaller returns but more reliably.

Use an apples-to-apples approach when considering rates of return for different consultants. Compare consultants who favor lower-risk investments to each other. Do the same for ones who favor high-risk investments.

It keeps your perception of their results reliable.

If you get several glowing recommendations, don’t randomly pick one. Set up appointments with all of them. Discuss your investment goals and interests with them.

Once you hear what they all have to say, pick the consultant who seems most on-board with your vision.

Look for Sub-Specialization

Investment consultants are one specialization of financial advisors. Similarly, investment consultants often specialize in particular investment areas.

For example, let’s say that currency trades fascinate you. Rather than go in by yourself, you might seek out a consultant that specializes in FOREX trading.

The energy industry is in the midst of massive upheaval. That’s mostly courtesy of renewable energy initiatives and even blockchain technology. It also makes the oil market unpredictable, but potentially lucrative.

If you want to start investing in oil, you might look for an energy industry investing consultant. You can also turn to specialist groups that provide predictions, such as Dr. Ken Moors Energy Inner Circle.

Consultants who sub-specialize typically offer better advice about their area than generalists can. They spend more time reviewing a smaller field of trends and data. That lets them dig deeper and understand more of what’s happening in that industry.

Think of like the difference between an oncologist and pediatric oncologist. An oncologist can treat your child’s cancer. A pediatric oncologist, however, will know all the latest findings and options for treating cancer in children.

All things being equal, the pediatric oncologist will likely serve your child’s interests better.

Parting Thoughts on Finding the Best Investment Consultant

You can take several paths to find the best investment consultant.

Asking your own financial advisor or borrowing your bank’s in-house advisor is the most direct path. You can ask about consultants in your personal network. It’s the rare person who doesn’t know someone involved in investing.

If you want to get into a specific area of investing, you can look for consultants who sub-specialize it that area. They can provide you with more nuanced advice than a generalist.

Remember that you don’t have to work with the first consultant you meet. You can shop around until you find one who is on the same page as you.

Ready for your first adventure in investing but don’t have an investment consultant yet? Check out our post on best and newest companies to invest in.