Investment Advisor Criteria

By: Ian Campbell | Fri, Jul 20, 2012
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Three years ago I was asked to summarize the criteria I would want to find in an Investment Advisor. Given what I see as ongoing significant changes in the financial markets, and what I believe to be an even more disconcerting macro-economic environment than the one that prevailed in mid-2009, I decided to update my previous investment advisor 'wish list'. Here it is.

  1. While it goes without saying, I'll say it anyway: Criteria #1, #2, #3 to infinity are openness, honesty, integrity, etc.

  2. Smart, with a commitment to detail. Actually, preferably a Chartered Accountant (or if I was in the U.S. a CPA) with a strong theoretical accounting background and some real business operating experience.

  3. Someone evidently in good health, who has a real chance of 'being on the right side of the grass' for some time.

  4. Someone who is well traveled - in particular someone who has traveled (preferably on business) to China in particular. The ideal candidate would also have traveled in India, Brazil, Europe, and perhaps Russia.

  5. Student of macro-economics with no predetermined view on how things are going to unfold going forward - i.e. A good listener and flexible thinker who is not 'locked in' to any given mantra, such as "the U.S. is resilient and so always will be the world's #1 economy". While that view might prove to be right, I would only be interested in dealing with someone who constantly tested such a theory and was prepared to adapt away from it if logic so dictated.

  6. Proven track record, particularly in the difficult market conditions of all or some of the early 80's, the early 90's, the period immediately after the ' meltdown', and the post-2007 financial markets.

  7. Has strong references from an existing client base.

  8. Skeptical of the manner in which the Investment Business generally operates.

  9. A disbeliever in the 'efficient market theory'.

  10. Someone who understands the changes in the financial markets, and who has a sensible strategy to invest and trade in markets that are dominated - and increasingly so - by high frequency algorithmic trading.

  11. Someone who charges reasonable fees, who does not consider 'returns equal to the 'market indices plus their fees' to represent 'investing success', and who does not expect participation in annual returns over a stated percentage.

  12. Someone who is a 'clients first' person, and who has a great sense of responsibility to their clients.

  13. Someone who has a clear understanding of each client's risk/reward tolerance and hence appropriate 'asset allocation' (broken down into measurable steps), and is not locked into the 'investment business mantra' of diversification where market conditions and prospects ought to dictate 'investment focus'.

  14. Someone who actually does meaningful research on the companies they invest client's money in, including visiting with company presidents, company facilities, etc.

  15. Someone who purposefully involves his or her clients in the investment 'decision making ' process.

  16. Mature, with at least 10 - 20 years investment management experience and good judgment.

  17. Good listener open to communication with his/her clients, who has strongly held opinions, but who adjusts those opinions continuously with both conversational and documentary exposure - and has sound logic to back up their opinions.

  18. Good communicator of their opinions.

  19. Proven track record, particularly in the difficult market conditions of all or some of the early 80's, the early 90's, the period immediately after the ' meltdown', and the post-2007 and current financial markets.

  20. A monthly reporting system that suits the way the client wants to review their portfolio and related investment return results.

  21. Recognizing it is unlikely that any one Investment Advisor would satisfy all of the criteria in this wish list, you might want to go beyond the individual Investment Advisor and look to see if the people in the Investment Advisor's firm collectively satisfy all these criteria.

Finally, if you know or identify an Investment Advisor that satisfies all these criteria please let send me their coordinates by e-mail at



Ian Campbell

Author: Ian Campbell

Ian R. Campbell, FCA, FCBV
Business Transition Simplified

Through his website and his Business Transition & Valuation Review newsletter Ian R. Campbell shares his perspectives on business transition, business valuation and world economic and financial markets influences on those two topics. A recognized business valuation and transition authority, he founded Toronto based Campbell Valuation Partners Limited (1976). He currently is working to bring his business valuation and transition experience to both business owners and their advisors in our new economic, business and financial markets normal.

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