Small Business Investment Advice: Assessing/Scoring The Management

Small business investment advice can be hit or miss. It’s hard to know who to trust. Here are a few simple ways to find the best management firms for your investments, and how to know what’s good investment advice and what’s not.

Know Who to Trust

There are so many investment companies that will offer you advice to gain your business. With so many places competing for your investment business, it’s hard to know who you can trust. The first place to start is by asking friends and colleagues who they use. Get an idea of how things have panned out for them. You also want to make sure the people you are asking don’t have anything to gain by pointing you in one direction or another. If they have a vested interest in steering your business then it doesn’t matter what they say.

You also want to check the public records for the company. This will give you a good idea of whether or not they can be trusted. You want to avoid advice from investment advisors who are new to the scene or work for a company that is brand new. Everyone needs to start somewhere, but you don’t want to risk your money with a company that may not have the best advisors working for them.

Check with the SEC

There are records available publicly regarding complaints filed through the SEC. A company with a lot of complaints will not be one you want to invest in. No one can guarantee an investment will pay off, but a company with a high level of complaints filed should send off a red flag to you that this is not the place you want to be.

Assess the Performance

If you have already chosen a company and have been following their small business investment advice for a while, you will want to pull your records and look at the track records over the past year. Are you making more money than you are spending? Are the fees they charge not a big deal compared to the amount of money they bring in? If the answer is no to either of these you may want to consider finding another company. If the advice you’ve gotten is solid then you should see a pretty steady rate of return when you look at the records. If there are pretty big fluctuations in the performance this should be a red flag that you may want to find steadier investments.

Assessing and scoring the management of your small business investments is easy if you know what to look for. It’s also a necessary part of doing business. Be sure you are using management companies that can be trusted by building a report card of sorts to compare.


blog comments powered by Disqus
Scottrade