Investor Checklist

Investment Advisor
12 -point Evaluation Checklist

brought to you by sidepocket

This checklist is designed to help investors evaluate different web or mobile-based registered investment advisor platforms (Robo-advisors) and identify the platform that best meets their investment goals and needs.

Licensing and Legal Registration

Advisor is registered with the SEC, and has a fiduciary duty to ther clients. Advisor has no negative marks or pending arbitrations.

Fees and Business Model

Upfront and clear pricing with no hidden fees, with cost that is proportional to the value-add . For example, fees for platforms that invest in passive (non-tactical) ETF rebalancing, with or without tax-loss harvesting, should be significantly lower than tactical, AI-driven, or more sophisticated investing tools. For platforms that do not monitor markets actively and rebalance actively, wrap-fees or % of AUM may not align with client incentives.

User Experience

Intuitive and easy-to-use design, clear and responsive navigation, informative visual layout, simple call to actions, no watchlists, no gimmicks or gamification that pushes you to trade more, rather than invest.

Transparency and Access

Advisor is providing real-time performance updates, always relative to a benchmark, at anytime.

Investment Approach

Advisor provides a robust set of investment strategies that have been tested in various economic environments, and have lower drawdowns, and higher risk-adjusted performance than market indexes.

Performance Quality

Advisor clearly displays performance relative to risk, look for Sharpe Ratios, Sortino Ratios, Volatility metrics, and Drawdown metrics.

Insurance protections

Verify that the advisor or broker that the advisor has partnered with is a member of SIPC. This ensures you are protected up to $500,000 per customer account, and up to $250,000 in cash balances, for theft, fraud, or other financial mismanagement.

Serviceability

Advisor under current regulations is willing and able to service you to the fullest extent. This can vary by country you live in, or even immigration status.

Educational Support

Advisor provides clear and concise access to information and explanation of metrics, functionality, and intended usage through their platform, or through third party content.

Custody and Clearing Trustworthiness

Advisor is a trusted custodian, or is partnered with a trusted custodian in regards to security, SIPC Insurance, technology offering, customer service, reputation, and longevity.

Customer Service

Advisor offers robust customer service via email, online chat, and/or phone service, and is reachable quickly during market hours, and within a reasonable amount of time during non-business hours.

Security

Advisor’s platform is secured with end-to-end SSL encryption, their website uses HTTPS, and they or their custody partner has a reputation for robust security with no history of hacks or information leaks.