$45 per quarter would be equal to an annual fee of 3% of his starting balance. John called me somewhat frustrated and said that he'd be willing to set up an account with me, but how would it make sense if in addition he'd have to pay my advisory management fee?

That was a good question because it certainly doesn't make sense to have an account in any type of market environment and pay about 6% in fixed annual fees.

However, what John didn't know was that if you have an account with a registered investment advisor who is affiliated with custodial broker, fee structure changes.

What did that mean to him? It meant that I opened account for him as a new client. He now has no annual fees, other than my management fee, and his 180 day holding period for mutual funds is reduced to 90 days, minimizing, if not eliminating, likelihood of an early redemption fee.

The net result was that he would receive benefit of my experience-which he already trusted based on my track record of pulling clients out of market in October 2000-and it would cost him no more, and likely less, than his discount brokerage account.

Needless to say, John was very relieved. In essence, he traded broker garbage fees for professional management at no additional cost to him.

And, since he itemizes his deductions on his tax return, all fees paid are tax deductible, which is just an added bonus to factor into equation.

It turned out to be an all around win-win situation for John. I encourage you to review your situation and see if what looks like a discount in fees is actually costing you a premium.

How Do You Find The Advisor for You?

Since there are good Investment Advisors and bad ones, how do you find former and avoid latter? Good question, and there are some keys. Most large brokerage firms list Investment Advisors they work with and maintain information about their past performance. This is not a foolproof resource, though, since they tend to recommend Investment Advisors who invest in their products or clear their business with firm. So if you pursue this avenue, you need to watch for conflict of interest issues.

You can always subscribe to one of numerous database services that include information, and sometimes rankings, on Investment Advisors. These services tend to be fairly pricey, though, so they may not be your best choice. Another option is to find articles (yes, like this one) or free newsletters written by Investment Advisors. If you find one or several that make sense to you, check out IA and see if there's chemistry between you.

When checking out advisors, here are some things to keep in mind:

1. Verify their record -- look over their past performance; 2. Consider their system. Will it work in different market environments?; 3. As best you can, check out their operation and 4. See if they've had regulatory problems. 5. Equally important as doing your due diligence is making sure there is good communication between you and your advisor and that you trust this person with your money choices.

Another quick free way to scan through a select database and find a wide variety of candidates is with www.investortree.com . I'm registered there myself as an advisor and know that company did a background check regarding registrations and regulatory issues.

An important question to ask is how advisor gets compensated. You want to stay away from commission junkies or salesmen disguised as advisors. I believe that you will get best unbiased advice from someone who is paid a management fee based on value of assets that you entrust them with.

To take it one step further, ask if advisor invests his own money in same methodology that he recommends for his clients. If he doesn't, ask why. If you don't like answer, close your check book and run as fast as you can.

Choosing an Investment Advisor can yield long-term high profit benefits. I encourage you to consider it if you haven't before. However, as with any relationship, make sure there's a fit before you jump into it.