Looking for great investment advice? Here's what you must know: Is your prospective investment advisor in the day to day business of actually making money? If not, the advice you get will probably not be very helpful and could get you in trouble. But that's just the tip of the iceberg. Read on for more questions you need to ask.

After all, investment advisors come in many flavors: insurance salesmen, stock brokers, financial planners, and so on. They offer advice from real estate investing to estate planning. That's the reason why, if you are truly seeking "Investment" advice, you need to find someone who actually understands how to make money by investing.

That someone should not be your relative. And you definitely shouldn't base your investment strategies on a tip from a friend. Instead, find someone who is well educated in financial matters, properly credentialed, and, most importantly, works on a fee ONLY basis.

Why fee only? Because either way, an advisor's income is directly tied to their advice. You want to make sure that they will benefit from giving you advice that benefits you, not advice that benefits them.

An advisor who works on a fee only basis will have the primary objectives not to lose portions of your portfolio and to take the least amount of risk for a required rate of return. And believe it or not, if you work with a Registered Investment Advisor (fee only), he or she will have a fiduciary responsibility to YOU.

Most other advisors work for a commission. That means, that they will always have their eye on how much commission they will earn, which creates a built-in conflict of interest.

Of course, it is up to you to find, investigate and understand how your prospective advisor works. Specifically, how are they going to manage your money...

If you have invested for any length of time, you already know the difference between stocks, bonds, mutual funds and annuities. But what you might not know is which types of investments are truly best for your particular circumstances.

And whether you pay your advisor directly versus whether your advisor earns commissions for your investments will make a huge difference in what ends up in your portfolio. You should always ask them about their "investment philosophy" i.e., how would they manage your money?

Fee-only or not, there are a number of approaches to investing money. Many investment advisors believe in Modern Portfolio Theory and Asset Allocation. Some are strategic or tactical advisors, while others yet use fundamental or technical analysis.

Yes, that's quite a bit of jargon. I would not expect most people to know the intricacies of each method. But what you should know and ask is what type of system they use.

Just ask straight-forward questions such as the following: "What if my account value drops -- how would you protect me?" "Given a target rate of return, how much risk am I taking and how do we measure that?"

And here is the most important question of all: "How will you get paid?"

Of course, there are many more questions you can -- and should -- ask, but these will get you started. And the purpose of those questions comes down to this: You need to understand and feel comfortable with your investment advisor's philosophy.

Author's Bio: 

So here's how to keep your money safe and still watch it grow -- even now: Discover how the wealthy do it and get fee-only advisor Steven Floyd's free resources to follow their lead. Visit http://www.FeeOnlyFinancial.net or call him at 310-540-6197. And here's a related article on avoiding mistakes.