DEFINITION of 'Advisor'

1. The person or company responsible for making investments on behalf of, and/or providing advice to, investors.

2. In the context of the mutual fund business, an advisor, also known as an investment advisor, is an organization employed by an investment company to manage a particular fund's portfolio. A fund's advisor assigns a manager(s) to make the day-to-day decisions involved in the purchase and sale of a fund's securities according to stated strategies and investment objectives.


1. It's a good idea to choose an advisor carefully according to his or her professional credentials, experience and expertise. Fees and services provided are also important considerations.

2. A fund's advisor has the primary responsibility for the investment performance of the fund. This responsibility may be shared with another investment advisory firm, with each advisor focusing on different asset types in a portfolio. Advisors receive an annual management fee, which is computed as a percentage of a fund's assets under management. The fee makes up a large portion of a fund's operating expenses. For fund investors, judging the quality of a mutual fund's portfolio management is one of the most important considerations for investing in a fund.

  1. Fairness Opinion

    A report evaluating the facts of a merger or acquisition. Fairness ...
  2. Investment Advisor

    As defined by the Investment Advisors Act of 1940, any person ...
  3. Financial Planner

    A qualified investment professional who helps individuals and ...
  4. ADV Form

    A required submission to the Securities and Exchange Commission ...
  5. Certified Financial Planner - CFP

    The CFP legal team has provided its official definition, along ...
  6. Analyst

    A financial professional who has expertise in evaluating investments ...
Related Articles
  1. Retirement

    Profiling: It's Not Just For The FBI

    Learn how to quantify each client's specific dreams and create a realistic financial plan.
  2. Budgeting

    Find The Right Financial Advisor

    Learn how to weed out those who are just out to make a quick buck.
  3. Personal Finance

    Do You Need A Financial Advisor?

    Not everyone needs a professional. Find out how to make the call.
  4. Brokers

    Choosing An Advisor: Wall Street Vs. Main Street

    A high-profile brand name alone won't meet your personal investing needs. This article will show you what else to look for.
  5. Retirement

    Financial Planning: It's About More Than Money

    Determine what you need to do now to make a drastic lifestyle change later.
  6. Personal Finance

    RV Travelers: A Niche Market For Advisors

    RV travelers can provide an interesting challenge for advisors.
  7. Professionals

    Time Management Tips For Financial Professionals

    Learn about common time wasters and discover time-management tips that will get more work done in less time.
  8. Professionals

    How To Target Ideal Customers

    Expand your definition of a lucrative client and uncover a new realm of possibilities.
  9. Options & Futures

    Find Your Niche In The Financial Industry

    In this article, we'll give you the tools you need to discover the financial career that fits you the best.
  10. Professionals

    A Close Look At Certified Senior Designations

    We examine the validity of senior financial designations and whether they are worth pursuing.
  1. How do mutual funds compound interest?

    The magic of compound interest can be summed up as the concept of interest making interest. On the other hand, simple interest ... Read Full Answer >>
  2. Do mutual funds pay interest?

    Some mutual funds pay interest, though it depends on the types of assets held in the funds' portfolios. Specifically, bond ... Read Full Answer >>
  3. Why have mutual funds become so popular?

    Mutual funds have become an incredibly popular option for a wide variety of investors. This is primarily due to the automatic ... Read Full Answer >>
  4. Do mutual funds pay dividends?

    Depending on the specific assets in its portfolio, a mutual fund may generate income for shareholders in the form of capital ... Read Full Answer >>
  5. Can mutual funds invest in hedge funds?

    Mutual funds are legally allowed to invest in hedge funds. However, hedge funds and mutual funds have striking differences ... Read Full Answer >>
  6. What are the risks of annuities in a recession?

    Annuities come in several forms, the two most common being fixed annuities and variable annuities. During a recession, variable ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
  2. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  3. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  4. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  5. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  6. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!