Choose a Charterholder

• Invest through a firm that is compliant with the Global Investment Performance Standards, also known as GIPS®
• Clearly understand the investment strategy - Good investment strategies should make sense and don't require explanations with complex language or confusing jargon. If you don't understand it, consider finding an adviser who can clearly explain their approach. 
• Match the investment strategy to the reported performance - Compare the adviser's performance claims to commonly available benchmarks. Are these results believable? If not, find out how they were calculated and by whom.
• Avoid e-mail solicitations and internet fraud - Unsolicited e-mail claims should be treated with great suspicion, especially if you don't know the motivation behind them. E-mails lists are easy to obtain and e-mails are easy to send.
• Be wary of those offering "sure things," quick returns, and special access - These should all be red-flag phrases for the wise investor. The closest thing to a sure bet is short-term notes issued by the most stable governments. 
• Understand what, if any, regulatory oversight exists - Regulation of the different kinds of investment firms is not uniform. For instance, hedge funds are less regulated than mutual funds, and advisers registered offshore may not have the same legal requirements of firms in your country. Pay attention to who's looking out for you and how.
• Assess the operational risk and infrastructure - It is important that a firm has separate, independent operations for asset management, trading, and custody to provide an important barrier to many kinds of fraud. Ask about these important firewalls.
• Find out about independent audits and who performs them - As an individual investor it's hard to assess the financial statements of an organization on your own. Independent auditors provide another set of eyes that know what to look for to verify the books.
• Assess the personnel - Are the people who will advise you and conduct your investing honest, qualified, trained, and experienced? Do they abide by a code of ethics that requires them to place the interests of their clients ahead of their own?
• Limit your exposure - Diversification is one of the most fundamental and enduring investment principles. It's worth thinking twice before investing more than five percent to ten percent of your assets in one strategy, one industry, or one security.
• Perform a quick background check - Don't get pressured to make a decision before you have checked for past censures, pending investigations, or lawsuits, and verified legitimate registration. For firms and advisers based in the U.S., check the Financial Industry Regulatory Authority and the Securities and Exchange Commission for more information.