Part 1: Make investment or insurance recommendations for compensation

This should be the easy one.  Does the person you rely on for your investment advice receive compensation?  Unless you are talking to your Father who isn’t charging you anything, then you are likely paying something.  Whether that something is agreed to in a contract, is invoiced directly to you, or is paid by the product you purchased, then part one of the five part test is met.

Just about every advisor providing advice for a fee would meet part one of the five part test.  Unfortunately there are a number of “advisors” who aren’t really investment advisors at all.  When in doubt, take a look at Investment Advisor Public Disclosure site to read up on your advisor.  How long have they been in the field?  Who have they worked for?  Have they had any complaints against them?  This will be useful information that anyone with an internet connection can access.