Commission based advisors generally don't provide you with the type of reporting discussed in section 3. Good commission based advisors will treat you in an objective manner, but beware that you are not being sold an inappropriate investment vehicle because of the commission earned. They may also have some limitations on the potential investment vehicles, so check out their product availability as well. Commission based advisors can be research oriented but typically rely on someone else's research in order to free up time to make more sales. Reporting You should expect an appropriate accountability of your portfolio by receiving continuous reports from your advisor.
Weight adjusted indices are more appropriate for a diversified portfolio.
Index comparisons are most useful as a barometer to measure your portfolio's return. If the return is much lower or much higher then you should ask for an explanation, it is an indication that something out of the ordinary has gone on in your account. An executive summary should be provided to discuss what went on with the markets during the period, what went on in your account, what unusual events occurred during the period, why some chosen investments performed poorly or very well, and any anticipated changes. Good reporting provides you with more information, more information gives you a better understanding, and better understanding helps you make informed decisions while sleeping easier at night. Make sure you receive a sample copy of the advisors reporting.