Deciding how to invest your money is one of the most important decisions you face. Many people turn to a financial professional for help with this decision-making process. On March 18, the Ohio Department of Commerce's Division of Securities began administering and enforcing new laws that provide important consumer protections by regulating "investment advisers."

In general, an investment adviser is a person who is compensated for providing advice regarding investments in securities. Examples of securities include stocks, bonds, mutual funds, options, commercial paper and many other investment opportunities. An investment adviser may also be known as a financial planner, an investment adviser representative, an RIA (registered investment adviser) or a CFP (certified financial planner). In addition, a person who gives investment advice may also be a stockbroker, accountant or lawyer.

Understanding the new investment adviser law may help you decide which adviser or planner is right for you.

First, with a few exceptions, all persons holding themselves out as being in the business of giving investment advice must be either licensed by the Ohio Division of Securities or registered with the federal Securities and Exchange Commission. In addition, by December 31, all individuals employed or supervised by an investment adviser firm must by licensed by the Ohio Division of Securities. While such licensure or registration is not a government endorsement of the services offered, it does indicate that certain minimum legal requirements have been satisfied.

Second, persons licensed by the State must demonstrate that they have a minimum level of competency. This competency standard is satisfied by passing one of a series of tests regarding investments and securities laws, by a) obtaining one of several specified professional credentials, or b) by having been registered with the federal Securities and Exchange Commission for minimum number of years.

Third, advisers and planners are subject to certain conduct standards. For example, at or prior to the time you enter a contract or arrangement regarding investment advisory services, you generally must receive a brochure that describes the investment adviser's business practices and educational and business background. Advisers must keep specific records and follow special procedures when they maintain custody of your funds or securities. And, an adviser is obligated to provide only advice that is appropriate to your financial situation and investment objectives.

Fourth, the law prohibits advisers from engaging in fraudulent and deceptive conduct. Untrue statements and omissions of material facts are prohibited, as are all acts, practices and courses of business that operate as a fraud or deceit. Advertising must be truthful and not refer to or use any kind of testimonial.

Keep these legal requirements in mind when selecting a financial planner or investment adviser. There are many competent and qualified financial planners and advisers in Ohio, and the new laws will serve to protect consumers and preserve the integrity of the planning and advising business. When selecting a financial adviser, I would encourage you to:

• obtain recommendations from friends or family members

• do your homework by interviewing recommended advisers

• ask whether the adviser is licensed with state or federal authorities

• inquire how the adviser satisfies the minimum competency requirement

• ask for and read the brochure that describes the adviser's business practices and education and business background

• understand the adviser's fee structure and how you will be charged for services rendered

• be satisfied that the adviser understands your investment objectives and your risk tolerance

Most importantly, you must feel comfortable with your adviser or planner and keep an open and honest line of communication with them. And never be embarrassed or hesitant to ask questions.

By December 31, the Ohio Division of Securities will have a complete record of all investment advisers and financial planners operating in Ohio. At that time, you may contact the Division at 1-800-788-1194 to obtain the licensing status and other background information about individual investment advisers as well as investment adviser firms. You may also obtain the division's free publication entitled "Who's Who in the Financial Planner and Investment Adviser Field" by calling 1-800-788-1194 or by visiting the division's Internet Home Page at www.securities.state.oh.us