This is a trick question. If the answer is: "It's got a great performance history" or "They have great managers", there is only one thing to do. RUN!!! Some of the funds you own should actually have fairly mundane track records. This is because all asset categories can't be hot all of the time. Most of the money being invested during 1999 was going to tech. funds and large US growth funds. The reason? Great short term performance. This is why many investors lost 50 to 80% of their stock portfolio's value during the market downturn. What goes up will come down.
Even though this is a basic tenet of asset management, I almost never see it carried out. This can add tremendous additional returns over time and be very helpful in controlling the risk of the portfolio. The advisor should rebalance based on deviations from a target that are predetermined. For example, if the large US stock portion of the portfolio is supposed to be 10% and it deviates to 15% because of market conditions, then it is the advisor's job to bring the mix back to 10% with as little cost as possible. In some cases this can be done at little or no cost using cash flows in and out of the funds.
If the look you get appears to be a blank stare… RUN!!!! Taxes can be a tremendous expense to investors. Many investors have had the grueling experience of paying taxes on portfolios that declined in value. The other problem is that mutual funds can be horribly tax inefficient. Many times investors are forced to pay taxes at short-term capital gains rates due to actions taken not by themselves, but by the fund manager. Over the long-run, failure to tax manage an investment portfolio can cost the investor dearly and create a drag on returns.
The investment world can be very confusing for those on the outside looking in. I will often explain the alternatives by breaking them into four different groups.