How to Select a High Quality Financial Advisor

Most investors use subjective processes when they select financial advisors. For example, how many times have you heard someone you know describe their financial advisor as "nice, super personable, friend, etc."?   So often, investors select advisors based on: personalities, sales pitches, brand names, and promises of high returns for low risk. Unfortunately, an advisor's personality or sales pitches have nothing to do with their competence and ethics. Also remember that any promises are illegal (no one can predict future returns or events).

There has to be a safer, easier way for investors to identify and select advisors with the best qualifications, not the best sales pitches. There is!  It's the objective process that Paladin provides free of charge to investors.

It starts right here. Following are 10 tips that will help you select a high quality planner or advisor.

  1. ​​Require advisors to document information in writing so you have record of what they say.
  2. The professionals must be Registered Investment Advisors or Investment Advisor Representatives so they can provide financial advice and ongoing services for fees.
  3. Require advisors to acknowledge in writing that they are acting in a fiduciary capacity when they provide financial advice and services.
  4. Make sure advisors are compensated with fees for their knowledge, advice, and services.
  5. Check the advisor’s compliance record at FINRA.org, SEC.gov, or your state's Securities Commissioner to determine if the advisor has investor, company, or regulatory agency complaints.
  6. Google search the advisor’s name and the name of the professional’s firm.
  7. If the advisor provides a track record, make sure it is compliant with Global Investment Performance Standards and audited by an independent third party.
  8. Do not rely on references when you select a financial advisor. No advisor will ever provide a bad reference.
  9. If an advisor promises a specific rate of return in the future, obtain the information in writing and confirm it with the advisor's supervisor and compliance officer.
  10. Be very cautious when advisors want to be your friend. They know you let your guard down when you like someone. They also know you trust people you like. Once trust is established they can sell the products that make them the most money.

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