Frequent Questions
What is due diligence?
It is an objective process that prudent investors use to evaluate financial advisor qualifications "before" they follow advisor recommendations, purchase an investment product, invest their assets, or sign a service contract.
Why do I need due diligence?
You need due diligence because you want to select the advisor with the best qualifications, not the advisor with the best sales pitch.
Don't advisors have to meet industry requirements before they provide financial advice?
Unlike other professions, there are no minimum industry requirements for advisors. There are no education requirements, not even a high school diploma. There are no experience requirements. Plus, the minimum age to be an advisor is 18 and convicted criminals can obtain securities licenses. No minimum standards create substantial risk for investors.
Why does Wall Street fight full disclosure for advisors?
Disclosure reduces the revenues of Wall Street companies. You may not buy what their advisors are selling. Lack of disclosure transfers this risk to you. You may follow the advice of a low quality advisor who sells you under-performing investment products with high expenses.
Why is due diligence so difficult for most investors?
Due diligence is a three part process. First, you need a way to gather the same information from multiple advisors. Second, you have to know the right questions to ask. And third, you have to know good answers from bad ones. Very few investors take the time to develop a process and learn how to select advisors with the best qualifications.
It sounds like lower quality advisors hide information from investors. Why?
They know you will not follow the advice of advisors who lack education, experience, and certifications or have a history of cheating investors.
What information does an objective due diligence process focus on?
The process focuses on information that impacts advisor competence, ethics, and business practices. For example: Experience, education, certifications, compliance records, licensing, registrations, compensation, and investment expenses.
What types of due diligence are conducted by the Registry?
We use a two level due diligence process to gather data from advisors and publish reports. The first level, FADD™ (Financial Advisor Due Diligence), applies to all advisors who are listed in the Registry and Directory. A higher level of due diligence, FADD Certified™, means we have validated the accuracy of key information on the advisors' reports.
Why do some investors use the Directory to find advisors while others used the Registry's match service?
Investors who use the Directory prefer to conduct their own searches for advisors who work in their communities. Other investors prefer to submit limited information to the Registry and use our free service that matches them to local planners, advisors, and representatives who meet their specific requirements.
Does Paladin sell investor information to third parties?
Never. We ask for a limited amount of information if you use one of our search services. The professionals, who meet your requirements, are the only third parties who have access to the information that you submit to us.
How many advisors will contact me if I use the Registry's free advisor match service?
One, two, three, or four professionals will initiate contact based on your location, available assets, service requirements, and any special instructions you may communicate to us.