Five Star Quality Rating

Paladin uses a proprietary methodology to rate the quality of financial advisor credentials, ethics, and business practices one to five stars. Paladin only profiles five star rated advisors in the Registry.

Paladin ratings are based on data that are submitted by advisors. We validate the accuracy of certain data if advisors subscribe to Paladin's Financial Advisor Due Diligence (FADD) service. If advisors do not subscribe to the FADD service Paladin publishes data as submitted by advisors.

Paladin's five star quality rating and FADD service do not constitute an endorsement, recommendation, guarantee, or favoring by Paladin of any advisor and do not constitute a claim by Paladin, whether explicit or implicit, that advisor credentials, ethics, business practices, products, services, opinions, advice, recommendations, or claims are reputable, honest, competent, or will result in exceptional financial returns. Investors are solely responsible for advisor selection decisions that may be based on information that is published in the Paladin Registry. Investors are encouraged to request additional, current information from advisors that validates their competence, ethics, business practices, and services.

5 Tips for Avoiding Investment Scams

Illegal investment scams have received a lot of publicity since Bernie Madoff turned himself in to the authorities. But, most investors do not believe they will be impacted by illegal scams. What has not received a lot of media attention are "legal" investment scams that created hundreds of billions of dollars of annual losses for investors.

You might be asking how a scam can be legal. Legal scams occur when advisors put their financial interests ahead of yours. For example, advisors recommend low quality products because they make more money. This conflict of interest is unethical, but not illegal. It is your responsibility to avoid these scams.

An easy way to learn how to avoid scams is to read these tips.

Watch out for advisors who want to be your friend. Unscrupulous advisors know you let your guard down when you like someone. Consequently, it is easier to sell you bad products that make them more money. You should be making objective decisions when you select financial advisors, not subjective decisions based on perceived friendship.

Don’t believe everything you hear. Less scrupulous advisors know they can make misleading statements and you have no proof when you find out you were lied to. Require all important information that influences your investment returns, including selecting financial advisors, be provided to you in writing.

Check all information about financial advisor ethics with four regulatory agencies: www.FINRA.org, www.SEC.gov, your state’s Securities Commissioner, and your State’s Insurance Commissioner. Make your research easier by asking advisors for their securities license (CRD), insurance license, and registration (IARD) numbers. Use the numbers to look-up the advisors' compliance records at the various regulatory databases.

Don’t be shocked if you find no records for particular companies, products, or advisors. They may not be properly registered in your state. In that case, you should contact the FBI or your local police.

Never make a check out to the advisor or an advisor’s company, unless that company is a brand name firm that you are personally familiar with. Some advisors use independent, third party custodians to hold your assets, for example: Charles Schwab, Fidelity, Pershing, or TD Ameritrade.

Make sure the custodian produces "independent" reports that provide investment information that includes current asset valuations, details for transactions, and your performance.

Do not invest in products that claim high performance for low risk. Unscrupulous advisors know this is what you want to hear, but these types of products do not exist. If you want higher returns you have to accept higher risk. If you want lower risk you have to accept lower returns. There are no exceptions and there are no free lunches.