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.

Can FINRA and the SEC Protect You?

In case you are not familiar with the acronyms: Financial Industry Regulatory Authority (FINRA) regulates 5,000 broker/dealers and 675,000 investment representatives and advisors who hold securities licenses. The Securities & Exchange Commission (SEC) regulates thousands of investment advisory firms, mutual fund companies, and the securities markets.

FINRA is a Self Regulatory Organization which means the financial services industry is regulated by executives from the major financial services companies. That’s right; the industry regulates itself. There is no independent third party that regulates the activities of broker/dealers and sales representatives.

The SEC is a federal agency that is controlled by politicians who receive millions of dollars of contributions from Wall Street to make sure regulations favor its companies and not investors. That’s right, the financial services industry is a special interest group that has tremendous influence over regulations that are supposed to protect investors from the financial services industry.

You cannot afford to have any illusions. Your financial future is at stake. These regulatory agencies provide limited protection because they are controlled or influenced by the financial services industry. Notwithstanding this major conflict of interest, there are two bigger problems that impact individual investors:

No agency can regulate what advisors “say” to you. What they say is contained in sales pitches that they use to win your trust and gain control of your assets.
The agencies take action after you have lost all or a significant percentage of your assets. Legal action may regain some of your assets, but that is expensive and time consuming. If you invested in a Ponzi scheme or some other type of scam, you will be lucky to get back ten cents on the dollar.

Advisors get away with deceptive sales tactics because there is no written record. Some of their most frequent tactics include:

Telling you they are investment experts when they are not
Telling you they can deliver high investment returns for low risk
Telling you they are trustworthy because they know you won’t take the time to check their compliance records
Using personalities and sales skills to get you to like them. They know you trust people you like
Using trust to sell the products that make them the most money
Giving you references that have been coached to make positive comments
Using the results of hot investment products to create fictitious track records

Most of these sales tactics are legal and advisors may receive a slap on the wrist for violations. Consequently, advisors have a lot to gain (your assets) and very little to lose (slap on wrist) when they use aggressive sales tactics.

Your best protection is to require all key information to be in writing. That is what institutions (pension funds) do when they select advisors. DO NOT accept verbal information that impacts advisor competence, ethics, or business practices. The more you follow this simple rule the less exposure you have to deceptive sales tactics and scams.