Finding a Financial Advisor is Risky Business

Finding a financial advisor on your own or waiting until they find you is the question.  What are the most frequently used strategies if you want to find a financial advisor on your own? How do you minimize your risk of making a major financial mistake?

Financial advisors who find you are loaded with hidden risks. Most of the time they are salesmen who use aggressive sales tactics (cold calling, free lunch, free seminar, affinity marketing) to find and meet you. They have to meet you to sell you their products. The lower the quality of the advisor the higher the probability he will use aggressive sales tactics to find and meet you.

How big is the problem? 93.7% of investors told us they do not want salesmen investing their assets.

There are three popular ways of finding a financial advisor on your own. Each one has its own risks and rewards.

Referrals (Friends & Family) 

You ask friends and family for the names of their financial advisors. You hope their positive experience in the past will be your positive experience in the future. If only it was that simple.

The people you know may refer advisors because the stock market was up 30% last year and they had a positive experience. You select the advisor based on your friends and family’s experience during a bull market. Unfortunately, you select the advisor at the beginning of a bear market. One year later your assets have lost 25% of their value.

Referrals (Professionals)

You are using similar logic when you ask your CPA for a referral. You assume he knows the competent, ethical advisors in your community. This way, you reduce your risk of selecting a really bad advisor.

What you don’t know is the CPA has a reciprocal referral relationship with the advisor. This is how they grow their respective businesses. Of course, this information is withheld from you. Otherwise, you might think the CPA and advisor have potential conflicts of interest.

Don’t assume reciprocal relationships are the exception. They are the norm.


The Internet has a unique characteristic that benefits you if it is used properly. You can find advisors on the Internet and you can learn more about them while maintaining your anonymity. You can visit a website like to find an advisor, view a quality rating, and read a research report. Or, you can enter key words in Google (Financial Advisor City State) and conduct your own research.

You can visit the advisor’s website to learn more about his credentials and services. You can’t do this when you use the Yellow Pages. A little bit of research can help you determine whom you want to talk to.

You can also conduct a Google name search. We recommend using the search function to view additional information about the advisor’s firm. Look for articles that have been written by the advisor. Look for stories, quotes, and mentions that are written by third parties.

You should know a lot about the advisor before the first meeting.

Other posts from Jack Waymire

2 responses to “Finding a Financial Advisor is Risky Business”

  1. Paladin is in the process of adding Reviews & Ratings to the profiles of RIAs and IARs who are members of its Registry. And, we will be adding this review capability to the Robo research reports we recently published. The times are definitely changing.

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