Paladin Registry

Five Star Rated Financial Advisors

Financial advisors know investors want competent, ethical professionals to help them achieve their financial goals. Consequently, all advisors claim to be competent and ethical whether it's true or not. Their claims help them sell investment and insurance products to unsuspecting investors who believe their claims are true.

Paladin Registry was established in 2003 when a widely acclaimed book, " Who's Watching Your Money? The 17 Paladin Principles for Selecting a Financial Advisor", was published by John Wiley & Sons. The book became the foundation for a website that helps investors determine the "real" quality of financial advisors and planners.

Paladin is an objective, third party that avoids the conflicts of interest that afflict the financial services industry:

Paladin is an information services company, not a financial services company.
No advisor is employed by, licensed by, or affiliated with the Registry.
Paladin is not licensed to sell any investment or insurance products.
No financial advisor or firm has an equity stake in the Registry.
Paladin does not benefit from the decisions of investors who use its services.

Industry Standards for Advisors

One major form of risk for investors is the deceptive sales tactics that advisors use to sell themselves as investment experts. A second source of risk that is hidden from investors is the general lack of industry standards for advisors. No minimum requirements make it easy for companies to hire and license thousands of new advisors every year and get them producing revenue the same day they receive their licenses.

There are no minimum education requirements for advisors.
There are no minimum experience requirements for advisors.
Minimal financial knowledge is required to pass licensing tests.
There are no mandatory disclosure requirements for advisor qualifications.
Sales representatives are held to low ethical standards.

The result is a high percentage of advisors have a lot to hide and the industry has made it easy for them to withhold that information.

Why Rate Advisors

Investors need an objective process for selecting financial advisors. That's because it's very risky selecting advisors using subjective processes:

Advisors make verbal claims in sales pitches.
Advisors omit information that may reduce their sales results.
Verbal claims are undocumented so they are easy to deny later.
Personalities and sales skills influence investor selection decisions

Paladin ratings are based on an objective process that helps investors determine the quality of financial advisors. Plus, the process includes documentation for information that investors need to select higher quality professionals.

The Rating Process

Paladin uses a proprietary algorithm to rate the qualifications of financial advisors. The rating methodology uses weighted values to determine the score of each advisor. For example, years of investment experience and certain industry certifications have higher point values than a college degree, but all three are important.

The rating is not a designation or certification that advisors earn by completing course work and passing examinations. A rating is a value (number of stars) that's based on a comprehensive review of advisor qualifications.

Primary Rating Criteria

Paladin's rating algorithm measures 17 criteria that impact the advisors' ability to deliver competent, trustworthy advice and quality services. Advisors must meet the following minimum requirements to achieve the Registry's highest rating:

•They must be Registered Investment Advisors (RIAs) or Investment Advisor Representatives (IARs).

• They must provide written acknowledgement that they are financial fiduciaries.

•They must have clean compliance and criminal records.

• They must charge fees as their primary or only method of compensation.

• They must provide sophisticated wealth management services.

To achieve higher ratings advisors must score well in three categories of information: credentials, ethics, and business practices. Plus, they must also be willing to provide full written disclosure for potential conflicts of interest and compensation.

Registry Ratings

Based on an objective, standardized review of their qualifications, financial advisors and planners receive one of the following five ratings:

Five star rating (7% of advisors)
Four star rating (8% of advisors)
Three star rating (10% of advisors)
Two star rating (25% of advisors)
One star rating (50% of advisors)

The preponderance of one and two star ratings shouldn't be a big surprise. Most advisors don't provide advice. They are sales representatives who are paid commissions to sell investment and insurance products. Consequently, they don't meet the Registry's requirements for higher quality ratings (three, four and five stars).

Ratings Benefit Investors

This Registry service was designed to benefit investors who do not know how to determine the actual quality of advisors. All too often investors select advisors who are friendly and say the right things - for example, they can produce high returns for low risk. Investors use Registry ratings and documentation to:

Screen-out lower quality, unrated advisors.
Document advisor information that was used to produce the ratings.
Take control of advisor information that they rely on to select professionals.
Make comparing advisors to each other easy.
Reduce the influence of advisor personalities, sales skills, and brand names.
Obtain full disclosure for potential conflicts of interest.

Unrated Advisors Represent Additional Risk

Investors have to determine the quality of "unrated advisors" on their own. This is more difficult than it may sound. That's because advisors are very skilled at hiding information they don't want investors to have. This creates a major financial risk based on investors' ability to obtain accurate information from advisors:

Investors have to know the right questions to ask
Investors have to know good answers from bad ones
Advisors have control of information that's presented in sales pitches
Investors have no documentation for advisor responses
It's easy for advisors to deny verbal information later later.
There are no disclosures for potential conflicts of interest and compensation.

Registry of Financial Professionals

The advisors who achieve five star ratings are invited to be profiled in the Paladin Registry. We limit the Registry to the top 7% for two reasons:

Investors have repeatedly told us they only want to interview five star advisors
Advisors with lower ratings prefer to hide them from investors because documentation exposes weaknesses

Authored by Jack Waymire

Co-founder of PaladinRegistry.com
32 Years of financial service industry experience
CEO and Chief Investment Officer of a financial advisory firm
Author of the best-selling book, "Who's Watching Your Money?"

This editorial is for information purposes only and is not intended to be financial, tax, or legal advice. We strongly recommend you use the services of a qualified professional for these types of advice and services. Please view the Terms of Use document at www.paladinregistry.com for additional conditions that apply to this information.