by Jack Waymire
Financial advisors know seniors and other investors do not have objective processes for evaluating their competence, ethics, business practices, and services. Seniors typically interview two or three advisors and select the ones they like the best or the ones with the best sales pitches.
Financial advisors want seniors to like them. See For Retirees, Investment Fraud Can Have a Friendly Face. They know seniors inherently trust people they like. And, once trust is established, seniors are very vulnerable if they selected the wrong financial advisors. So likable financial advisors are not necessarily competent, ethical advisors.
Subjectivity is a very dangerous way to select financial advisors. In the absence of an objective process financial advisors fill the void with sales pitches and sales tactics. They control what seniors see and hear. And, they withhold any information that may cause investors to reject their sales recommendations. The odds of seniors selecting the financial advisor with the best sales skills is about 85%. And yet, 94% of seniors have told Paladin Research (www.PaladinRegistry.com) they do not want sales reps investing their assets.
The other way to select financial advisors requires an objective selection process that puts seniors in control of the information they need to select financial advisors with the best qualifications. The process has five steps.
- Gathering Data: Seniors need a way to gather the same data from multiple financial advisors. They ask the same questions so they can compare advisor responses.
- Quality Ratings: Seniors need a way to rate the overall quality of advisor responses. For example, one advisor has more experience. Another advisor has better certifications. Which advisor is best?
- Comparison: Seniors need a way to compare financial advisors side-by-side so it is easy to see their differences.
- Interview: Seniors identify the best advisors and interview them.
- Selection: The last step is the selection decision.
How many seniors are going to take the time to develop their own objective processes? Not many, which puts financial advisors in control of the information that seniors use to select them.
There is an alternative. Paladin Research provides online tools that seniors use to gather data, rate the quality of advisor responses, and compare advisors to each other. All seniors have to do is input the advisors’ names and email addresses. Paladin tools do the rest. The tools are easy-to-use and they are free. Paladin also archives advisor responses so seniors have a permanent record in case there is a future dispute.
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