The world’s first financial advisor directory was the Yellow Pages®. All you had to do was thumb through the pages until you found the listings […]
There are hundreds of thousands of advisors, sales representatives, and insurance agents who claim to be financial planners. Planning by legitimate planners is one of […]
Every year Paladin provides education to thousands of investors who use the services of financial planners, financial advisors, and money managers. Our experience shows 90% of […]
Paladin surveyed 550 investors to determine why they used a Paladin Investment Performance Benchmark to monitor their financial advisors’ performance. Following is a brief description of […]
Identifying the best financial planner is not easy because anyone can call himself a financial planner. Plus, there is no licensing for planners and no […]
I have often preached to Users of Paladin services that the most dangerous type of financial advisor was an ethical advisor who turned rogue. These financial advisors acquired credentials when they were legitimate and used the credentials to rip-off investors when they decided to put their own interests first. And because the credentials were real, investors did little or no due diligence before committing their assets.
For example, Madoff was the chairman of NASDAQ and the president of one of the largest market-maker firms on Wall Street see Madoff: Don’t let Wall Street scam you, like I did. He looked legitimate and had credentials, references, and referral sources that helped him grow his business. It also pays to remember, he was not caught, and he turned himself in when the 2008 bear market created billions of dollars of distribution requests that could not be fulfilled.
Paladin Research conducted 15 minutes of Internet-based due diligence after Madoff surrendered to authorities. We found several inconsistencies and omissions that should have been red flags for investors. I can only conclude they were so mesmerized by Madoff’s credentials, background, and opulent offices that they did not think it was necessary to conduct any form of meaningful due diligence – even if they were going to invest $100 million. […]