The Hidden Risk of Undocumented Advisors

"Your biggest financial risk isn't investing in the stockIn the absence of solid credentials, how do weak
market. It's bad advice when you invest in the stockadvisors compete?
market. Low quality advisors, with very fewAdvisors with bad credentials use a time-tested
credentials, are the primary providers of bad advice.strategy that works. They compete with their
They are paid to sell investment and insurancepersonalities and sales skills. That's why so many
products. They are not paid to help you achieve yourinvestors refer to their advisors as being nice people.
financial goals".They can't believe nice people will take advantage of
Why should advisors be required to document theirthem. They are also convinced their advisors are
credentials?financial experts because the advisors said so - a key
Documentation for credentials, ethics, and businesscomponent of every sales pitch. Unfortunately,
practices is the only way advisors can prove they arepersonalities and sales skills have nothing to do with
the experts they say they are. Plus, documentationadvisor competency and integrity.
reduces your risk of selecting the wrong advisor.Your biggest financial risk
Why do Some Advisors Hide their credentials?It stands to reason bad advisors give bad advice. It
Advisors hide weak credentials for one basic reason -could be deliberate so they can make more money.
exposure will cause them to lose sales. Their strategyOr, it could be inadvertent because they don't have the
is not to provide the information and hope you don'tknowledge to give good advice. Regardless of the
know enough to ask key questions about theirreason, bad advice, in particular in down markets, can
credentials, ethics, and business practices.damage or destroy financial futures.
What hidden credentials?High quality professionals document credentials
Financial advisors have a least 40 characteristics thatHigh quality professionals are proud of their credentials
describe their competency, ethics and businessbecause they have spent years and thousands of
practices. Some of the more important ones are:hours acquiring them. They are willing to document
education, certifications, experience, compliancetheir credentials to reduce your risk of selecting the
records, conflicts of interest, RIA and fiduciarywrong advisor.
statuses, methods of compensation, and wealthWhere can I go to learn how to bad advice and how
management services.to select competent, ethical advisors?