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The Honolulu Advertiser

Posted on: Thursday, May 26, 2005

Financial adviser registry good place to find qualified professionals

By Michelle Singletary

I'm sure I don't have to tell you that the financial road we all have to travel these days is bumpy and full of potholes. There's just so much to deal with.

For those of us who need help with our money, it may be worth paying to have a financial adviser pave the way for a headache-free ride.

But where should you begin your search?

I hate to tell you this but anybody can play a planner.

"Financial planners" are not regulated by uniform state or federal laws. Thus their qualifications and business practices can vary considerably.

And to complicate matters, the industry has any number of confusing credentials, and each professional organization that bestows those titles says their badge is best.

But is it best to hire a certified financial planner (CFP)? Is a chartered financial consultant (ChFC) good enough? Can you be well served by a personal financial specialist (PFS), certified investment management analyst (CIMA) or a chartered financial analyst (CFA)?

You won't really know how good the person is until after you've made or lost money.

To take some of the guesswork out of choosing a financial adviser, Jack Waymire, author of "Who's Watching Your Money? The 17 Paladin Principles for Selecting a Financial Advisor" has created an online service, the Paladin Registry (www.paladinregistry.com).

Planners who want to be selected for the registry have to answer more than 140 questions, Waymire said.

For example, they have to disclose any history of investor lawsuits or compliance problems. The service does not do extensive background checks but when planners disclose such information, the complaints against them are investigated, Waymire said.

Based on the information the financial planners supply, such as work experience, education and credentials, planners are rated on a five-star scale. Only professionals with three, four or five stars are admitted to the registry.

The registry contains detailed profiles and disclosure statements for 450 financial professionals. Forty-two percent of the advisers have advanced degrees, and more than 80 percent have multiple certifications, the most common being a CFP.

For their part, the financial professionals listed in the registry agree to fee-only compensation from client matches received from the service. The fee can be either an hourly rate, a fixed fee or a fee based on assets under management.

"I really commiserate for people looking for a planner," said Howard S. Gartenhaus, a financial adviser based in Rockville, Md., who earned a five-star rating from Paladin. "In many cases you are entrusting your life nest egg to somebody you really don't know. So any method to make that an easier process has got to be good for the consumers."

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Tips on choosing a financial planner

• If an adviser claims to have a certain credential, check it out. For example, if they say they are a CFP, check with the Certified Financial Planner Board of Standards Inc. at www.cfpboard.org or call toll-free at (888) 237-6275. Find out if there has been any disciplinary action against the planner.

• Make sure the adviser is properly registered. So many investors could be spared the heartache if they would do this one thing. The SEC can help you check out brokers and advisers. Go to www.sec.gov/investor/brokers.htm. Find registration and other background information on investment professionals and firms by checking with NASD at www.nasd.com or call (800) 289-9999. The North American Securities Administrators Association can give you the telephone number of your state securities agency. Go to its Web site at www.nasaa.org and click on the link for "Contact Your Regulator."