Money is Slippery



First step of investing? Select a qualified adviser

By Dave Young

Money is slippery. It is difficult to build wealth and even more difficult to keep it. The stock market is up 50 percent from the lows it hit earlier this year. If you are serious about your investments, it is time to evaluate your investment adviser and review your strategy.

Most people have little experience when it comes to investing large ($200,000-plus) amounts of money. In some cases, the money is a lump sum payment from their 401(k) when they retire. In others, it’s the proceeds from a life insurance settlement or an inheritance.

Either way, the money shows up in a big block. This creates a difficult situation most individuals have never dealt with. For better or worse, the decisions they make with these new funds will have a significant impact on their future quality of life.

Another group with investable assets is successful individuals that are able to put away significant savings from their business. They are successful because they focus on their business, which is the highest and best use of their time. Because their business takes up all of their energy and effort, they don’t usually have the time or expertise to invest effectively. However, in the final analysis, it is their investment decisions that will determine whether or not the hard work was worth it.

Investing properly is not an issue of intelligence. Lots of smart people lose lots of money. The issue is whether or not you have the time, resources and expertise to effectively compete in a highly competitive investment world. It’s about being disciplined and following a process that removes emotion from your investment decisions.

Selecting a financial adviser is an obvious “first step” for anyone who has acquired significant assets. The complicating factor is that all financial advisers are not the same. This article will highlight the qualifications that any serious investor should demand from their financial adviser.



Fiduciary advisers have a legal obligation to put your interests ahead of their own. This means if your adviser does not act in your best interest, you have the right to take legal action. Most investors mistakenly believe that all advisers are fiduciaries. Unfortunately, only about 15 percent of advisers actually are. Sales reps selling insurance, mutual funds or other financial products are most likely NOT FIDUCIARIES. Registered Investment Advisers and their representatives ARE FIDUCIARIES. Only working with fiduciaries will narrow your search considerably and get you pointed in the right direction.



Look for financial advisers or money managers that have at least 10 years of experience. Markets change constantly and are notoriously difficult to navigate. Ideally, your financial adviser should have experience investing in both good markets and bad markets. In the final analysis, you are paying an adviser for their experience.


Track Record?

Legitimate advisers will be able to show you a clear report of what they’ve done for their clients over the years. Showing you the track record of a mutual fund, a hypothetical model, or anything else they have recently started selling does not count. They need to show you their own track record, which would be a composite of the results of their previous clients’ investments. Any adviser who refuses to show you at least a five-year track record of their personal performance must be crossed off your list.


Conflict of Interest?

Many commission-based salespeople are honest individuals. However, in the financial services industry, the worse the product, the higher the commission. The easiest way to avoid those “bad products” and to eliminate potential conflicts of interest is to avoid salespeople who receive commissions. By working only with advisers who are paid through management fees and not commissions, you can make sure their interests are aligned with yours. Never buy a product with a surrender charge.


Following these simple steps will put your investment strategy on a firm foundation. If you would like a more in-depth discussion of how to select a financial adviser, simply go to and download the complimentary report. UV


The views in this column are the opinions of Dave Young. They are not intended as a forecast or a guarantee of future results.

About the Author

After graduating from BYU, Dave Young started his career as an entrepreneur. He successfully started 12 businesses in the early 1980s. In 1986, he decided to sell his businesses and invest the proceeds, but he was unable to find an investment company that met his needs. As a result, later that year he began managing his own portfolios.

Dave continued researching methods for investing that would produce the most profitable returns. He believed in his methods so much that he invested his life savings and started Paragon. More than 20 years later, Dave continues to invest and research ways he can improve his business to serve clients. He has been interviewed by BusinessWeek, CNBC, the Wall Street Journal, the Deseret Morning News and other national and local media. Paragon also received the Best of State Award in Financial Services for 2008. Visit or call (801) 375-2500 to learn more.

Need a hand?

During this unpredictable financial market, Paragon Wealth Management is offering a free analysis and review of your portfolio. If you have $200,000 or more in your account, Paragon has the know-how to bring confidence and predictability back into your investments. For more information, check out Paragon’s Web site at



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