From: 1031 DST Solution
Date: December 20, 2020

DST Advisors – Finding the Right One

Finding the right DST Advisor for your 1031 Exchange can make or break your investments. When it comes to finding the right investments and meeting deadlines to maintain the eligibility of your exchange, it is absolutely crucial to find an advisor that has the drive to get to know you, and provide suitable investment opportunities.

Here are some tips to find an above average advisor:

A Great Advisor Knows You

A great advisor will take the time to get to know you and develop a personal relationship that goes beyond a mutual knowledge of your financial statement. FINRA, the industry’s regulatory advisor, requires advisors to “know their customer,” and for a good reason; a valuable advisor will take the time to understand your past financial situations, as well as your goals and needs for your present and future ones. Additionally, they will have done this before they start presenting investment options, that way they can cater towards your specific needs.

If your advisor candidate does not want to spend the time to understand your goals and situation, this is a red flag. You should not be receiving DST property lists without spending time talking to the advisor beforehand explaining your investment criteria and financial goals. If they only send you property listings straight off the bat without talking to you, then they are likely of the mindset that the sale is more important than you.

A Great Advisor Avoids Conflicts of Interest

Good advisors avoid putting you or themselves in a situation that may present a potential conflict of interest. If your advisor or their company has any affiliation with the investment opportunities they are sending you – such as sharing ownership in it or sponsoring it – you should seriously consider whether or not they have your best interest in mind or their own. Advisors who avoid situations like these tend to maintain integrity in the way they conduct business and will be less biased in the investments they recommend.

If you suspect something like the above hypothetical is occurring, it is perfectly okay to ask your advisor if they or an affiliated company have ownership in, or if they’ve helped create the investment offerings they are sharing with you. This may be a situation of risk, bias, and potential conflict of interest. Even if you’re unsure, it is still worth getting a second opinion on, if not finding a new advisor altogether.

A Great Advisor is Not Promissory

Advisors with integrity and experience will not use promissory language guaranteeing success or certain outcomes with their clients. FINRA states that NASD Rule 2210(d)(1)(A) prohibits promissory language in communications with the public, and NYSE Rule 472(i) specifically prohibits promissory statements. As someone who fully understands market volatility, a good advisor will provide information and guidance based on solid evidence and track records– although even these are not always a guarantee of future performance. They will do what they can with what they know, and not make speculations or implications solely to sway you into a course of action that may better suit their own preferences.

If your advisor is using misleading phrases such as “this choice is sure to provide you __% cash flow,” “you will definitely get ___ and ___ amounts from this investment,” or any kind of exaggerated claims, you should be wary of doing business with them.

A Great Advisor Does Extra Due Diligence

Before investing in a property, it should be fully investigated to understand the risks and benefits associated with that specific property. Many financial advisors that offer DST 1031 properties do limited due diligence. If your advisor solely relies on the sponsor-provided Private Placement Memorandum (PPM), then they are lacking important information about your investment and what’s in it for you.

1031 DST Solution presented by Corcapa 1031 Advisors – DST Advisor for your 1031 Exchange

There are many advisors out there and finding the right one can be tricky. By considering the above recommendations, you can narrow down your options and find the right one for you. If you’d like to speak to an advisor at 1031 DST Solution presented by Corcapa 1031 Advisors, please call (949) 722-1031 or visit https://corcapa.com/corcapa-1031-advisors/.

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  • An accredited investor is an individual with a net worth of at least $1,000,000 (excluding the equity in your home) OR net income the last two years of $200,000 or greater ($300,000 if joint income with spouse) with an expectation of equal or greater earnings in the current year.