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Value of an Independent Advisor


The importance of an independent financial advisor is captured in the Government Finance Officers Association Recommended Practice:

Issuers [borrowers] must keep in mind that the roles of the underwriter and the financial advisor are separate, adversarial roles and cannot be provided by the same party. Underwriters do not have a fiduciary responsibility to the issuer [borrower]. A financial advisor represents only the issuer [borrower] and has a fiduciary responsibility to the issuer [borrower].

The Government Finance Officers Association (GFOA) recommends that unless the Issuer [borrower] has sufficient in-house expertise and access to market information, it should hire an outside financial advisor prior to undertaking a negotiated debt financing. The financial advisor can lend objective knowledge and expertise in the selection of underwriters for negotiated sales.

  -  Government Finance Officers Association Recommended Practices
      [emphasis and parentheses added]


Choose an Advisor Who is Truly Independent

Unlike banks or underwriters, Providence Financial exclusively represents our clients' interests without an allegiance to investors or any money source. We are completely independent of underwriters and lenders and do not have exclusive relationships. As members of the National Association of Independent Public Financial Advisors, Providence Financial adheres to the highest ethical and professional standards.

Before hiring a financial advisor, borrowers should ensure that an advisor is truly independent of an underwriter. Some underwriters and financial advisors have exclusive relationships with each other and recommend each other on every financing transaction. Beware of the "package deal." Such a financial advisor can hardly be independent of that underwriter. We recommend that borrowers select an advisor who will work solely on their behalf without a conflicting allegiance to an underwriter.





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