SACRAMENTO, Calif., July 7, 2010 — Consumers say "show me the Carfax®" before they buy used automobiles. They want to make sure the cars have not been in accidents or experienced excessive repairs. These same consumers will turn around and invest their life savings with financial advisors and not require any documentation or background checks. It is no wonder consumers lose billions of dollars per year when they select one of the five types of advisors who represent the greatest risk to their future financial security:
- Personable advisors who use sophisticated sales pitches
- Advisors who omit, misrepresent, or exaggerate information
- Advisors who put their financial interests ahead of consumers
- Unlicensed advisors who sell unregistered products (scams)
- Licensed advisors who sell illegal products (Madoff)
Why is there such a disparity in the ways consumers buy cars and how they select financial advisors? Jack Waymire, founder of Paladin Registry and author of Who's Watching Your Money? The 17 Paladin Principles for Selecting a Financial Advisor (ISBN 0471476994), thinks he knows the answer. "Most consumers are comfortable determining the quality of cars. However, they are very uncomfortable determining the quality of advisors so they base their selections on criteria they understand: free lunches, references, advisor personalities, sales pitches, and brand names. Unfortunately, this is like buying cars that have ok paint. What consumers don't see is what creates the greatest risk."
According to Waymire, "Very few investors know what they are up against when they select financial advisors. The Wall Street marketing machine has had decades to refine its sales tactics. Bernie Madoff used affinity marketing schemes and referral networks. Friendly main street advisors are adept at telling investors what they want to hear. The bottom-line is determining the quality of financial advisors is complex and time-consuming."
There is an easy two-part solution. First, consumers must start demanding documentation from advisors that matters: credentials, ethics, business practices, expenses, compensation, and services. Advisors who refuse to provide documentation are automatically excluded from selection processes. Second, use a background check to validate the completeness and accuracy of the advisors' documentation. Consumers can validate the information themselves or use a recently announced Paladin Registry service that conducts background checks for them.
This two-part process provides the information that consumers need to identify and select competent, ethical advisors who can help them achieve their financial goals. They will not receive this information if advisor sales pitches are their only source of data. Consumers do not buy cars this way and they should apply the same principles to selecting financial advisors.
ABOUT PALADIN REGISTRY
Paladin began providing information services to investors who use the services of financial planners and financial advisors in 2003. The services include Background Checks, Quality Ratings, Online Documentation, and a service that matches investors to pre-screened financial professionals in their communities. Visit Paladin's website (http://www.PaladinRegistry.com) for additional information.
KEY CONTACT:
Jack Waymire
Founder & Author
Email
(916) 253-3334 (CA)
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