ROSEVILLE, Calif., June 13, 2006 — Paladin Registry, LLC (http://www.paladinregistry.com) released the results of a new study of more than 10,000 investors who used its services. The study showed 86 percent of investors don't know how to determine the quality of financial advisors before they select them. Instead, they based their selection decisions on the personalities and sales presentations of the advisors. Consequently, most investors hired the wrong professionals for the wrong reasons and fired them a few years later when they realized their mistake.
Jack Waymire, Paladin founder and author of Who's Watching Your Money? The 17 Paladin Principles for Selecting a Financial Advisor (ISBN 0471476994, John Wiley & Sons, 2003), said, "One of the biggest problems we uncovered was investors don't know the critical differences between financial planners and financial advisors. For example, planners provide services that help investors build strategic roadmaps for their financial futures: the amount of assets they need for retirement, sources of retirement income, and the impact of longevity. The planning process should produce a comprehensive strategy that increases the odds of investors achieving their most important financial goals."
Waymire went on to say, "The primary role of financial advisors is to help people invest assets. Their services include investment strategy, asset allocation, manager selection, risk management, investment decision-making, and performance analysis. The primary benefit of the advisory process should be improved asset performance for lower overall risk or why hire a professional."
Waymire added, "As you can see, the roles of planners and advisors are very different and, if professionals are going to provide quality services, they must have substantial amounts of specialized knowledge." So how does this lack of investor knowledge create a major risk? Waymire said, "Most people need both services and they want the convenience of one advisor. However, very few professionals have both types of expertise so investors end up with bad financial plans, bad investment advice, or both."
Waymire explained, "Most financial professionals say they provide both services because they can make more money. For example, everyone needs a financial plan, but it's tough for advisors to make a lot of money when planning is their only service. Plus, investors are willing to pay more for investment services because good advice makes them money. The result is a high percentage of professionals offer both services whether they have the expertise or not. They misrepresent their knowledge and the quality of their services to make more money."
Investors must learn to obtain objective information from advisors that will help them determine competency, ethics, and business practices. Then they can compare professionals to each other and make quality decisions. There is a website that provides this information for free and investors don't have to register to access it. The URL for the site is http://www.paladinregistry.com, then click on Tips-4-Investors to access more than 40 topics about planners, advisors, and their companies.
About Paladin Registry, LLC
The Paladin website, http://www.paladinregistry.com, provides free public services to investors who use the services of financial planners and advisors. Its Tips-4-Investors is an educational resource that helps them avoid the risks and consequences of bad financial advice and helps them select high-quality professionals. The Registry's two consultant-driven search processes help investors find competent, trustworthy planners and advisors in their communities. And, it's profiling service documents advisor answers to many of the most important questions that investors should be asking advisors before they hire them.
Paladin Contact:
Jack Waymire
Paladin Registry, LLC
877-719-2022
Email
http://www.paladinregistry.com