ROSEVILLE, Calif., Jan. 18, 2006 — Most investors believe the biggest risk to their financial goals is the stock market's volatility and uncertainty. But that's only half right: According to the Paladin Registry (http://www.paladinregistry.com), the number-one risk to millions of investors is bad investment advice.
Financial advisors doling out bad advice impact investors four ways, warned the company. Investors receiving bad financial advice make less money than they should in rising markets and lose more money than they should in falling markets. They are exposed to excess risk for any performance their portfolios do achieve, and they pay excessive costs, reducing net returns. Bad investment advice earns its number-one ranking from Paladin Registry because it reduces performance in up and down markets.
Jack Waymire, founder of the Paladin Registry and author of "Who's Watching Your Money: The 17 Paladin Principles for Selecting a Financial Advisor" (ISBN 0471476994, John Wiley & Sons, 2003), explained that bad investment advice is also the number-one risk to investors because the advisors who provide it influence or control the planning and investment decisions of millions of Americans.
"Financial planners are entrusted with helping investors achieve their financial goals. However, that trust is often abused to maximize the advisors' incomes," Waymire explained. "Bad investment advice impacts performance, but it has an even bigger impact on the achievement of life goals, in particular long-term goals like secure, comfortable retirements. Will investors be able to retire when they want to and live how they want to? Will they have to take part-time jobs to make ends meet? Will they have to reduce their standards of living to make their assets last longer? The answers to these questions are impacted by the quality of financial advice investors receive from advisors."
Waymire went on to say that, "unlike the ups and downs of the stock market, the risk of bad investment advice is hidden from investors. Financial advisors can claim to be planning and advising experts, but they are not required to provide documentation supporting their claims. There are no education or experience requirements to be financial advisors, and they can use any title they want – financial planner, financial advisor, financial consultant – regardless of whether they have the requisite knowledge. Without adequate disclosure, investors are prone to select financial advisors for their personalities and sales skills, instead of for their competency and integrity. Bad financial advice is not only an investor's number-one risk, it is a pervasive problem in America today."
About Paladin Registry
Paladin provides free investor education to investors who rely on financial planners and advisors to achieve their financial goals. The company's Web site, http://www.paladinregistry.com, also matches investors to pre-screened, five-star investment professionals and documents answers to questions investors should be asking their financial advisors. Paladin also supports the Alliance Partners Program, which is used by corporations, associations and nonprofits to educate their employees and members on advisor-related issues.
Contact:
Jack Waymire
Paladin Registry, LLC
916-780-8737
Email
http://www.paladinregistry.com