ROSEVILLE, Calif., Feb. 8, 2006 — What do widows and widowers, divorcees, the terminally ill, the disabled, laid-off employees, and pre-retirees taking lump sum distributions from company 401(K) plans have in common? According to Paladin Registry (http://www.paladinregistry.com), they're all extremely vulnerable investors.
"Due to life events, these folks have become responsible for relatively large sums of money," explained Jack Waymire, Paladin Registry founder and author of "Who's Watching Your Money: The 17 Paladin Principles for Selecting a Financial Advisor" (ISBN 0471476994, John Wiley & Sons, 2003). "But most of them have no experience handling that much money, so they hire financial advisors or retirement planners."
And that's where the trouble starts. By seeking the help of retirement planners and financial advisors, contends Waymire, people newly responsible for significant amounts of money are exposing themselves to the single biggest financial risk they'll ever face: bad advice.
"Bad financial advice damages vulnerable investors in rising markets when they make less than they should and in falling markets when they lose more than they should," said Waymire. "Bad financial advice also exposes these investors to excessive risks and expenses that put their financial futures at risk."
It may take years for less sophisticated investors to realize their friendly retirement planners are undermining their financial goals with bad investment advice. And retirees may not experience the consequences of bad financial advice until late in life, when they're least able to recover. So how can vulnerable investors protect themselves from the risk of bad investment advice?
The simple answer, according to Waymire, is to work with competent, trustworthy retirement planners or financial advisors. The hard part is finding that type of advisor and making sure he or she has the knowledge and ethics necessary to really help investors.
Unfortunately, investors may not know the right questions to ask financial planners, and they may not know good answers from bad ones. In fact, many investors simply listen to sales pitches and pick the financial advisor who sounds the best.
"To protect themselves from financial risk, investors must first know the risk exists. Then they need to ask questions about the financial advisor's competence, ethics and business practices – for example, education, experience, certifications, compliance record, method of compensation and conflicts of interest," stated Waymire. "The last step is critical. Ask for the information in writing. Bad retirement planners and financial advisors don't like written information because it creates liability for them."
About Paladin Registry, LLC
Paladin provides free 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 retirement planners. 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