SACRAMENTO, Calif., Sept. 25, 2007 — In a recent study that included more than 4,000 consumers Paladin Registry, a free public service provider for consumers who rely on professionals to achieve their financial goals, found that determining the trustworthiness of financial advisors and financial planners was the single biggest challenge facing 78.3% of consumers when they selected professionals to help them achieve their financial goals.
Jack Waymire, co-founder of the Registry and author of "Who's Watching Your Money?" (ISBN 0471476994, John Wiley & Sons, 2003), said, "The results of the study shouldn't be a big surprise. All financial advisors and financial planners claim to be competent, ethical professionals because it helps them sell their products and services. The challenge for consumers is to determine who is telling the truth about their ethics when they make this claim. Unfortunately, there is no easy way for them to obtain the information they need to make this determination."
Waymire went on to say, "Advisor ethics is a very complex topic. Even if consumers check their compliance records on the National Association of Securities Dealers website (http://www.nasd.org) they don't really know if financial advisors and financial planners are the honest, dependable professionals they say they are. For example, compliance records don't tell them advisors are selling the products that make them the most money. The records don't tell them advisors are withholding information about their lack of experience and other credentials. And, the NASD records don't tell consumers about potential conflicts of interest that could damage their financial futures."
It's up to consumers to determine the trustworthiness of financial advisors and financial planners before they hire them or buy their products. In most cases they accept the verbal representations of the professionals and they don't check their compliance records. These are big mistakes because verbal representations are also called sales pitches. Financial advisors and financial planners will always make positive comments about their competence and ethics to win relationships and sell products.
Waymire did offer a solution. Consumers can require advisors to provide them with a written Code of Ethics that describes the ethical principles that they agree to adhere to. Waymire said, "This type of documentation is the information consumers need to determine if advisors are really the ethical professionals they say they are. And, if something does go wrong, consumers have a written document that describes what the professionals told them to win their trust and control of their assets."
About Paladin Registry Inc.
Founded in 2003, Paladin Registry is an information services company that provides four free public services to consumers who use the services of financial advisors and financial planners: Consumer Awareness & Education Programs, Advisor Search Services, Advisor Documentation Services, and Advisor Rating Services. One free public service is a comprehensive Code of Ethics that protects the financial interests of consumers. For more information, visit the Registry at http://www.paladinregistry.com.
Media Contact:
Jack Waymire
Paladin Registry Inc.
916.253.3334
Email