Paladin Transparency Index measures amount of information advisors provide to help consumers with selection decisions.
SACRAMENTO, Calif., Aug. 12, 2014 /PRNewswire/ — Paladin (www.PaladinRegistry.com) announced the publication of research reports for more than 20 financial advisory firms that provide advice and services over the Internet. These online advisory firms want to change the way consumers buy financial services the same way Amazon changed the way people buy books. Paladin's research reports provide the information consumers need to make the right decisions when they select these firms.
Jack Waymire, Paladin's founder, said: "These advisory firms are relatively new and there is a lot of confusion. In fact, most people can't even agree on a name for them. One of the most popular names is Robo Advisors. However, robotic is not a good description for these firms. Their automated investment processes were programmed by humans and most of them have added human contact by email, telephone, or Skype."
Regardless of names, what these firms have in common is the utilization of the Internet to deliver financial advice and services to consumers. Some firms use automated investment processes that minimize the involvement of expensive investment professionals. Other firms provide traditional planning and investment services with limited contact.
Most of the online firms have very limited marketing which is a major positive for consumers who are tired of frequent solicitation by Wall Street salesmen. All of the information consumers are supposed to need to make a selection decision is published on the firms' websites. But, is it? Paladin's research found a lot of information that discloses the weaknesses of these service providers is withheld from consumers.
Waymire said: "Our solution was to develop a Paladin Transparency Index (PTI) that is displayed on the advisory firms' research reports. The PTI measures the amount of information that advisory firms provide consumers that will help them make the right selection decisions. Firms that withhold information have low scores (less than 3.0). Firms that provide complete, accurate information have higher scores (3.5 to 5.0). Consumers should be more comfortable selecting online advisory firms that have high PTI scores. At a minimum, they have some assurance that the firm is practicing a level of disclosure that protects consumer interests.
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