Investors Deserve Full Transparency from Financial Advisors
Investors Deserve Full Transparency from Financial Advisors
Most investors select financial planners and financial advisors based on sales pitches, personalities, brand names, and verbal claims for their expertise, ethics, and results. Very few investors require background checks, but they should for the following reasons:
Advisors do not have track records that document their results
Advisors do not have mandatory disclosure requirements
There are no minimum education or experience requirements to be an advisor
Advisors omit information that damages sales results
Advisors misrepresent information so they sound like financial experts
Determining the quality of advisors is complex and time consuming
Selecting the wrong advisor is a major source of risk for investors
Very few advisors practice full disclosure because they don't have to. Wall Street spends hundreds of millions of dollars per year on lobbyists who fight disclosures that damage company revenues and profits. For example, companies hire thousands of new advisors every year. They want them producing revenue as soon as possible. They also employ thousands of advisors who have histories of investor complaints. Investors would not buy from these advisors if they had easy access to this information.
Higher quality advisors, who practice full transparency, provide investors with the information they need to make objective decisions when they select financial professionals. They volunteer information so investors do not have to ask the right questions. They provide documentation for the information so investors have a permanent record. And, they use the services of independent third parties to conduct background checks that validate the accuracy of their information.
Advisors provide four types of information when they practice full transparency:
Competence: Education, experience, certifications, designations, association memberships
Ethics: Compliance record, licenses, registrations, fiduciary status
Business Practices: Fees, compensation, accessibility, reporting
Financial Services: Planning, investment, wealth management, tax
Advisors who are inexperienced or ethically challenged cannot afford to practice full transparency. Investors would use the information to reject them. The financial service industry's solution is to hide information and hope investors do not ask the right questions, require documentation for advisor responses, or use third parties to conduct background checks. Consequently, transparency is a differentiating characteristic for advisors. Investors should select advisors who provide full disclosure with background checks and avoid advisors who do not.
About Paladin Registry
Paladin was established in 2003 to provide information services to investors who use the services of financial planners, advisors, consultants, and money managers. Registry services include background checks, quality ratings, online documentation, and a match service that connects investors to local planners and advisors who achieved Paladin's five star quality rating. Learn more by visiting www.PaladinRegistry.com.
http://www.articlesbase.com/investing-articles/investors-deserve-full-transparency-from-financial-advisors-2632796.html
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