Re: Follow the Money
Watchdog
1/13/2012 6:13:35 PM
Not trying to be cute here. I know it is easy to develop personal relationships with financial planners and investment advisors. Their advice and services are tied to investors' highly personal goals, concerns, and fears.
However, advisors are the real beneficiaries of the personal relationships. They get hired for the wrong reasons and investors are reluctant to terminate people they like.
Don't think for a minute that advisors don't know this.
Dogs can be safer relationships compared to some financial advisors who belong in the ocean with the other sharks.
"If they want friends they should buy dogs from a reliable source."
Ha!
Re: Follow the Money
Watchdog
1/13/2012 11:31:23 AM
Unfortunately, the relationship most investors have with advisors is dominated by advisors. The favorite tactic of advisors is to use sales skills to convince investors they are financial experts because they know people do not question the advice of "experts". Transparency does not come up if investors believe they are talking to experts.
Also, advisors want investors to like them because they know people trust people they like. Once trust is established, especially by a self-purported expert, investors will buy whatever the advisor is selling. People call their advisors friends. Advisors call it relationship management.
Remember, one of the most frequent laments of Bernie Madoff victims was "I thought he was my friend". Investors need to learn this is a business relationship. If they want friends they should buy dogs from a reliable source.
Great stuff, Thanks Jack.
Re: Follow the Money
Broadway
1/12/2012 10:30:38 PM
Watchdog, thanks for those site recommendations. Great stuff! With Watchdog and Paladin Registry, you would think that the advisers that share their data and show transparency would get rewarded for it with increased business, or at least increased prospects. Or hopefully as more and more investors expect and demand transparency, it'll trend that way...
Re: Follow the Money
Watchdog
1/12/2012 2:01:56 PM
www.PaladinRegistry.com, an Investor Watchdog affiliate, has provided a list of pre-screened, documented advisors since 2004.
InvestorWatchdog.com is launching a new site that contains a Directory of documented planners and advisors in February.
There are other websites on the the Internet that purport to link investors to pre-screened advisors. However, what they really doing is selling investor leads to the financial advisors who are willing to pay for them.
A relatively new service, Brightscope, screen scrapes data from the FINRA site and publishes it on their site. They are promoting increased transparency for financial advisors. This site provides data for hundreds of thousands of advisors.
Watchdog and Paladin Registry are focused on delivering the data investors need to make informed decisions when they select financial advisors. However, advisors have to voluntarily submit their data because the industry does not have mandatory disclosure requirements except the information that resides on the FINRA.org website.
Re: Re : Scary Truths About Financial Advisers
Watchdog
1/12/2012 1:28:26 PM
Rating the quality of financial advisors is problematic for three reasons.
First, they do not publish track records. If they did there would be Morningstar ratings for financial advisors.
Second, Wall Street creates major barriers in regard to full disclosure for advisor backgrounds and business practices. In the absence of mandated disclosure, the only source of information is the advisor.
Third, advisors use personalities and sales skills to obscure facts about themselves: lack of experience, compliance problems, etc.
When advisors have mandatory disclosure requirements and audited track records we can begin rating their actual quality.
Don't hold your breath. Wall Street interests spend millions of dollars per year fighting disclosure. They do not want investors to have this information.
Re: Follow the Money
Watchdog
1/12/2012 1:21:10 PM
I think you are crossing trust with performance.
An advisor I can trust always tells me the truth.
An advisor I can trust always puts my interests first.
a trustworthy advisor may or may not deliver competitive investment returns. Now you are in the realm of competence versus ethics.
a trustworthy advisor may also be an incompetent advisor due to lack of experience, training, certifications, etc.
Re: Re : Scary Truths About Financial Advisers
Broadway
1/11/2012 5:32:31 PM
You would think somebody already thought of this idea for rating financial advisors, like Angie's List even. I'll do a search and let you guys know what I find ... but it seems like such a no-brainer that somebody should have made money off the idea already.
Jacob, the whole point of Jack's post is that the perception of financial advisers is not what it seems -- and that investors should be cautious.
The blogs and comments posted on Investor Uprising do not reflect the views of Investor Uprising, PRNewswire, or its sponsors. Investor Uprising, PRNewswire, and its sponsors do not assume responsibility for any comments, claims, or opinions made by authors and bloggers. They are no substitute for your own research and should not be relied upon for trading or any other purpose.
|
 |
Latest Blogs
Telecom-equipment maker Ciena is a stock trader’s dream, as long as the timing is correct.
The FTC is offering a $50,000 cash prize to the person or group that can come up with a solution to those annoying robocalls.
Akamai is in the middle of four significant tech trends.
John Malone of Liberty Media will be taking over Sirius XM satellite radio when the existing CEO Mel Karmazin steps down. What's it mean?
Demand for students of the humanities exists, despite widespread aspersions on the discipline.
IU Education
Resources to help you become a better investor
Investor Uprising on Twitter
25 market-moving companies we're tracking
|
Tweet This