By: Jack WaymirecloseAuthor: Jack Waymire Name: Jack Waymire
Email: jack@InvestorWatchdog.com
Site: http://www.investorwatchdog.com
About: Jack entered the financial services industry as an institutional consultant and later as vice president at Warburg, Paribas, Becker in 1976. From 1983 to 2003 he was the President of Lexington Capital Management and related companies. In December, 2003 John Wiley published his book "Who's Watching Your Money? The 17 Paladin Principles for Selecting a Financial Advisor". In 2004, he founded PaladinRegistry.com, a website that educated investors about financial advisors. A national Registry of pre-screened, five star rated advisors was added to the website later in 2004. In 2009, he founded InvestorWatchdog.com, a website that provides tools and information to investors who use the services of financial planners and financial advisors. Since 2004, Jack has been frequently quoted in the media on topics about financial advisors, Wall Street firms, investment scams, and the financial services industry (BusinessWeek, Forbes, Kiplinger, Washington Post, etc.).See Authors Posts (66) | January 26, 2012 | Investor Information

In a recent study conducted by PaladinRegistry.com and ByAllAccounts.com, a disturbingly high percentage of investors said they relied on financial advisor references to validate their ethics and performance.

This is disturbing at two levels. No advisor will deliberately give a prospective client a bad reference. In fact, references are carefully chosen to make sure they only make positive statements about the advisor.

The next level is even more disturbing. Unethical advisors may use friends, not clients, as references. Or, advisors act as references for other professionals in return for positive comments about themselves. None of this is disclosed to investors.

References are too easy to manipulate and are subjective (think Bernie Madoff). Investors need a new objective way to evaluate ethics and performance.