If theres one message Jack Waymire wants to send to advisors, it would be that you're being watched.
The founder of Paladin Research and Registry, an independent information services company, announced Tuesday the launch of online tools and guides that will give investors access to pre-screened information about advisors nationally.
"The bottom-line is to protect investors from advisors who may not have their best interest, says Waymire, who is also the author of the book "Whos Watching your Money?", written as a response to the 2002 dot-com bubble. Were providing them the process to find out about the advisors theyre thinking of hiring with a focus on certification, ethics, business practices, and services provided.
Paladins registry provides different tools and resources to investors, from an "Advisor Scorecard" that produces a quality rating for each professional, to "Check a Credential" service investors can use to identify fake credentials.
Theres also a questionnaire investors can send their advisors in case they arent sure of what questions to ask. Responses are then uploaded into the Advisor Scorecard, which gets moderated by an algorithm that eventually calculates an overall rating (Eg. 20 years of experience scores more than 2 years of experience).
The push for transparency seems to have aided many investors. In fact, up to 240 fake certifications have been exposed, according to Waymire.
The good guys will have absolutely no problem with this process, while the bad guys will hate it, he says. In the end, the investors win.
While Paladin seems to benefit investors, advisors also share much of the pie.
Originally, Waymire developed Paladin as a means to match advisors with investors, but investors would only have access to those in the firms registry. With the launch of the website and its tools last month, the registry is now open to any advisor who is willing to be screened.
A lot of visibility for advisors is through word of mouth, says Waymire. With the registry, we give them a unique URL that they can integrate to their marketing.
Even so, some advisors prefer to keep to themselves for varying reasons. Some may be concerned by making their track record so transparent, while others dont see the immediate appeal.
I dont know if its very helpful, because we advisors mostly get our clients through referrals, says Claire Friedrichs, first vice president of investments at Raymond James. Advisors clients tend to look very much like the advisor they have the same likes and dislikes. When investors ask their friends about advisors, performance isnt always the main concern. Its more about trust and being able to communicate and connect.
But whether investors go through Paladins registry or referrals, the buzz on the street seems to be this: The more transparent and trustworthy an advisor, the more likely they are to be hired, says Waymire.
For now, investors can access Paladins tools for free, but users may be charged a nominal fee in the future. The rationale, according to Waymire, is that by having users pay a nominal fee, the potential notion of Paladin being paid by the ads they feature is alleviated.
If its free, how good can it really be? he adds. Theres no such thing as a free lunch.
