| There's an old saying in the financial service industry | | | | financial advisor should help you to make rational |
| that financial advisors and financial planners earn their | | | | decisions and avoid emotional decisions that will reduce |
| money in down markets when their clients' natural | | | | your future results. |
| tendencies are to make emotional decisions that | | | | Waymire added, "You should also expect your |
| damage their financial futures. | | | | financial advisor or financial planner to keep you fully |
| Jack Waymire, co-founder of the Paladin Registry | | | | informed about the performance of your assets and |
| which helps investors identify financial advisorsand | | | | your exposure to additional down-market risk. The |
| financial planners and author of "Who's Watching Your | | | | more you know about what's happening to your |
| Money?" (ISBN 0471476994, John Wiley & Sons, | | | | assets and why, the more comfortable you are going |
| 2003), said, "This saying is absolutely correct if the | | | | to feel. And, we know from investor surveys that |
| professional you are depending on is a real financial | | | | there is a substantial increase in fear when investors |
| advisor. Too many so-called advisors are really sales | | | | are not kept fully informed by readily accessible |
| representatives who are paid commissions to sell you | | | | advisors." |
| products. Since they aren't paid a fee to help you | | | | Waymire also said, "You should expect your financial |
| achieve your goals, they disappear during down | | | | advisor or financial planner to be recommending |
| markets and reappear when conditions have | | | | adjustments to your portfolio. For example, there may |
| improved." | | | | be securities you've wanted to sell, but held back due |
| Waymire observed, "Real financial advisors and | | | | to tax consequences. Or, there are investments |
| financial planners should be educating you about down | | | | you've wanted to buy, but their prices were too high. |
| markets that occur every few years when excesses | | | | You may also have existing positions you have |
| negatively impact the economy and company | | | | wanted to add to when prices were lower. A quality |
| earnings. In the current case, the banking and | | | | advisor will help you benefit from down markets by |
| mortgage industries combined to write an estimated | | | | positioning your assets for future appreciation." |
| trillion dollars of bad loans that Wall Street converted | | | | About Paladin Registry |
| into securities called Collateralized Debt Obligations. We | | | | Founded in 2003, Paladin is an information services |
| will be in a down market until this excess has worked | | | | company that provides free public services to |
| its way through the economy and markets." | | | | consumers who use the services of financial advisors |
| You should also expect your financial advisor to inject | | | | and financial planners. The Registry educates |
| some discipline into your investment process to help | | | | consumers about financial professionals and provides |
| you minimize the impact of emotional decision-making. | | | | ratings and documentation for criteria that impact their |
| When investors turn fearful, their natural reaction is to | | | | competence and ethics. |
| start selling investments that are declining in value. Your | | | | |