An ambitious venture aimed at bringing a unified mass of high-AUM RIAs under one umbrella has hit is initial target of $100 billion of provisionally committed assets. See: Steve Lockshin and Charles Goldman begin to unveil Advizent, a venture that could put thousands of RIAs under a single cooperative.

Advizent, based in Boulder, Colo., has commitments 72 RIA firms ranging in size from $250 million to $16 billion of assets, has secured, since April, de facto handshake agreements that these firms will participate in the co-op — and pay dues — if the organization gets off the ground. Fees will range from $25,000 on the low end to $100,000 on the high end based on firm revenues.

This represents a big leap forward for Advizent as co-founders Charles Goldman and Steve Lockshin begin to get the kind of confidence-inspiring commitments they were looking for before pouring themselves and their personal cash into its build out. See: Why a $2-billion RIA is embracing the idea of a $1 million annual marketing tab, and how Advizent fits in.

“When you’re asked to sign a piece of paper, it’s a real indication of interest,” Goldman says.

For now, Advizent consists mainly of a website that is soliciting, petition-style, signatures from RIAs that want in on the new deal. Word was initially put out about the venture when Goldman and Lockshin traveled to the Barron’s conference in Phoenix in late March to drum up and test interest. See: What went down at Barron’s Top Independent Advisors Summit in the Arizona desert.

One roadblock the Advizent founders have encountered is that firms are withholding their signatures because the exact nature of the standards that Advizent sets has yet to be spelled out. To nail down that standard, the Advizent founders are working with the Certified Financial Planner Board of Standards, fi360 and NAPFA. They’re trying to boil it down to five or 10 criteria — a digestible fiduciary standard — that can be audited by Advizent.

Harold Evensky signed up with Advizent on the strength of his past experience in working with Charles Goldman.
Harold Evensky signed up with Advizent
on the strength of his past
experience in working with Charles Goldman.

Goldman the bottom line

One prominent advisor excited about the new venture is Harold Evensky, principal of Evensky & Katz Wealth Management. The Coral Gables, Fla.- and Lubbock, Texas-based firm manages about $700 million of assets.

Evensky says the decision was not a hard one.

“Bottom line is Charles Goldman,” he says. “We’ll need to see more of the project but in a sense that’s all I need to know. The cost is significant but it could potentially be more than made up for.”

Other prominent advisors that have recently on with Advizent include Jane Williams of Sandhill Global Advisors LLC of Palo Alto, Calif. and Blaine Lourd of Lourd Capital Management, which manages about $650 million of assets from Los Angeles. Williams has a large and successful practice helping wealthy divorced women and Lourd has his fair share of Hollywood stars on his client roster. See: Forget their reputation; rich women are more fearless investors than supposed.

All in

A chorus of this kind of interest is what the Advizent partners wanted before jumping in with both feet.

“We’re putting money behind it and hiring people. It’s green lit,” Lockshin says.

Lockshin will continue to run his $10 billion RIA, Convergent, but for Goldman, it’ll mean a bigger immediate shift. He says he’s “weaning off” his consulting practice and will remain on a couple boards of directors that don’t demand a big time commitment — but that his objectives are clear.

“[Advizent] is my full-time endeavor,” he says. See: Charles Goldman is seeking his game after tumult and a year of decompression.

Cruising Boulder

Goldman is touring Boulder with real estate agents to find a space that Advizent can call home — and says he has made a bid on one space. Goldman has also hired the company’s first employee and others are being interviewed.

The company made an offer to one industry veteran that was declined.

Steve Lockshin: It's green lit.
Steve Lockshin: It’s green lit.

The hiring will address a number of areas that the company needs to build out including: interfacing with the RIA custodians and asset managers, the development of a membership base, customer relation, legal, marketing and branding. Some of the latter efforts are being farmed out to outsourcers.

The initial hires will focus on marketing.

Just scratching the surface

The principals have found that getting advisors to commit is an incredibly time-consuming process because explaining the business model is not simple.

“We had detailed conversations with all [the RIA principals] ...we told them only to sign up if they believe in it,” says Goldman.

As a result, Goldman and Lockshin are outsourcing the initial outreach process to free them up to take on broader enterprise-building efforts.

“We’re getting salespeople to have these earlier conversations,” he says.

Though Goldman and Lockshin have shifted into a higher gear, they are still setting a new target for themselves of 250 firms with a combined $250 billion of managed assets by year’s end. The longer-term goal is 500 to 1,500 firms.

Goldman is optimistic that the next goal can be met.

“We’ve barely scratched the surface of our networks.”