How one firm is supposedly cracking the lead generation code to the tune of 50,000 advisors supplied -- by, for now, not trying to create referrals

Investor Watchdog, FreeRetirementReport and Vestorly are among the firms seeing growth but are grappling with vetting issues -- of both advisors and clients

Wednesday 6.20.12 by Kelly O'Mara

Brooke’s Note: Talk about the ability of capitalism and technology teaming up to invent multiple new ways of solving old problems — like getting business-starved advisors together with the assets of guidance-starved investors. Here are four companies with four very different approaches to the problem — with little use for each other. We start with the one most conducive to the telling of a story — complete with big numbers and overwhelmed servers.

Just three years into its existence, My New Financial Advisor has become a massive lead-generating machine for advisors the likes of which may never have been seen before: The Mentecito, Calif.-based firm, founded by a financial advisor, is cranking out so many leads from investors who want help with their finances that the 50,000 advisors currently on the service can’t process the load. See: Fidelity launches gigantic referral database to give advisors a shortcut to wealthy prospects.

“There’s exceptional demand. We just don’t have enough advisors on the platform,” says Frank Troise, CEO and founder.

He may not even have enough platform: After a CNBC appearance by Troise, interest ran so high that it overwhelmed his servers temporarily — forcing him to cancel other appearances on MSNBC and NBC’s “Today” show.

To keep the supply of advisors high, My New Financial Advisor has signed on advisors from nine out of the top 10 platforms including: LPL Financial, Mercer Advisors, and Personal Capital.

With this approach coming up short, Troise hopes to finally bridge the supply-demand gap by having one of these national platforms purchase his leads. He says that deals are in the works but declined to specify which firms he is in negotiation with. See: Advisor spotlight: TD Ameritrade referrals help turn quiet advisory into a fast-growth operation.

Client portal

With advisors perennially parched for leads, how is it that Troise’s firm is drowning in them? The answer starts with the fact that it was able to think foremost like a consumer-facing company — like a

In the case of My New Financial Advisor, the trick is to draw in consumers via its website, which offers an online manual on how to effectively plan for retirement, and then turns the data over to advisors to convert to clients.

Such potential clients, mostly struggling baby boomers, spend about five minutes on filling out 18 questions. They then receive an 18- to 19-page FINRA-compliant report prepared by a professional using eMoney that analyzes their retirement finances. See: RIAs grapple with a rising threat to retirement: Adult kids that move back in with mom and dad.

“It’s the exact report a user would pay $3,000 to $5,000 for if they went to a planner,” says Troise. See: Advisor Tested: eMoney’s automation adds the biggest benefit; account aggregation still building.

A big difference is that at the end of their questionnaire, users are asked if they’d like a free 30-minute consultation with an advisor. Tens of thousands of people say “yes.”

Those yeses are handed over to advisors who have signed up with My New Financial Advisor. They can either sign up to receive leads at $100 per lead based on their zip code, bid on gaining access to prospective clients who called a phone number displayed on the banner ad on the retirement report or pay a monthly $100 fee to lease the reporting engine themselves and run their own reports connected to a customized URL.

“At that point, it’s up to the advisor,” says Troise. “We’re nothing more than a mass-affluent lead generator.”


But some are skeptical about the firm’s business model.

“The notion that you could create [an enterprise based upon] a free giveaway online is a challenging business proposition,” says Charles Goldman, co-founder of Advizent of Boulder, Colo. “It generates leads and not referrals and there is a big difference.” See: Why a $2-billion RIA is embracing the idea of a $1 million annual marketing tab, and how Advizent fits in.

More than 80% of new advisor business comes from referrals, says Goldman, “and those referrals are warm referrals,” not cold leads from the Internet.

Other concerns are that there is no guarantee to the investor that the advisor they are being connected to is worthwhile. And for their part, advisors have no assurance that they won’t have to compete for those leads or that the leads will be worthwhile. See: In their own words: Five top advisors’ secrets for creating stronger alliances to gain more referrals

Charles Goldman: The notion that you could create[an enterprise based upon] a free giveaway online is a challenging business proposition.
Charles Goldman: The notion that you
could create[an enterprise based upon] a
free giveaway online is a challenging
business proposition.

Advizent seal of approval

Advizent, with its plan to build a known brand to market to potential clients, is attempting to address the issue of trustworthiness by building a way for advisors to market and verify themselves from the jump. So far, it has been successful in attracting RIAs interest. See: Advizent hits $100-billion asset target in a matter of weeks triggering hires.

Goldman emphasizes that his marketing model contrasts sharply with that of My New Financial Advisor. In addition to verified brand that will perform audits of Advizent firms, the company will also offer events, marketing and consulting services. The hope is to create a known, verified Advizent seal that firms can use to market themselves and bring in referrals. See: Steve Lockshin and Charles Goldman begin to unveil Advizent, a venture that could put thousands of RIAs under a single cooperative.

“There’s a lot of things we’re doing that are different,” says Goldman.

Self-selected customers

For his part, Troise says that although his firm is a provider of raw leads at the moment, that the business model is evolving and that plans are in place to work more with both advisors and the consumers. His company operates profitably and the conversion rate for turning leads into clients is about 65% to 70% — significantly higher than many other lead sources, he adds.

The key to his business model, Troise says, is that people who are interested in getting the retirement report and then speaking to an advisor already know they have problems that need to be addressed and are likely unhappy with their current situation. Additionally, when the leads are handed over, the advisors also get the full retirement report so they can review it and reference it when meeting with a prospective client.

“It simply diagnoses the problem. It doesn’t tell people what to do,” he says.

With board members from and 1-800-DOCTORS on My New Financial Advisor’s board, the company has the connections to go all-out on marketing and bring in even more leads, but it just doesn’t have a buyer yet for that kind of volume, says Troise. That too, he says, is in the works.

Jack Waymire: It's Internet 101.
Jack Waymire: It’s Internet 101.

Valuable entree

That method functions as a useful foot in the door, according to one advisor.

“It just provides an introduction,” says Tim Walla, director of Walla Street Wealth Management Inc., a $100 million RIA in Leawood, Kan., which has used the service for a few months. “It’s like or eHarmony for financial advisors. What an advisor does with it at that point separates the good ones from the bad ones.” See: Ryan Shanks and Ned Van Riper eHarmonize big-fee broker recruiting.

Walla says that in one case, a local resident called with some questions about his retirement and pension funds. Walla directed the man to FreeRetirementReport’s customized URL and said he would go over the report afterwards. Ultimately, the resident didn’t want financial planning services, but did opt to have his and his wife’s $1.5 million pension lumped sum managed by Walla.

Pricey clicks

My New Financial Advisor is not the only site embracing a Web strategy for generating leads for advisors. Since 2004, Paladin Registry has been gathering leads and turning them over to advisors. But, traditional online marketing efforts to draw people to the registry have become increasingly expensive, says Jack Waymire, co-founder of Paladin.

In order to draw people to a Web site, a business can focus on marketing and media exposure; attempt to optimize its search engine results so that people browsing the Internet land on the site; or buy search engine marketing. The last is done most often by purchasing Google ad words, so that when someone searches “financial advisor,” an advertisement for Paladin Registry would appear on the side or top of the search list. Paladin used to pay about 40 cents every time someone clicked on one of those ads. Now, the company pays about $15 for every click, says Waymire. See: How analytical advisors can finally supersede sale-sy advisors.

It became clear that Paladin was going to have to do something to draw traffic to its advisor registry without relying on Google ads.

“Paladin wasn’t capable of generating it’s own traffic,” says Waymire.

Internet primer

So, the company spent a year and a half building and testing, which launched out of beta last week. allows people to create a free account that gives them access to 30 different tools, such as an investor scorecard that allows them to compare advisors in different categories or a performance tracker that measures advisors against benchmarks. There’s also a dictionary of terms and a guide to the certifications and acronyms that follow many advisors’ names — nearly half of which Waymire says his staff found are bogus. The site is built to maximize search-engine traffic and allow people to share using social-media tools.

As people use the site to research advisors and finances, they can either conduct their own search of a directory of advisors on Investor Watchdog — all of whom have simply paid to be listed there — or they can click through to the Paladin Registry, which conducts a rating process on the advisors in the registry, so as to verify their suitability. Those advisors in the registry pay for every lead generated.

“It’s Internet 101,” says Waymire.

Open space

Justin Wisz: I don't know and trust
Justin Wisz: I don’t know and

Other start-ups like New York-based Vestorly are using the Internet to build a new way for advisors to find referrals, market themselves and provide some verification that these advisors are among the good ones.

“Unlike other referral platforms, we’re vetting all our advisors,” says Justin Wisz, co-founder of Vestorly, an Internet company that creates online spaces in which advisors can market themselves. Wisz and Ralph Pahlmeyer founded Vestorly through self-financing from their other company, AdvisorLeap, a more traditional marketing company for financial advisors. Wisz worked for Fisher Investments and brings some of what he learned from the giant of consumer advertising to bear the advisor space.

Vestorly, which has been in beta for the last few months, charges advisors a fee — which it guarantees will be refunded if it’s not made-up in revenue — to create an online space or social network that the advisor can then invite clients and prospects into. That space can be easily filled by the advisor with quickly written posts about current financial activity or videos on how the market is doing. Those updates provide a better way to keep in touch with clients than e-mail newsletters, and those updates are easier for the clients and prospects to share with their own social networks, creating more referrals in the process. See: 10 top ways to use social media without courting regulatory trouble.

The theory is that referrals coming from known sources — instead of from a random Web site — are worth more to both an advisor and to an investor. In three months, says Pahlmeyer, the five advisors using the site in beta brought in three new accounts.

“I don’t know and trust,” says Wisz, his point being that, as an investor, he does know his advisor and his friends, and would trust them to recommend an advisor.

“Vestorly is not a menu of advisors. It’s a place to connect,” he says.

Frank Troise | Jack Waymire | Charles Goldman | Justin Wisz

Schwab | TD Ameritrade | Fidelity | | eMoney | Tim Walla | Walla Street | LPL | Capital Financial Management | Paladin Registry | Advizent | Vestorly | Mercer Advisors