BrightScope's huge advisor database is first search-engine friendly way to connect consumers, advisors
Advisors can pay to add information, but disciplinary actions will show up
Brooke’s Note: Since this article was published, I’ve had the opportunity to talk more with the company — and its critics — about Advisor Pages. Look for an article Monday that delves more deeply into what to think about this giant effort at making data about advisory practices on ready display to the public.
In the first credible attempt to harness the power of search engines to connect consumers and advisors, BrightScope Inc. has used public information to create an easily accessible database of nearly 450,000 advisors. Though there is some tension; See: BrightScope sticks to its guns as it responds to outspoken critics of its Advisor Pages
Advisors can pay to add their own marketing information to their profiles. Advisor Pages can be found at: http://www.BrightScope.com/financial-planning/find/advisor.
“The SEC and FINRA have really powerful data,” says Mike Alfred, co- founder and chief executive officer of San Diego-based BrightScope. “But there are few companies like us that have the ability to turn this data into something simple.”
The effort is notable in part because of the company behind it. BrightScope has won attention because it aggregated information about 401(k) plans and is allowing consumers to compare the plans’ performances. The company generates revenue on the 401(k) site by charging companies a licensing fee for the web-based software products around the data on 401k plans. See: How BrightScope is using technology to create order in a messy 401(k) market.
Advisor Pages has a similar combined fee/paid revenue model: The content is being offered to consumers for free; advisors, however, can buy a $250 monthly subscription fee for their firms, or $100 for individuals, that will enable them to add content to their profiles in the database, such as links and pictures.
Alfred predicts the advisor site will generate at least five times more revenue than the 401(k) site.
“I think the advisor pages site is so much bigger than the 401(k) site, but the two don’t need each-other.”
He said BrightScope intends to make it crystal clear to consumers which information is non-biased (coming from the publicly available sources) and which content is advisor-posted. The advisor records will contain disciplinary actions against advisors, and even those advisors with subscriptions won’t be able to change that publicly available data, Alfred said.
How much of your story can you tell?
Having more open access to information about advisors is always a good thing, says Joseph M. Anthony, senior vice president of Ardmore, Pa.,-based Gregory FCA Communications, which provides public relations’ strategies to advisors.
“This is a positive for the industry,” he says. “Anything that helps the consumers think the advisor is more approachable is big for advisors.”
But he points out that advisors should weigh the pros and cons of paying for the service and make sure they understand precisely what they’d get from the subscription and think about how much space they’d be given to share information about themselves.
“You have to think about the implications with something like this because you probably wouldn’t have enough room to tell half of your story,” he says.
Building a business
BrightScope first jumped into public awareness in January 2009 with technology to track 401(k) plans. The company offers a single-search box interface that provides users with a plethora of data that can be used to compare 401(k) plans.
The Advisor search is similar. Consumers can search by advisor name or by certain criteria such as location, assets or specialty. Investors can also screen and find advisors with legal disputes or discipline actions on their record.
In the past month, the site has gotten 170,000 unique visitors and officials expect it to get as many as three times that many over the next 30 days, according to a spokeswoman. The site officially launched this week.
Alfred said there’s little competition in the landscape, but that other database-oriented companies, such as Chicago-based fund-tracker Morningstar Inc., might sense the potential success and craft such a product. See: Review: Morningstar Office’s web-based platform combines research, advisor tools.
Advisor Pages will be driven by search optimization. Alfred said that he hopes that when people type in an advisor’s name on Google, BrightScope’s site is the first one that pops up. The site’s been live for just a few days, and he says that’s already happening in certain cases.
Eighty large RIA firms have used the site as a test, and he believes they’ll be converted to paying customers, he said, but he wouldn’t provide their names.
How is this site different?
A number of sites allow consumers to search for information about advisors, including the SEC site, Certified Financial Planner Board of Standards as well as smaller sites like that of National Association of Personal Finance Advisors.
Alfred said the other sites in the market have limitations. For example, people can only search government databases by providing an individual of company name. They can’t use them to learn more about an unknown individual or firm.
“A lot of these sites just aren’t comprehensive,” he says. “It means the average consumer won’t be able to go on line and find the person who took them to lunch that day.”
NAPFA’s “Find an Advisor” link got 328,000 unique hits last year, says Ellen Turf, president. NAPFA members don’t pay to be listed.
This site doesn’t list whether there are any red marks on the advisor’s record, but Turf points out NAPFA members must have a clean disciplinary history.
NAPFA advisors generally get about 1,000 to 1,200 hits on their website from the NAPFA advisor search site each year.
“If someone is coming to our site, they’re coming because they want a fee-only advisor and they’re already a warm contact,” she says.
What’s in it for advisors?
Alfred said the services to advisors who pay for the subscription are evolving. But he envisions these advisors will get an array of services. They will ultimately be able to track the number of visitors who click on their name, he said.
“We’re including a whole bunch of product updates in the next six months,” he said.
There are some advisors who are not listed on the site yet, and he says that’s because data is still being entered, but expects that will be finalized shortly.