BrightScope Inc. on Tuesday is launching a free online service that will allow investors to look up financial advisers. And for a fee, financial advisers will be able to add their own narrative — thus providing a new opportunity to market themselves.
Through BrightScope's Advisor Pages service, consumers will be able to search for advisers according to a number of criteria, such as geographic region, qualifications and assets under management and firm. They can then view adviser's pages. Of note, the pages will also include information on legal disputes and formal complaints.
BrightScope aggregated the data using filings and by tapping public information from the Financial Industry Regulatory Authority Inc.'s BrokerCheck database and the Securities and Exchange Commission's investment adviser database, said Ryan Alfred, co-founder and president of BrightScope.
“The databases that are out there are for people in the industry, but this will be in a format that the average investor can understand,” Mr. Alfred said. “So for example, the baby boomer who wants to know how to invest their retirement savings can go to his site and find an adviser.”
Not surprisingly, the site provides a potential marketing opportunity for advisers. For a fee — and pending verification by BrightScope — advisers can add to a photo, description of their services, as well as link to articles where they have been quoted, blogs, social-networking-site profiles and recognitions they have received, Mr. Alfred said. The cost of the promo service initially will be $100 per month for an adviser and $250 per month for a firm. Going forward, these advisers who subscribe to the service will be able to access analytics on the number and types of people who visited their pages, Mr. Alfred said. (Click here to view the new BrightScope adviser search tool.)
Broker-dealers have long been wary of allowing their reps to market themselves online. That concern has grown of late with the rise of social networking. Indeed, the SEC this year began a sweep of advisers' use of social media, while Finra is looking to update its guidance on how advisers should be using such sites.
But broker-dealers are realizing the need to evolve, given the changing times, said Mike Alfred, co-founder and chief executive of BrightScope. “We spoke to an executive at one of the biggest broker-dealers and they are realizing they aren't playing the game,” Mr. Alfred said. “They realize that they need to be aware of everything that can help them grow their businesses.”
And given the fact that this is a static site, broker-dealers may be more willing to allow their reps to use it, said Daniel Bernstein, director of professional services at MarketCounsel. “I think firms will treat this like an advertisement,” he said.
Ultimately, BrightScope hopes to provide information on each adviser's holdings and create a performance benchmark, Mr. Alfred said.