Technology Update

Advisers frustrated by lead generator

Growing pains, lack of leads reported by some advisers, MNFA fires some advisers trying to game the system

Oct 28, 2012 @ 12:01 am

By Davis Janowski

Only time will tell.

Although that is a cliché, my experience has been that only through observing the use of a technology-based service or tool over time can you accurately gauge its strengths and weaknesses.

Take MyNewFinancial Advisor.com, which I first wrote about in April. MNFA has been pursuing mass-affluent baby boomers with between $250,000 and $3 million in investible assets.

The lead-generation service's tech-centered approach to prospecting has left some financial advisers less than happy. Since June, I have spoken with several who have been frustrated by the service.

LACK OF LEADS

Ken Watten, a partner at Kaye Capital Management, signed up for an MNFA account in May and even purchased a syndicated subscription, only to become dissatisfied with the lack of leads.

Although the syndicated option he signed up for provides 50 leads over 12 months for $5,000, Mr. Watten said he spent two and a half months waiting.

“After three voicemails left with no return call, I started to panic, concerned that I had become the victim of a Ponzi scheme,” he said.

A few weeks later, he did get a call, Mr. Watten said, though it was from someone at MNFA who was unaware of his previous calls and who tried to sell him more leads.

“I also likely would have given them more time to deliver if it wasn't for the fact that they pushed a new contract out to us with language that would not guarantee a full refund upon request,” he said.

Ultimately, he got a full refund and walked away.

Founder Frank Troise doesn't dispute that account but said Mr. Watten's frustration coincided with a major retooling of MNFA and a campaign to contact all customers.

The change in verbiage to “best efforts,” from “guaranteed” leads, stemmed from the service's popularity in locations such as the Los Angeles area, where Mr. Watten's firm is located, Mr. Troise said.

The original process — first-come, first-served blocks of leads going to the geographically closest firms — had not worked, so MNFA replaced it with a more granular filtering methodology dictated by the adviser and investor when signing up for the service, he said.

The MNFA model also had a tough time handling the size differences of registered investment adviser firms. Large RIAs want a strong, steady stream of geographically adjacent leads, while smaller firms need a trickle spread over a longer time, Mr. Troise said.

Another problem, which only time has revealed, is the need for speed.

“One of the challenges we have is that smaller RIAs can go two to three days to call back a lead we generate, but if an adviser does not call back in 30 minutes, they are going to lose that lead,” Mr. Troise said.

The InvestmentNews/Moss Adams Financial Performance Study of Advisory Firms lends credence to this argument: It found that 67% of new clients and new revenue come from either a client or center of influence referral, as opposed to a lead generation system like MNFA's.

Another adviser, provided by MNFA, said he is having success with the model, however.

“In the first two months, we got probably 100 leads, and from there we have identified several million dollars in assets, of which we probably have closed $10 million,” said Joseph D. Anderson, executive vice president of Pure Financial Advisors Inc., an RIA firm with $600 million in assets under management.

Visit Monday's blog post for additional information

djanowski@investmentnews.com Twitter: @ddjanowski

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Upcoming Event

Apr 30

Conference

Retirement Income Summit

Join InvestmentNews at the 12th annual Retirement Income Summit - the industry's premier retirement planning conference.Much has changed - and much remains to be learned. Attend and discuss how the future is full of opportunity for ... Learn more

Featured video

Events

Beyond coding: Behind the scenes of Fuse 2017

Fuse is a one-of-a-kind event where developers from various fintech firms come together and work towards a common goal. Although the nights are long, a ton of innovation comes out of the event, as everyone has a bit of fun along the way.

Video Spotlight

Are Your Clients Prepared For Market Downturns?

Sponsored by Prudential

Recommended Video

Path to growth

Latest news & opinion

Jerry Schlichter's fee lawsuits have left an indelible mark on the 401(k) industry

After a decade of litigation, fees are lower and retirement plans are more transparent. But have the lawsuits gone too far?

10 best financial adviser jokes

How many financial advisers does it take to screw in a lightbulb?

With margins crashing, broker-dealers look to merge: report

Increased regulation is straining profit margins among broker-dealers, sending many of them into the arms of their bigger brethren.

Top 10 financial firms ranked by investor satisfaction

Find out which firm took the top slot for overall investor satisfaction for the second year in a row.

What not to say to clients when the markets drop

Here's what advisers should steer clear of saying the next time stocks turn downward.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print