Fintech

Advisers frustrated by lead generator

Only time will tell. Although that is a cliché, my experience has been that only through observing…

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

[email protected] Twitter: @ddjanowski
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