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

Related stories:

Generating leads online for advisers

More on the inner-workings of the MyNewFinancialAdvisor platform

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

INTV

When can advisers expect an SEC fiduciary rule proposal and other regs this year?

Managing editor Christina Nelson and senior reporter Mark Schoeff Jr. discuss regulations of consequence to financial advisers in 2018, and their likely timing.

Recommended Video

Path to growth

Latest news & opinion

Bond investors have more to worry about than a government shutdown

Inflation worries, international rates pushing Treasuries yields higher.

State measures to prevent elder financial abuse gaining steam

A growing number of states are looking to pass rules preventing exploitation of seniors.

Morgan Stanley reports a loss of advisers after exiting the protocol for broker recruiting

The firm said it lost 47 brokers in the fourth quarter, the most in any quarter of 2017.

Morgan Stanley's wealth management fees climb to all-time high

Improvement reflect firm's shift of more clients into fee-based accounts priced on asset levels, which boosts results as markets rise.

Legislation would make it harder for investors to sue mutual funds over high fees

A plaintiff would have to state in their initial complaint why fiduciary duty was breached, and then prove the violation with 'clear and convincing evidence.'

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print