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Lead-gen site aims to match advisers and clients through data analysis

Feb 20, 2014 @ 2:00 pm

By Joyce Hanson

Gen X Practice Management Lead Generation
+ Zoom

A pair of Millennials from the University of Chicago Booth School of Business think they can use technology to improve on the use of old-fashioned word-of-mouth referrals to connect advisers with potential clients.

Their startup, Finom, proposes to screen and profile independent fee-only advisers for clients based on their specific investment profile and preferences, such as age, geography and services offered. Finom then analyzes the monthly holdings data in an adviser's universe of client accounts and matches it to the prospect's preferences.

“We've talked to dozens of advisers in Chicago and beyond,” said Finom co-founder and co-chief executive Aziz Lalljee. “They vary widely in terms of their investment theses and backgrounds. This is in keeping with our philosophy that no one adviser fits all people.”

Finom won't charge advisers or clients directly, but if a prospective investor finds an adviser through the website and signs an agreement to hire the adviser, Finom will then get paid by the adviser as a percentage of the assets managed for the client. The annual recurring payment would be paid quarterly and would vary from 10 to 20 basis points, depending on asset level.

The firm is now in a pre-launch startup phase and is shooting to make the website live in the public domain by the end of the month, Mr. Lalljee said.

“We've signed up about a dozen independent fee-based registered investment advisers with a range of assets under management from $20 million to hundreds of millions,” he said.

The startup is self-funded and delaying the prospect of raising financing until it becomes firmly established in its headquartered city of Chicago, said Mr. Lalljee, 28, who previously worked at middle-market private equity firm Tamarix in New York and in economic consulting at Navigant in Philadelphia and New York. dd

His partner, David Gomel, 30, previously worked in corporate strategy and product management at the online operations of CBS in San Francisco.

“While we're open to investors of all ages, we think we're particularly well-suited for people in the 30 to 50 age range who are used to finding and comparing services online, and who are data-centric in their decisions,” Mr. Lalljee said.

“We're really stressing objectivity and transparency,” he said, noting that he and his partner came up with the idea for Finom after poor personal experiences searching for advisers for family members.

“Advisers are found by word of mouth, by talking to family members, friends, lawyer or accountant, but those networks are limited and arbitrary,” he said, adding that Finom's search engine involves data-driven analysis thdat creates models showing how the prospective client's investments would have performed after fees under an adviser's management.

Joel Bruckenstein, co-founder of the T3 Technology Tools for Today conference, said he is skeptical of sites such as Finom.

“There have been enterprises before that try to act as matchmakers between advisory firms and the general public. To date, in my opinion, they haven't been very successful,” he said.

For example, Brightscope Inc., a financial information website that offers an online adviser search tool, turned off advisers by creating profiles about them with public information and then charging those advisers to make changes, Mr. Bruckenstein said.

Another lead-gen startup, Vestorly, however, stands to be successful, he said, because it acts as more of an indirect marketing and communication tool that helps connect advisers to potential clients. Finom, on the other hand, sets a high bar for itself in terms of making a sure match, Mr. Bruckenstein said.

He also noted that both the Financial Planning Association and the National Association of Personal Financial Advisors already offer free “find an adviser” matching services.

“Am I totally ruling [Finom] out? No,” Mr. Bruckenstein said. “But as a client, I would rather get recommendations from people I know and then do the due diligence. There's a reason why people do it the old-fashioned way. It tends to work.”

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