Brightscope set to push out adviser fees

Brightscope Inc. has begun collecting fee data from advisory firms' ADV forms and plans to begin releasing the information sometime this year, potentially providing the public with a powerful tool to compare advisers' pricing. “If we can help a consumer look up an RIA firm, and see how that stacks up to advisers in a similar asset range, that's really cool,” said Mike Alfred, co-founder of Brightscope Inc., which launched its adviser site in 2011. Brightscope will “start surfacing some of that [fee data] in the next few months … in the fall at the latest,” he said. The site attempts to collect information on every registered representative, investment adviser representative and advisory firm by consolidating data from registration and disciplinary databases. Brightscope's online adviser-listing service ranks advisers by experience and conduct, and offers a search capability for consumers. Fee information that advisory firms file on ADVs “is free-flowing text, so it's hard for a [computer] to do all the work,” Mr. Alfred said. As a result, the fee information is being inputted manually. Mr. Alfred said the data will be checked for accuracy. “If we can do it accurately, and merge it with our other data, we can add a lot of value,” he said. Michael Kitces, director of research at the Pinnacle Advisory Group Inc., likes the idea of more fee transparency. “In my cursory glances over the years, very few advisers put their fee schedules on their websites,” he said. Advisers should have a link to their ADVs, but those are hard to find, leaving potential clients in the dark about fees until after they meet with an adviser, Mr. Kitces said. However, Brightscope will be challenged in showing what services advisers offer, so that consumers can make a meaningful fee comparison, Mr. Kitces added.