Seal of approval for advisers? Goldman, Lockshin say it’s in the works

Two luminaries in the independent RIA space, Charles Goldman and Steve Lockshin, have formed a new company, Advizent LLC, with the goal of becoming a branding co-operative for independent advisers.
Mr. Goldman, a consultant and the former head of Schwab Advisor Services, said the new firm would “bring [independent] advisers together and give them a good housekeeping seal of approval.”
The firm hasn’t begun operations yet, but two weeks ago it began putting the word out, directing advisers to its website where they can sign a “letter agreement” that they’d be interested in participating, Mr. Goldman said.
About 20 or so firms with about $50 billion under management have signed up, Mr. Goldman said. The firms are not paying dues yet, but have indicated they will.
“This year, we’re building out the benefit structure [for advisers], the marketing plan, and we’ll start charging next year,” Mr. Goldman said. “At least that’s the rough estimate” in terms of a time frame.
For now, Mr. Goldman is personally funding the venture with Mr. Lockshin, who is founder of Convergent Wealth Advisors, an RIA firm with $10 billion under advisement.
Advizent will be based in Mr. Goldman’s hometown of Boulder, Colo.
The firm will develop a set of criteria member firms must meet, such as having $250 million or more in assets, meeting certain technological capabilities, using an outside custodian and passing screens for regulatory histories and ADV disclosures, Mr. Goldman said.
He also wants to negotiate “better deals for asset management, custody and technology vendors” than individual RIA firms can get on their own, or through their custodians.
Mr. Goldman said he’s had “cursory meetings” so far with custodial firms, and the feedback so far is “they’re interested in learning more.”
“We’re hoping to partner with everyone,” he said. “Maybe we’ll compete” in some areas “but it’s really a lift-all-the boats business strategy.”
Mr. Goldman said he hoped to have 500 to 1,000 firms join as members.
A fee schedule hasn’t been determined, but rates will be “meaningful,” he said.
The goal is to raise enough revenue to create a branding budget of $50 million or more to take on the biggest financial services firms.
While most financial firms talk about products, Advizent will talk about the “value of independent advice,” Mr. Goldman said.
“Our message is really different.”
Schwab Advisor Services last September rolled out a similar online advertising campaign dubbed “RIA stands for you,” intended to educate consumers about how independent advisers differ from competitors.
At the time, Schwab said it planned to spend “multiple millions” on the program.
“As much as I applaud that, and it’s a valiant effort, it’s tiny,” Mr. Goldman said. “We’re thinking of something with much more orders of magnitude, that will be more impactful in the marketplace.”
A spokeswoman for Schwab did not return a call seeking comment.
The idea of a marketing co-op for advisers might work, given the success co-ops have had in other industries, said Lou Stanaslovich, chief executive of Legend Financial Advisors Inc., with about $360 million under management.
But depending on the fee level, which could be around $50,000 per firm, “there’s got to be a heckuva lot of business [coming from Advizent] to make that worthwhile,” he said.
If Advizent can produce a flow of qualified prospects, “they would have significant value for advisers,” said Jack Waymire, president of the Paladin Registry, which pre-screens advisers who advertise on the Paladin site. “This is the No. 1 marketing challenge for everybody,” he said.
Paladin uses the advertising revenue to generate investor leads, but will soon be launching a site to attract investors.
The RIABiz website reported on the emergence of Advizent on Thursday.

Related Topics: RIA Marketplace