Independents to launch consumer education push

Advizent LLC is asking custodians and asset managers to help it fund a consumer education campaign to promote independent advice and the Advizent brand. Advizent, a nascent branding cooperative for independent advisers that was co-founded by industry luminaries Charles Goldman and Steve Lockshin, is asking custodians for 1 basis point on Advizent member assets, and 2 to 5 basis points on assets from money managers. The funds would be “spent solely on consumer education and awareness,” Advizent said today in an e-mail sent to advisers. The e-mail encourages advisers to contact their custodians and the asset managers they use, and encourage vendors to get on board with the educational initiative Advizent plans to launch. “It's a way for [custodians and asset managers] to fund the branding campaign,” Mr. Goldman said in a telephone interview. “Advisers don't have enough to do it on their own.” Mr. Goldman said the plan to get support from custodians and asset managers is not new. “We're in good discussions with a lot of them,” Mr. Goldman said of potential vendor-sponsors. “The argument is, if it works, it's the cheapest investment in growth you can imagine” as Advizent advisers capture more assets, he said. “If not, we'll stop it. It's an easy choice to make.” Advizent is considering forming a nonprofit corporation to administer what Mr. Goldman hopes will be a $30 million to $50 million campaign to educate consumers about fiduciary advice. Whatever the funding structure, “the goal is full accountability and transparency so [sponsors] can see where every penny is going,” said Mr. Goldman, who formerly ran the custody units at both The Charles Schwab Corp. and Fidelity Investments. His partner, Mr. Lockshin, is the founder of Convergent Wealth Advisors as well as investment provider Fortigent LLC. Advizent itself will be a for-profit organization, open to advisory firms with $100 million or more in assets, who pass a due-diligence screen and pay dues for various member benefits. Mr. Goldman said Advizent has about 135 provisional registered investment adviser members with a combined $140 billion in assets who have indicated an interest in joining.