Well-known adviser named to board at industry data specialist; plenty of complaints at launch
Michael Kitces has joined Brightscope Inc.'s advisory board.
Mr. Kitces, partner and director of research at the Pinnacle Advisory Group Inc., and a well-known industry speaker, blogger and social media guru, is joining Brightscope as the firm plans major additions to its adviser listing and ranking service.
Brightscope, which built a business rating 401(k) plans, “is taking whole new interest in its adviser platform,” Mr. Kitces said.
This year, the site plans to begin showing adviser fee information taken off of ADV forms.
Mr. Kitces said his role will be helping Brightscope figure out how to improve the usefulness of adviser data for consumers, “while being a little more sensitive to advisers,” he said. The firm's adviser listings and rankings generated criticism when the service was launched in 2011. Some advisers complained about what they felt were inaccuracies in the data.
Mr. Kitces was among them.
“My [Brightscope] page says I have only 8 years [experience], even though … the exam section shows five years” more than that, he said. “That was part of my criticism. So Brightscope, to their credit, said 'Help us fix it,' which is what I'm doing.”
In addition to working on improving Brightscope's experience rating, Mr. Kitces said the website also needs to figure out how to show designations and adviser fees. A key question is determining what information to let advisers modify so that investors aren't misled, versus maintaining disciplinary and other data that advisers just don't want publicized.
If advisers control too much, Brightscope will “no longer be a credible source,” Mr. Kitces said. On the other hand, “I think the system is a little too restrictive in not allowing corrections,” he added.
Mr. Kitces joins the one other adviser on Brightscope's advisory board, Josh Brown, author of TheReformedBroker.com blog and an adviser at Fusion Analytics Investment Partners LLC.
“We're all aware of what the issues are” with the data, Mr. Brown said. “What [Mr. Kitces] brings is lot of intellectual heft” in coming up with some answers.
In a statement, Mike Alfred, co-founder of BrightScope praised Mr. Kitces' “forward thinking approach to social media and digital marketing [and] tremendous knowledge of the [adviser] space.”
Mr. Kitces said he will be paid “some small fraction of equity” in Brightscope for his role on the board. He said he has been intrigued with Brightscope's potential to be a dominant and consumer-friendly source of adviser data.
“It could become a verb,” he said, if investors learn to routinely “Brightscope” their financial advisers.
