Cash-poor Advizent closes doors

APR 02, 2013
By  DJAMIESON
Advizent, the fledgling marketing cooperative for independent RIAs formed by Charles Goldman and Steve Lockshin, has shut down. The group couldn't raise the money it needed to fund a multi-million-dollar consumer marketing effort, and was to end operations as of March 31, according to an e-mail Advizent sent to supporters last Thursday. “For the strategy we wanted to execute, the financing wasn't going to be there,” Mr. Goldman told InvestmentNews. Launched nearly a year ago, Advizent had been trying to raise between $20 million and $50 million from advisers and vendors to pay for an ambitious advertising program. Mr. Goldman, an industry consultant, formerly ran the custody units at both The Charles Schwab Corp. and Fidelity Investments. Mr. Lockshin is the founder of Convergent Wealth Advisors, as well as consultant Fortigent LLC. The men are well-known in the advisory industry, and their vision of building a branding cooperative for registered investment advisers garnered serious attention, if not money. Advizent scored a coup of sorts last July when John Bogle, founder of The Vanguard Group Inc., agreed to serve as chairman of its board of standards. Mr. Bogle, citing time constraints, resigned from the position in December. More than 140 RIA firms with $150 billion in assets signed on as potential partners, Mr. Goldman said. The group never did take any money from members or sponsors. Advizent, a for-profit venture, was counting on support from custodians, asset managers and technology providers to help fund its efforts. But that's where things fell apart.

TOO HIGH A PRICE

The firm was asking custodians for 1 basis point on Advizent-member assets, and 2 to 5 basis points on assets from money managers. Those contribution levels could have required major players to fork over millions of dollars. “We heard over and over again from vendors ... that they wanted to support us, but at a different level,” more like in the $10,000 to $100,000 range, Mr. Goldman said. “That made us reassess.” Advizent could show prospective corporate supporters how it would expand the RIA space, Mr. Goldman added, but not what kind of return it would produce for a particular sponsor's investment. “In a corporate setting, you have to show that,” he said. [email protected] Twitter:@dvjamieson

Latest News

SEC bars ex-broker who sold clients phony private equity fund
SEC bars ex-broker who sold clients phony private equity fund

Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.

The key to attracting and retaining the next generation of advisors? Client-focused training
The key to attracting and retaining the next generation of advisors? Client-focused training

From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.

Chuck Roberts, ex-star at Stifel, barred from the securities industry
Chuck Roberts, ex-star at Stifel, barred from the securities industry

"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.

SEC to weigh ‘innovation exception’ tied to crypto, Atkins says
SEC to weigh ‘innovation exception’ tied to crypto, Atkins says

Chair also praised the passage of stablecoin legislation this week.

Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest
Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest

Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.