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.
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