Website helps investors cut through regulatory thicket to find advisors

A website that helps investors find a financial advisor has been upgraded to help them cut through the regulatory thicket to understand advisors' disciplinary background.

Now in its fifth year of existence, Investor.com was redesigned in late December. The site’s founder, Blain Reinkensmeyer, said the goal was to make it easier to identify the disciplinary history and conflicts of each of more than 17,000 registered investment advisory firms the site covers.

The site scrapes RIA registration forms — ADV Parts I and II — that are available on the Investment Adviser Registration Depository, translating what’s there into something an investor can understand. Reinkensmeyer recently tweaked the site to make the regulatory information more readable.  

“Half the battle is trying to articulate this in lay-person language,” said Reinkensmeyer, managing partner of Reink Media Group. “We try to make it comprehensible for Americans.”

A search for a firm produces a summary page that highlights “disciplinary” and “conflict” alerts and provides a summary of firm information, such as assets under management, average client balance and the advisor/client ratio.

The site also generates an overall rating for a firm — from one to five stars — based on its proprietary “Trust Algorithm.” If a firm scores 4.5 stars or more, it earns a “trusted advisor” badge.

“People want to see a rating,” Reinkensmeyer said. “It’s something easy to digest.”

Reinkensmeyer promotes fiduciary duty, the standard of care that investment advisers must meet. Another fiduciary advocate said the website is good start but doesn’t go far enough in helping investors choose an advisory firm.

“It’s a very good first screen,” said Knut Rostad, president of the Institute for the Fiduciary Standard.

But he said the site doesn’t help investors compare firms’ fees and costs. He also said it’s hard to discern why one firm might receive one star and another gets four.

“I wish there were more editorial [explanation] of the meaning of that difference,” Rostad said. “This is a little like getting married based on [someone’s] picture and a paragraph.”

Reinkensmeyer said the Trust Algorithm page breaks down the rating criteria.

“Given the presence of those variables on each firm page — they are the focal point, after all — we feel it is straightforward to connect the dots,” he wrote in an email.

An advisor also credits Reinkensmeyer for the attempt to enlighten financial consumers but said that evaluating firms involves variables the site might not capture.

“Whether an advisory is a good advisory or bad advisory is hard to discern from regulatory filings,” said Scott MacKillop, CEO of First Ascent Asset Management. “It’s a good first step in trying to help consumers. I totally applaud their intent. But this is a hard problem to solve through an algorithm and a website.”

The site has a trailing 12-month average of 55,000 visitors each month. Reinkensmeyer said users are embracing the new design.

“Not only are Americans finding the information far easier, but they are engaging with our new educational tables like crazy and seamlessly navigating the page,” he wrote in an email.  

Reinkensmeyer said investor.com doesn't generate a profit for his firm, which includes a group of websites that compare financial services and products. The point of it is to help investors find a good advisor.

“It’s people before profits,” he said.

The inspiration for the site came from watching his grandparents lose money while working with an advisor who wasn’t acting in their best interests.

“Hopefully, one day, we’ll live in a fiduciary-first America,” Reinkensmeyer said.