In late May, adviser search links appeared on both CBSMarketWatch.com and Morningstar.com, heralding the launch of matchmaking service InvestorTree.com of Bronxville, N.Y.

At the moment, the links are not easy to spot. On the CBS home page, users must scroll halfway down the left column or scroll to the very bottom of the right column to “find an advisor.” On Morningstar's site, a “find a financial advisor/planner” button is part of the “Retirement Center.”

The InvestorTree.com service is just the new kid on the block. Matchmaking has been tried before. In July 1999, Dalbar Inc. teamed up with the Microsoft Network's MoneyCentral site to launch “Advisor Finder,” with Salomon Smith Barney, American Express Financial Advisors and U.S. Bancorp Piper Jaffray as corporate sponsors.

The site still operates, but it isn't the robust referral machine organizers wanted. Dalbar CEO Lou Harvey says the service is “not inviting additional advisers to sign up,” lest the relatively small number of leads generated be diluted. The service produces about 4,000 leads a year for its 3,000 registered advisers, Harvey says. The advisers pay $750 a year for a basic listing, and another $750 a year to be a Dalbar-rated adviser (see “What's Up With Dalbar's Matchmaker?” Page 61).

Plus, the brokerage firms are no longer involved. Harvey claims the sponsorships were intended only to guide Dalbar through its launch. And spokespeople for the three firms couldn't determine what happened.

So just what makes InvestorTree and other matchmaker sites think they'll do better than a service jointly sponsored by Microsoft? Site executives have various opinions. Here's an update on four matchmakers.

InvestorTree.com had between 500 and 600 advisers signed up and was getting close to a thousand investor inquiries a day during the week it launched, according to Jonathan Wolfson, co-president.

Bill Bishop, CBSMarketWatch's executive vice president for business development, says eight million to 10 million people visit the site each month, and investors are “absolutely, clearly” looking for an adviser search service.

“Especially in this kind of market, people are not as confident as they used to be about their ability to make the right decisions; they're looking for some help,” Bishop says. “Actually, we've been looking for this [kind of service] for some time,” he says.

To separate it from Dalbar, InvestorTree has adopted a “pay for performance” model. Advisers pay $49 to register, and another $45 for every lead forwarded by the site.

But that means InvestorTree has to be sure all prospect-broker matches are made through its site so it can get paid. Therefore, the adviser profiles, though extensive, are unusual in that they include a rep's first name, firm and photo but no contact information, such as phone number or street address.

To eliminate bogus prospects, staff reviews the leads before they go to the adviser, Wolfson says, adding that there is a refund policy for any lead that proves fake. Also, since the advisers are paying for the leads, the service won't allow an individual to contact more than five advisers, he says.

FinancialPro.com is still in the prototype stage and struggling to raise funds for a full-fledged launch before year-end, according to Ron Bongo, a partner in FinancialPro.com of Glen Ridge, N.J.

Even though enrollment is free, it has only 300 advisers in its database. “The big problem with this entire space,” Bongo says, “is who do you get first? You can't attract investors if you don't have advisers, and you can't get advisers until you prove to them that you have investors coming to your site.”

However, the FinancialPro site, launched in 1999, is now getting from 3,000 to 5,000 hits a month without any advertising, Bongo says. The surge in interest is coming from do-it-yourself investors who are “searching for the best type of person to help them get out of this mess,” he says. Therefore, Bongo believes it's a good time to get a matchmaking service off the ground.

There's an interesting difference between InvestorTree and Dalbar on one side, and FinancialPro on the other. The first two screen their advisers, but FinancialPro specifically doesn't. “Our philosophy is not to rate our brokers as Dalbar does,” Bongo says. “We don't want to give investors a false sense of confidence.”

Instead, FinancialPro has a three-step educational process that teaches investors how to pick the right financial adviser, Bongo says. That includes links to regulatory agencies and advice on verifying information with advisers' firms and branch managers.

But screening may be important to get placement on third-party portals. Says Tricia Rothschild, senior product manager at Morningstar.com, on the decision to deal with InvestorTree: “We were impressed with the due diligence they do on the advisers who are part of the service. We don't want to refer our customers to someone who isn't reputable.”

AdvisorWorld.com's “Find an Advisor” function includes CPAs, registered investment advisers, accountants and tax specialists, says Lee Reams Jr., chief operating officer of the Los Angeles-based service. The majority of its listings are CPAs, but about a quarter are financial advisers, he says, noting that the site is geared toward supporting independents.

In addition to its adviser search service, AdvisorWorld enables people to submit a “request for service” that goes to “all of the subscribing financial advisers in the area,” who can then decide if they wish to respond to a prospective client.

At the moment, financial advisers can get a free listing in the directory and receive the “request for service” e-mails without cost, Reams says. Eventually, however, there will be a monthly subscription fee, though pricing hasn't been determined.

PortfolioCorner.com, launched in December 2000, features an “online client referral” tab on its home page that serves a wide range of advisers from different fields of finance, including banks and insurance companies. “We are very actively promoting our advisers,” says George Tan, president and CEO of the San Francisco-based firm. The site runs ads in Forbes and Worth magazines as well as banner ads on the Web.

Uniquely, PortfolioCorner takes into account an adviser's needs as well as a prospect's. Clients who do not meet an adviser's minimum standards will not be matched with that adviser, according to text on the site. The site also has question-and-answer forums in which panels of advisers respond to consumers and a program for advisers to publish papers and articles.

Right now, the site is offering advisers a free trial, but eventually, it will go to a subscription model — $100 a month or $1,000 a year pre-paid, says Anna Luo, vice president and product strategist.

Why Bother to Match?

According to executives, the goal of these services is to free prospects from relying on friends and family for referrals to financial advisers, while giving advisers the ability to market themselves more widely.

The questionnaires prospects are required to complete are quite elaborate. InvestorTree's is five pages long. FinancialPro's has a list of “personality and attitude” questions that asks prospects to rate statements such as “Money only becomes a concern of mine when a crises strikes” or “I often feel that I don't have enough control over my life.”

“Your philosophy might be very different from your friend's or family's,” Bongo says. “So many people are dealing with advisers they're not happy with. Our idea is to give them a better choice.”

Planning Groups Play Matchmaker

Financial planner organizations are committed to Web-based matchmaking services.

The National Association of Personal Financial Advisors' (NAPFA) referral service logged more than 27,000 consumer inquiries in 2000, says Gary Schatsky, NAPFA chairman and president of ObjectiveAdvice.com of New York.

At www.napfa.org, there's a button that says: “Looking for a Comprehensive, Fee-Only Financial Planner near you? Click here.” About 500 of its 700 members are included in its searchable database, Schatsky says.

The trade group for fee-only advisers doesn't promote the service, but the site has received favorable mentions in consumer magazines. Schatsky doesn't know how many matches have been made, but based on anecdotal information he says the number might be “quite high.” “[People who visit are] not just poking around a Web site, but have already made a determination that they want a fee-based, comprehensive adviser,” he says. NAPFA does not charge its members for a Web listing.

At www.fpanet.org, the Financial Planning Association (FPA) launched “Planner Search” in 2000 but expects to have an upgraded version by the end of this year, says Marv Tuttle, FPA associate executive director. New features will be phased in between then and now.

Among the functions to be added is the ability for a prospect to send an e-mail directly to an adviser on the list. And a “request for proposal” system is also being considered. It would give consumers the ability to submit a description of their needs, which would be e-mailed to planners in their area. The planners could then decide whether they wanted to contact those individuals, Tuttle says.

The FPA has 29,600 members, 17,000 are CFPs. Only CFPs are allowed to participate in “Planner Search” on the Web and the FPA's toll-free telephone referral service, Tuttle says. Last year, the FPA got 5,056 calls asking for referrals, a spokesperson says.
— R.R.

Few Wirehouse-Based Matchmakers Exist

Smith Barney is the only wirehouse to have gone live with a Web-based matchmaking services for its reps. Morgan Stanley's service is overdue for a launch.

Smith Barney rep Rick McLaughlin in McLean, Va., has gotten six leads in the six months he's had a home page. “It hasn't been a huge amount, but the quality has been really good.” The people had assets in the $300,000 to $600,000 range, he says.

Four were people who searched the Web looking for someone with expertise in stock option plans (a big part of McLaughlin's business), while two were people who had moved to his area. And of the six, “two came in [to the initial meeting] with the paperwork to do transfers right then,” he says. He's already closed five of the six leads.

Likewise, broker Craig Rappaport in the Berwyn, Pa., office, says the people who contact him via the Web “seem anxious to get started.” He has gotten about 20 leads, with assets ranging from $50,000 to $500,000. “[Most are looking for] a full-service program rather than asking for one piece of information,” he says.

“This is a fantastic tool,” Rappaport says. Adds McLaughlin: “From a broker's perspective, it's the least labor intensive thing I could imagine. There's no downside at all.”

Morgan Stanley was expected to launch broker home pages and a matchmaking service in early April (see April 2001 RR, Page 36), but didn't get started until May 17, a spokesperson says.

In the first five weeks, about 2,000 reps created Web sites, she says. Initially, the firm said about half its reps — associate vice presidents or above — would be eligible for home pages and the matchmaking service, but the group of eligible brokers has been expanded to include any rep who's been registered at least two years.

However, progress on the matchmaking service appears stalled. A check of the firm's Web site in late June didn't turn up any matchmaking function. The spokesperson refused further comment.
— R.R.

What's Up With Dalbar's Matchmaker?

Dalbar and Microsoft's “Advisor Finder” might be struggling with limited referrals, but the firms are not ready to throw in the towel.

“We absolutely do have patience on this,” says John Skovron, group product manager on Dalbar at Microsoft headquarters in Redmond, Wash. “There are several things in the works that might improve traffic” to the service, including the obvious — give the “Advisor Finder” button more visibility.

“I've talked to a lot of advisers about how it's going,” Skovron says. “The referrals they've gotten are good, but they haven't gotten enough of them.”

The service tends to be uneven as well. Some advisers don't get any leads, while others “have easily gotten a dozen leads in a year, probably more than they expected,” Skovron says.

Initially, Dalbar required people to submit their names through the Web site, but surveys showed that consumers preferred making contact over the phone, so Dalbar started posting advisers' phone numbers, Skovron says. Once it did that, it lost the ability to track referrals made through “Advisor Finder.” Therefore, the leads might actually be a lot greater than the 4,000 cited by Lou Harvey, Dalbar CEO.
— R.R.

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