Matchmaker Or Deal Breaker? Web Sites Look To Pair Advisors, Clients

By Brian O'Connell InsuranceNewsNet

There’s a new matchmaking service in town, and for financial advisors, it has nothing to do with Cupid or any Plenty of Fish-like exercises in romantic partnerships.

No, this service is for the business side of a financial advisor’s life, and its backers say it’s a game changer in how financial planners and their clients come together in the first place.

Here’s the deal.

In March, the financial information platform Investopedia.com rolled out its new Advisor Insights Platform, which “connects investors and top financial experts,” according to Investopedia.
In a statement, Investopedia says it can connect its vast audience of 20 million members with financial services professionals, on the premise of answering user questions.

But there’s a higher agenda at work than that.

“Advisor Insights helps mass affluent investors better understand the financial world, from the simple to the highly complex, through direct access to the expertise of financial advisors,” Investopedia states. “By bridging the gap between personalized advice and the reach of digital, Advisor Insights enables financial advisors to demonstrate their value by marketing their expertise to our large investor audience.”

At a glance, here’s how Advisor Insights works. With it, Investopedia users gain quick and easy advice to “tailored personal finance, retirement and investing advice from experienced, vetted advisors by submitting questions via the Advisor Insights page,” the company states. Each advisor has a profile that lets users track the content they produce, including articles and responses to questions, Investopedia adds.

The name of the game with the new platform is technology – specifically, leveraging it to better position advisors against emerging industry threats.

"Despite the rise of robo-advisors, technology is evolving from a competitive threat into a growth enabler that helps advisors enhance their existing value proposition. Our digital platform will allow thousands of advisors to build trust and credibility among the next generation of clients," notes Greg Fraser, a senior vice president with the company.

Is this a path to potential clients that financial advisors should pursue?

Not everyone thinks so.

“I would not be interested in such an offering,” states Daniel Goodwin, a financial advisor with Provident Wealth Advisors based in The Woodlands, Texas. “We’re an established firm and want to work only with clients who are referred.”

Goodwin says his firm invests “a good amount of time” in client referrals and he wants to begin with the very best start possible. “There are lots of lead generation sites out there and I really don't want someone coming to see me who is not referred,” he adds.

It’s not that the “match” philosophy espoused by financial media sites like Investopedia doesn’t have potential – it does, some advisors say. But there are tripwires included that diminish its value.

“The Match.com concept for advisors and consumers is a great concept, but it comes with one major flaw - the flaw of differentiation,” notes Matt Cosgriff, a certified financial planner with Lifewise, a Minneapolis based financial planning firm. “In short, the large majority of advisors at the end of the day are generalists, which makes it very difficult for a matching platform to work effectively.”

Cosgriff explains that online dating platforms are able to match people using algorithms and deep personality assessments to align people together. “However, when it comes to advisors, most fall into the trap of working with everyone, which makes it difficult to match effectively,” he adds. “It’s also difficult for online matching programs to truly vet advisors and to fully understand their capabilities, which can be problematic when it comes to matching people to advisors that might not be fully qualified.”

How do actual investors feel about being on the other end of the financial advisory matching concept? That could be a positive takeaway, experts say.

Jennifer Woods Burke, securities attorney and President of CompliGuide, says many investors may initially be interested and quick to embrace technology solutions such as this only to find that it is not as quick and easy as it appears.

"While people want instant insight into the marketplace, they fail to realize that neither the current regulatory system nor business objectives support such tenuous and removed relationships,” Woods Burke says. “If the client's objective is to get real time advice on investments without investing the time and effort into building a business relationship with a qualified financial advisor or examining their own personal risk parameters and objectives, then the client is going to short-change himself.”

From the perspective of the financial professional, the outcome may not be so positive. “If the advisor becomes engaged in the provision of "one off" advice, they’re likely not meeting their regulatory requirements or building the foundation of a solid client relationship.” Woods Burke notes. “I can readily imagine a scenario where a chat turns into a complaint or lawsuit.”

Clearly, industry insiders have some legitimate qualms about external, online advisor-investor matchmaking services. But that’s not stopping online platforms like Investopedia from giving the concept a thorough shot.

No doubt, even financial professionals skeptical of the concept will be watching closely. Because if it takes off, they may be crafting their own advisory online profiles.

Brian O'Connell is a former Wall Street bond trader and author of the best-selling books, such as The 401k Millionaire. He's a regular contributor to major media business platforms. He resides in Doylestown, Pa. Brian may be reached at [email protected].