AdvisorBid, an online recruitment tool and a marketplace for buyers and sellers of wealth management firms, launched public profiles for all registered investment advisors last week. Regardless of whether an advisor has signed up for AdvisorBid, they now have a profile on the platform.
Brandon Spottswood, founder and CEO of AdvisorBid, likens the profiles to those on other social media websites, especially LinkedIn. But AdvisorBid profiles were created with financial advisors and their firms in mind, Spottswood told WealthManagement.com.
Users can connect with each other, share content and take part in AdvisorBid's other services, including its marketplace to buy and sell books of business, and a recruiting portal that helps match firms and advisors. Switching firms is almost always done in secret, and Spottswood said a platform where advisors and wealth management firms can discreetly share their willingness to engage each other is in demand. Finetooth Consulting's founder and advisor recruiter, Ryan Shanks, launched a similar service called FA Match in January.
But there can be only one effective marketplace for the advisory community, according to Spottswood. Advisors won't visit multiple websites offering different services if there is a singular one serving all of those needs, he said.
Like SmartAsset, a company using a form of artificial intelligence to hasten its progress of creating a public profile for all 300,000-plus registered investment advisors in the U.S., AdvisorBid profiles are created using data from the Securities and Exchange Commission, the Financial Industry Regulatory Authority and other online resources. Once an advisor claims their free profile, they can update it and fill in other information about themselves, such as certain groups of clients they specialize in working with.
In October, SmartAsset had 40,000 profiles live on its SmartAdvisorMatch.com website and expected to have a profile for all 300,000-plus RIAs by the end of 2019.
Spottswood, who was a recruiter at NEXT Financial before starting AdvisorBid in 2014, said uploading the profiles to AdvisorBid was a significant milestone for the company, since it plans to also become a place where investors can find advisors best suited for their needs. Similar to AdvisorBid's matching engine that pairs potential buyers, the company hopes to also be able to help investors narrow their search for an advisor and discover those who might not be as visible as others online.
Companies leveraging technology to aggregate information about advisors and investors and providing services to those groups have attracted investors.
AdvisorBid has raised more than $200,000 of a $1 million seed round of funding, Spottswood said. Last summer, Focus Financial Partners led a $28 million fundraising round for SmartAsset, to continue to build a fast-growing, client-lead generation tool for financial advisors. The Series C round of capital brought the total raised by SmartAsset to more than $51 million. FA Match recently raised $500,000 in seed capital funding, led by MassMutual.
In September, Zoe Financial, another company that connects prospective clients to advisors, raised $2 million in seed funding from a group of angel investors, including a former BlackRock executive and the chairman of the J.P. Morgan Exchange Traded Funds board.