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FSI Introduces Business Valuation Tool as Latest Member Benefit

The advocacy group hopes the discounted tools will help retain and grow membership.

The Financial Services Institute is once again looking to provide more to its member advisors than political advocacy.

Building off the success it had in 2015 with CoveredAdvisor, an insurance and benefits program for independent advisors, FSI is bringing an online business intelligence and valuation tool to advisors through a partnership with Truelytics.

Truelytics, which was developed by Gladstone before being sold to a group of private investors, digitizes information from industry consultants to provide an overall score of the firm's value, then grades the firm in three key areas: business stability, client stability and market stability. It pinpoints specific areas of weakness that are dragging down a firm’s overall valuation and provides actionable steps advisors can take to improve their score. For example, an advisor may have a B- in business stability because they don’t have a continuity plan in place, which drops the overall Truelytics score and costs the firm a specific amount in valuation.

Kevin Connor, Truelytics’ managing director of distribution, said that rather than a printed report, Truelytics is entirely digital and can be checked as often as an advisor wants. If an advisor makes a change or implements a new business practice, they can see the updated score without having to pay for another report.

“It’s a living, breathing document,” Connor said, adding that the tool accounts for nonfinancial information like client age, connecting with the next generation and referral business, in addition to the numbers.

FSI’s senior vice president of membership and marketing, Chris Paulitz, credited the partnership to FSI’s Marketing, Growth and Development Council, which determined that having a dynamic, third-party solution for tracking the fair market value of firms was a top demand from financial planning and wealth management firms. According to FSI’s research, 34 percent of advisors plan to acquire another practice or book of business in the next five years, while 21 percent plan to sell their practice.

“There’s an aging advisor population looking to sell, and younger advisors looking to buy,” Paulitz said. “This was truly a member-driven benefit.”

But even if an advisor isn’t looking to sell, they can use Truelytics to evaluate the strengths and weaknesses of their firm. This can be especially valuable, Paulitz said, for firms still looking to comply with the Department of Labor’s fiduciary rule.

FSI members get a 20 percent discount on Truelytics through the new partnership, bringing the technology’s annual fee down to $850 from $1,075. The savings is greater than FSI’s annual $179 fee, which Paulitz hopes will help retain and grow FSI’s member base. There will also be enterprise pricing options for broker/dealers, OSJs and custodians who want to use Truelytics for real-time access to individual and aggregate data from their advisors.

FSI will also get a small portion of the revenue share, which Paulitz said was part of the Marketing, Growth and Development Council’s plans to increase FSI’s non-dues revenue to keep membership costs down.  

“As with any trade association, our number-one member benefit is and always will be advocacy,” Paulitz told “Revenue will go 100 percent back into advocacy.”

In a statement, FSI President and CEO Dale Brown echoed that the group’s focus will remain on advocacy and added, “Occasionally an outstanding opportunity such as CoveredAdvisor arises that is so beneficial to our members that we cannot let it pass by. Truelytics is clearly one of those opportunities.”

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