Danny Hewitt says that Brandon Spottswood has “a gift that only two percent or three percent of people have.”
Years ago, when they were both working for NEXT Financial Group, an independent broker-dealer based in Houston, Hewitt said that Spottswood might not have been the most talented recruiter at the company but he was the best. “Brandon was consistently number one on the board. You saw his name on sales [boards] almost every week, if not every month.”
Nobody hustled like Spottswood, according to Hewitt. To save time and squeeze in more calls to candidates each day, Hewitt said his colleague and friend used software that would automatically dial the next financial advisor in the queue after he hung up with another.
“He never gives up. He’s extremely passionate about what he does,” Hewitt said about Spottswood.
Hewitt, a senior sales manager at Wyndham Destinations who previously helped start and grow Liberty Tax Services (ticker: FRG) with his father, entrepreneur John Hewitt, recognized Spottswood’s uncommon tenacity and when he needed money to start a company, Hewitt chose to be an investor.
“It’s not AdvisorBid I believe in. It’s Brandon Spottswood.”
The middle school that Spottswood, 32, attended in Virginia was one of the first to give students laptops in the country. He quickly became enamored with software development and built his first website in sixth grade. He continued to code his own programs and attended George Mason University, where he studied finance and began recruiting recent college grads for a company called ROCS (a synonym for Responsible Outgoing College Students).
After graduating and realizing a knack for recruiting, he eventually ended up at NEXT Financial in 2012. At the broker-dealer, he recruited advisors and was also tasked with finding ways to leverage anything and everything on the internet to help the company find candidates.
Among other tools, Spottswood spent an inordinate amount of time using what was then called The Advisor Center, a database of registered advisors that was later acquired by Investment News. “It felt like hundreds of hours in front of a computer screen” without the proportionate benefit, he said.
“I was like, I could build a better site than what currently exists by myself with no one's help. What if I got some other of my friends involved and I was able to do what I was able to do for NEXT Financial and I was able to do it for the whole industry for every purpose?”
After vocalizing the idea for months, Hewitt told him to stop talking about it and start making the idea a reality. “I think he just got annoyed with me talking about it all day long,” Spottswood said. “And eventually I just became an entrepreneur.”
In June 2015, Spottswood and two others founded AdvisorBid, an online marketplace and social network specifically for wealth managers. The other co-founders are Amy Rivera, Spottswood's fiancée, and Ian Harris, his best friend and college roommate.
The site is free for advisors, who can include detailed information about their practice, if they choose, and solicit offers to sell or transition to another firm. Buyers can choose from a free version and two other subscription tiers that give them more insights and tools to search for sellers. A “Pro” version costs $499 per year and the “Elite” version is $999 per year.
Companies can also create profiles for free or pay a subscription to unlock more features, as well as receive more algorithm-driven leads. For example, the Elite company subscription allows a company to view new sellers in real-time (others don’t get that visibility for as long as two weeks), send an unlimited number of messages to prospective sellers, and more, for $4,999 per year.
AdvisorBid is compensated if a company uses a lead to successfully make an acquisition (after the deal closes). “Sometimes we don't speak to people and I still close the deal, even though I don't speak to them. I think that's a testament to show how far along and how lightyears ahead we are,” Spottswood said.
Early last year, in an effort to get more users, AdvisorBid used public regulatory filings to proactively add profiles for all RIAs, brokers and organizations required to register with the Financial Industry Regulatory Authority and the Securities and Exchange Commission. Now, essentially every advisor and company has an AdvisorBid profile, they just have to claim those profiles on the platform. Signing into AdvisorBid with an existing LinkedIn account takes less than a minute.
Out of 404,000 potential user profiles on AdvisorBid, about 184,000 are producing advisors and more than 4,000 of them have already created or claimed their profile, Spottswood said. About 600 of the claimed or “live” profiles have expressed interest as potential buyers. Companies have also created 150 live profiles and some have already subscribed to the Elite subscription.
The number of live profiles is relatively small compared to the potential total. But activity on the site is “skyrocketing” since the Covid-19 pandemic confined many advisors to working from home. Over the past 40 days or so, connections between users have doubled from about 25,000 to over 50,000 — a sign that users are logging in more and discovering AdvisorBid’s value, according to Spottswood. The social component of AdvisorBid is beginning to spark and the sellers are starting to come.
The total amount of new “money in motion” on AdvisorBid each week — or new assets affiliated with an advisory business or practice for sale on the website — is in the billions. The average advisor with a live profile generates about $650,000 in annual gross revenue and has $73 million in assets, indicating multiple new advisors are seeking buyers each week, or larger practices than the average.
AdvisorBid’s technology enables would-be sellers to remain anonymous to their employer and colleagues while still remaining discoverable by buyers.
“We get [the information] directly from the user. I mean, every week, we have billions of AUM sign up. I'm going to hit a trillion of AUM sign ups to AdvisorBid within the next year. I will, beyond a shadow of a doubt, be first. No one's even close,” Spottswood said.
AdvisorBid raised $400,000 in a seed round of funding. It plans to raise more to spend on marketing and to hire more developers, and it has already received interest from more investors. Spottswood said he’s been so busy coding new features and functions, working on a new user interface, and readying a mobile app he hopes will launch before 2021, that he hasn’t had time to market AdvisorBid himself like he did in the beginning. Although, the start wasn’t easy. Getting companies to create profiles on a website they had never heard of — and with limited utility because of the small number of users — was a slog. Spottswood personally made calls and even visited industry contacts to encourage them to buy into his vision and begin using the website.
“The question is never how much he’s working. It’s that he’s overly doing it, if that makes sense,” Hewitt said. “There’s two types of people, ones you have to pull back and slow down and ones you have to tell to go.”
AdvisorBid is a “classic innovation story,” in which a knowledgeable person in an industry sought to resolve a widespread problem and might ultimately disrupt the industry in the process, said Marc Butler, a member of AdvisorBid’s board. Butler was previously a managing director and the chief operating officer at BNY Mellon’s Albridge, a multi-custodial data aggregation and reporting business.
With the number of advisors nearing retirement and consolidation likely to occur in the future, companies “can't possibly have enough recruiters” to scale effectively and will inevitably turn to AdvisorBid, which Butler believes is “far ahead of his competitors on a number of different fonts."
“Look if you're an advisor and you don’t necessarily want a sales pitch from a recruiter but you’re just looking to learn more about what the options are, AdvisorBid gives you the ability to do that. And you can do it on your own time. The time really is perfect for digital recruiting to just explode,” Butler said.
But scaling a company with a social network that could help it grow dramatically comes with its own challenges. Along with further developing AdvisorBid’s marketing and growth, Butler is also helping Spottswood focus on being the CEO and face of the company.
Butler is in frequent contact with Spottswood and said he works harder than most people he knows. “He’s probably on the phone with someone today,” Butler said Memorial Day morning.
AdvisorBid is seeing results of that labor but Spottswood admits he has some things to work on.
“I have conquering type language and some people are like, ‘Man, you might want to tone that down a little bit.’ I'm like, ‘I can't help it.’ I try so hard to tone it down, but now we're going after all the money,” Spottswood said.
When he has time, some of that even spills into social media. Spottswood wrote on LinkedIn last week: “If you're a broker-dealer, RIA, custodian, Hybrid or OSJ and you're not ACTIVELY using AdvisorBid daily, it will become harder and harder to compete and catch up to other companies working the site. Some people and companies stay on the site for hours or all day long! The companies that ACTIVELY use AdvisorBid daily will consolidate the ones that don't ACTIVELY use AdvisorBid.”
Chris Holloway, the president and CEO at Investor Securities Group, a so-called super OSJ of Securities America with more than 100 advisors, has had success recruiting advisors using AdvisorBid. His company found about 10 advisors — one group and then several individuals — using AdvisorBid and used the website to get through as much as 85% of the recruitment process digitally. Investor Securities Group insists on meeting advisors in person before they hire them but they could have made offers without doing so. “It really seems like it’s the Facebook and LinkedIn for financial advisors,” Holloway said.
He’s also gotten a chance to get to know Spottswood. His enthusiasm for helping advisors is almost cartoonish, Holloway said affectionately.
“He is probably one of the most exuberant people you’ll ever run across. His personality, when he’s excited about something, is so exaggerated. He loves technology and he loves the business,” he said.
At the end of a two and half hour interview, during which Spottswood spoke nonstop almost the entire time, he said his passion was probably coming through.
“I work all the time because it's fun for me. It's not work. It's just an addiction, actually. It's like, how fast can I conquer? It's not just helping people, but at this point it's like, how fast can I conquer?”