AdvisorBid, a growing online marketplace and social network for financial advisors, launched a new feature last week that its founder says gives users “the transparency that everyone wanted but no one had.”
Individuals and companies have long been able to activate profiles (AdvisorBid has created over 400,000 using public records), add information, connect with others, and share things with their network using AdvisorBid, much the same way users do with Facebook or LinkedIn. Although, AdvisorBid has utility beyond that of just a social network. It is also a platform companies can use to recruit financial advisors.
The site is free for advisors and companies to use but they can also pay a subscription to unlock more features to help them sell or transition their business, or solicit more candidates, respectively. Like human third-party recruiters, AdvisorBid is compensated if a company uses a lead to successfully make an acquisition.
There are more than 100,000 connections between over 4,000 individual profiles claimed, and about 600 of those users have expressed interest as potential buyers of advisory practices. Companies have created almost 300 live profiles, up from 150 in May. Founder Brandon Spottswood expects there will be more than 500 companies before the end of the year by year-end and more individuals will sign up as AdvisorBid continues to release new features in the coming months.
“AdvisorBid will look so different 100 days from now, it’s going to be nuts,” said Spottswood, the “exuberant” entrepreneur who started the fintech company in 2015.
In the meantime, a recently-added feature called “leaderboards” allows users to rank their search results for wealth management firms according to assets under management, the number of advisors they have, and the annual gross revenue (all fee- and commission-based revenue, including from insurance sales).
A wealth manager’s assets under management, and the number of financial advisors it has, are generally shared freely and are readily available in public regulatory filings or news articles. But annual gross revenue, or AGR, is only known if a company has chosen to disclose it.
Each leaderboard filter has its uses. For example, an advisor might only be interested in joining an RIA, broker-dealer, or hybrid firm with a certain number of advisors. Or, users can use them to get a sense for how much money a firm is bringing in per advisor — they might be interested in joining a company or practice where there are peers with practices more likely to be similar to theirs.
Spottswood is interested in adding any feature that might help advisors explore and make decisions about selling their business. Before founding AdvisorBid, he was a successful recruiter at NEXT Financial Group, an independent broker-dealer based in Houston.
So far on AdvisorBid, 93 companies have shared their assets under management, 86 have listed the number of producing advisors they have, and 85 companies have revealed their AGR. However, the company expects those totals to “drastically increase” now that the leaderboard feature is available. One firm immediately added its information when it learned about the feature, Spottswood said. Wealth managers competing for prospective employees feel compelled to be as transparent as their peers.
The leaderboards change every day as companies — some logging in daily and using AdvisorBid — update their information to keep it current for prospects, Spottswood said.
“I love helping people and everyone wanted this.”
Spottswood believes that in five years, AdvisorBid could replace most third-party recruiters focused on advisors. Every week, advisors with an aggregate of between $5 billion and $10 billion in new assets are signing up and exploring opportunities on the website and some are putting their practices up for sale, eliminating much of the discovery process that companies hire recruiters to do. Still, human interaction is often required; people want to get to know the wealth manager they would be working for.
“A lot of advisors think this is like real estate but it’s not,” Spottswood said. Unlike a house, it might not be wise for a seller to seek out and take the highest offer. “This is different, [advisors] want to make sure their clients are taken care of.”