FA Match, a startup company out to disrupt financial advisor recruiting, announced Thursday that it raised $1 million in a pre-seed round of funding from a group of high-profile wealth management executives.
In 2018, Ryan Shanks and Eric Savage co-founded FA Match, a platform that discreetly connects financial advisors with wealth managers who are hiring. All companies using the platform to find potential employees pay a monthly fee of $200 and a flat $10,000 fee each time an advisor is hired and starts working at their company. There is no cost for advisors to create a profile, which FA Match uses to pair them with companies that might be a good fit.
Shanks, a longtime recruiter in the industry, and Savage, a software developer, bootstrapped the company until last year. In 2019, FA Match raised a $500,000 round of funding that included $250,000 from MassMutual and $250,000 from other investors.
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The $1 million round of funding was led by a private investor. Others include Ron Carson, the founder and CEO of Carson Group, an Omaha, Neb.-based RIA that manages $14.5 billion. Brian McLaughlin, co-founder and CEO of Redtail Technology, a client relationship management software company, and Steve Lockshin, of AdvicePeriod and Vanilla, also participated in the round.
“I’m standing behind FA Match because I firmly believe Ryan and his team have the advisor’s best interests at heart. That motivation, paired with high-quality tech and recruiting experience, is a formula for success,” Carson said in a statement about his investment.
Jason Wenk, the founder of FormulaFolios, a turnkey asset management platform that merged with Brookstone Capital in July, is another investor in FA Match. Wenk is also the founder and CEO of Altruist, a new digital, commission-free custodian for RIAs.
“These are folks that I’ve known, and had a tremendous amount of respect for, for a long time,” Shanks said about the group of investors.
FA Match also announced on Thursday that it added to its advisory board Jim Roth, the managing director at Oyster Consulting who previously spent 30 years at BNY Mellon’s Pershing.
The startup plans to use the funding across the business to improve the advisor and subscriber experiences, its matching algorithm and to spend more on marketing efforts. Shanks and Savage are the only two full-time employees. The company contracts others to help them and might consider adding another full-time employee, Shanks said.
In the coming year, with the help of Roth, FA Match also intends to build more enterprise relationships with larger companies, which could include independent broker-dealers and RIA aggregators (such as Focus Financial). Scaled across a large organization hiring many advisors, the cost savings quickly add up, according to Shanks. Custodians might also be a partner in the future — any value add to their RIA customers makes them that much more appealing, he said.
“We have the potential to break down the archaic barriers that have been a staple in wealth management recruiting for decades and become the new standard for recruiting software among advisors and institutions,” Roth said in a statement.
“I’m thrilled to be a part of the FA Match team and have high expectations for where we can go in the months and years ahead.”
Shanks told RIA Intel he expects the company will raise more money later next year or the following and likely a larger amount. Smart founders only raise what they need to maintain as much equity in their company as they can, he said.
“You see all the time the company that goes out, raises a ton of money, and sells for a ton of money… but the owner owns 5% of the company.”
AdvisorBid, another advisor recruiting platform and social network for wealth managers led by an austere founder, has raised $400,000 in a seed round of funding.
Correction: In a previous version of this story, Shanks had said that he and Savage solely funded FA Match until the round of funding announced Thursday. The co-founders actually bootstrapped the company until 2019, when it raised $500,000 from MassMutual and other investors.
Michael Thrasher (@Mike_Thrasher) is a reporter at RIA Intel based in New York City.