Two well-known figures in the financial world are rolling out a plan to consolidate independent registered investment advisors under one brand name and they say they already have commitments of interest from 72 firms.
Steve Lockshin and Charles Goldman have created Advizent to bring RIAs together under that brand name to help them compete with the big Wall Street brokerage houses.
As the industry is now, many independent RIAs are too small for potential clients to be aware of them. In fact, 82% of the general population does not even know what an RIA is, the pair said.
The 72 firms that have expressed an interest in Advizent include well known financial advisors such as Harold Evensky, principal of Evensky & Katz Wealth Management in Coral Gables, Fla.; Jane Williams of Sandhill Global Advisors LLC of Palo Alto, Calif.; and Blaine Lourd of Lourd Capital Management in Los Angeles, which manages about $650 million in assets.
Each has signed a contract agreeing to join when the project is up and running but none have paid any money as yet. They know fees will be assessed next year when Advizent begins delivering services, Goldman said. Fees for the marketing service will range from $25,000 to $100,000, depending on the size of the firm, said Lockshin.
The goal of the founders is to have 250 firms with total assets under management of $250 billion by the end of the year and to eventually have 500 to 1,500 firms. So far, they have interest from firms with a total of $100 billion in assets under management after marketing themselves for only a couple of months. For now they are accepting only firms with only $250 million or more of AUM.
Advizent will perform a number of services for its members, including providing a brand name and marketing to get the word out about what an independent financial advisor is and how they can assist consumers.
Advizent also will work with custodians and asset managers on behalf of RIAs to give them more power as a larger group, Goldman said.
The new organization also will establish a simple set of standards so consumers can be assured of the quality of the advisors who are part of the organization, he said. The standards will include assurances that there are no conflicts of interest for the advisor for the services and products they are offering and that they are acting as true fiduciaries by putting their clients' needs first, Goldman said. Advizent will have an advisory committee to assure the standards are being met by the members and will audit the members' work.
It will also help advisors establish best practices for their firms.
"There is a real need in the marketplace to explain to consumers what good financial advice is and how to find it," Goldman said. "All independents are now out there on their own. If we can pull them together and create standards of excellence, that will be massive.