Can SmartAsset succeed where other advisor-client matchmakers failed?

Register now

While several firms have tried to build an eHarmony for advisors and prospective clients, few have gained much traction.

SmartAsset, however, believes its new offering — Live Connections — can help its matchmaking service SmartAdvisor succeed where previous efforts have foundered. More than 65 million people come to SmartAsset each month for personal financial information and advice, a pool of investors that CEO Michael Carvin says is large enough to feed qualified leads to advisors.

“Our super power is our audience,” Carvin says. “Without that, we would have the same problem that everyone who has tried this has had... It is incredibly difficult, if not impossible, to build both sides of this marketplace at the same time.”

Most people want to be within driving distance of their financial advisor, Carvin says. So for a matchmaking service to be a success, it needs consumers all across the country.

For those in the SmartAsset audience looking for an advisor, SmartAdvisor surveys them on location, investable assets and planning needs to pair them with an advisor. With Live Connections, prospects can opt to immediately speak to an advisor on the phone instead of sharing their information and waiting for a call back.

By making that immediate connection, Live Connections will improve the chances that the lead becomes a client, Carvin says.

“All advisors have to do is pick up the call and focus on what they’re good at: advising clients,” he says.

Live Connections can help advisors convert prospects into leads, says SmartAsset CEO Michael Carvin.

Similar past attempts by consumer personal finance companies have struggled to gain traction. NerdWallet’s Ask an Advisor and Investopedia’s Advisor Insights have both closed down.

“I’ve long been skeptical of these services… and in fact really haven’t seen much in results from them for years and years,” says XY Planning Network co-founder and Financial Planning contributor Michael Kitces, who cautioned advisors against using third-party websites for business development in 2016.

While these services are improving — Kitces’ recent study on client acquisition costs named SmartAsset, FeeOnlyNetwork and Zoe Financial as “capital-smart” ways to find new business — an issue remains with the quality of new leads, he says.

Zoe Financial, a competing matchmaking service, attempts to address this issue by having advisors pay for a referral only when the prospect hires them, says CEO Andres Garcia-Amaya.

The quality of a lead is also in the eye of the beholder, Garcia-Amaya says.

“Every lead that fills out a form ingand says ‘find me a financial advisor’ is qualified. They might not hire the advisor, but that doesn’t mean they don’t hire someone else,” Garcia-Amaya says.

Of course, the sales and screening process takes time, Kitces says. While some large RIAs have dedicated business development staff through weed through every prospect, most advisors don’t have those resources.

“You might get 10 or 20-plus leads just to get one client. And advisors really do not like sifting through leads,” Kitces says in an email. “Our data suggests that at least as a category, these providers are providing real marketing value and [return on investment]. But at best, it’s grindy to separate the wheat from the chaff.”

Carvin agrees that busy advisors don’t want to sift through too many leads, no matter how affordable they are. While there are large RIAs on SmartAdvisor, he says small firms can also make it work.

“One-person shops can be incredibly successful if they are hungry, want to grow and have a repeatable process,” Carvin says.

The quality of leads is key, he adds. The average investor looking for advice on SmartAdvisor is 57 years old with investable assets of $890,000, making them prime potential clients for most advisors, Carvin says. Three-quarters of them do not currently have an advisor, and 70% are either retired or less than 10 years away from retirement.

Since launching SmartAdvisor in 2018, the platform has helped transfer $9.7 billion in assets to advisors, Carvin says.

“We’re good at identifying people who are already in the market for advice and then helping them with that process,” Carvin says.

For reprint and licensing requests for this article, click here.
INVEST West 2020 Business development Client acquisition Michael Kitces
MORE FROM FINANCIAL PLANNING