Evaluating three find-an-adviser websites

Before deciding where to wine and dine your significant other, chances are you will take a gander at a restaurant review or two online. These days, a plethora of review sites and tools have made the Internet most people's first stop when shopping for restaurants, cars and almost everything else. Although still in their infancy, similar websites — all created by entrepreneurial financial advisers — have sprung up to help investors find or evaluate financial professionals. These sites include EvaluateMyAdvisor.com, fabeetle.com, and financeanswers.com, as well as a fourth due to launch next month. (The founders of that site prefer that it remain unnamed until the launch date is closer.) Industry leaders and advisers, though optimistic about the future of such sites, are skeptical about how much real value they deliver to consumers now. “Investors are questioning things more than ever before, so it is natural that you would see people coming up with sites like these,” said Financial Planning Association president Richard Salmen, who is also senior vice president of GTrust Financial Partners. The firm manages $400 million in assets. “Conceptually I like the idea of these sites. I hardly buy anything that I don't go out on the web and research, but what worries me about [the sites] is that it is extremely difficult to quantify or convey the overall value of what a good adviser provides, only part of which is investing,” Mr. Salmen said. Other advisers applaud the attempts, though they say that the sites need more work.
“There hasn't really been anything like this [EvaluateMyAdvisor] before; it is a good shot across the bow of our industry, but I don't see this or any of these sites as the end-all. Hopefully they will evolve,” said Dennis Nolte, a senior wealth adviser with Partners Wealth Management, which manages $90 million in assets. He said that in the case of EvaluateMyAdvisor, its analytical ability seemed a bit limited. But when asked if he would like to see similar tools available from LPL Financial, his broker-dealer, Mr. Nolte wholeheartedly agreed. “It would be great to have similar tools to allow us to be better armed and ready when discussions of performance come up,” he said. I looked at the websites mentioned; below is a brief overview and some basics about each:

EVALUATEMYADVISOR.COM

Founder: Norman Pappous, most recently a Merrill Lynch & Co. Inc. financial adviser. Inspiration: The low level of investment knowledge displayed by wirehouse advisers. Overview: Amazed by the skill of the quant jocks he worked with on the institutional side of the business, Mr. Pappous was dismayed when he switched to retail. The site is his attempt to provide small investors with an analytical approach to deciding whether an adviser is adding to or subtracting from the value of their portfolios. After inputting historic return data — or persuading an adviser to do it — an investor will get back a paper report detailing how his returns compared with a benchmark, based on the asset allocation model he had agreed to with his adviser. Cost: $500 for a performance report. Pros: This is the first attempt I am aware of to package such a service for retail investors. If nothing else, it should prompt advisers to think about how to share or better interpret and illustrate their performance to clients. Cons: This isn't a site your average Grandma is going to grasp (not yet anyway). It needs more detail and a better basic description of its mechanics. I would suggest adding two explanatory sections to the “How it Works” pages, one for investors and one for advisers.

FABEETLE.COM

Founder: Brandon Gadoci, who most recently worked for Raymond James & Associates Inc. Inspiration, Mr. Gadoci said that he was sick to death of cold calling, seminars and networking breakfasts and wanted to find a creative way to bring advisers and clients together. Overview: Once out of beta, the site will provide users with advanced-search capabilities that can match them up with advisers based on criteria such as years of experience, proximity, types of products or advice being sought, etc. Revenue will come from premium features, including tools that allow advisers to receive client query results that include them, use the platform to connect with clients and generate investment proposals. Cost: None for now. Once fully launched, premium services will cost between $15 and $30 a month. Pros: An attractive and engaging site design. It already has attracted a lot of attention through its use of social media, including Facebook, LinkedIn and Twitter. Mr. Gadoci said that the site is close to its goal of enlisting 1,500 beta users to flesh out and test its services. Cons: Reaching a critical mass of advisers will be key to the site's success.

FINANCEANSWERS.COM

Founder and CEO: Brian Robertson, an adviser with Ackley Financial Group Inc. Inspiration: The Madoff scandal led Mr. Robertson to wonder if a website where investors could find straightforward information on investing and advisers — as well as second opinions on both — could avert such conflagrations in the future. Overview: The site provides lists of investment questions and answers that can be added to by investors and advisers, who also can post their own questions. Advisers who “claim their profile” on the board — Mr. Robertson has the names and locations of 20,000 advisers and firms, gathered from various public sources — can also set up a blog and post to it once they have updated their profile. Cost: Free. Pros: The site has the potential to become an unbiased repository of investment information. It also won't hurt an adviser's search engine results if they flesh out their profiles on the site. Cons: It remains largely a blank slate waiting to be filled in by both potential clients and advisers. The site's creators deserve kudos for their intent to provide investors with a place to publish anonymous ratings of advisers. But the feature could mean trouble for the site's owners from regulatory bodies such as the Financial Industry Regulatory Authority Inc. and the Securities and Exchange Commission over potential compliance issues, not to mention from disgruntled and/or litigious advisers. E-mail Davis D. Janowski at djanowski@investmentnews.com.