RIA Organization Advizent Taking The Future Of Fee-Only Advice Into Its Own Hands Hot

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The new group, called Advizent, just launched a few weeks ago to significant acclaim, but maybe a little confusion as well.


First, Advizent isn't another RIA "aggregator." They're not in the business of buying up market share in order to gather consolidated scale in the industry.


If anything, founders Steve Lockshin -- of Convergent Wealth Advisors and Fortigent -- and custody king Charles Goldman seem to be pursuing a more traditional collective bargaining approach.


They want to promote RIA status as a "brand" in itself, create channel-wide marketing programs, and even look into deals on large-group E&O insurance.


There's even talk of a "Good Housekeeping seal of approval" certification program, which might bring in parallels to groups like the CFP Board of Standards and similar accreditation organizations.


Nobody's mentioned it, but it would be nice if Advizent becomes a way for RIAs to wield more collective muscle in Washington as well.


FINRA and FINRA-regulated advisors have plenty of lobbying power and have made their needs fairly clear. But in the flurry of distinctions between "fee-only," "fee-based," "fiduciary," and "independent," the crowd of RIAs has struggled to put together a similarly coherent set of talking points.


As far as Lockshin and Goldman are concerned, RIAs also need to market more coherently to the public. They say that as long as most people aren't familiar with what exactly differentiates an RIA rep from a broker or other advisor, growth in the channel will be less than optimal.


That's why they're building their membership base now. They estimate that it will cost $100 million to build the kind of awareness for the RIA "brand" that they want.


So far, so good. They've apparently gotten around 20 firms -- including Lockshin's $10 billion Convergent -- to sign up early, putting a $50 billion swathe of the industry under their umbrella.


They're hoping for a starting mass of about $200 billion in member AUM to give the group the heft they want for future scaling and give members plenty of value for the $25,000 to $100,000 in fees they'll eventually pay. 


Speaking of scale, that $200 billion would represent maybe 56% of the estimated $360 billion that Cerulli says is currently shared among around 25,000 RIA registrants.


Getting that kind of buy-in from what would amount to the biggest firms in the channel would be almost unique in industry history.


As it is, if they've got $50 billion on their team, that's a healthy 15% or so of the RIA business signed up right there.


Remember, all RIAs put together still only manage 3% of the roughly $12 trillion in high-net-worth assets out there, and that's after the stratospheric growth of recent years.



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