Advisor Matching Service Introduced
July 19, 1999
More than a dozen mutual fund firms and broker/dealers are backing an effort to match investors with financial advisors using a popular Microsoft Corp. website.
Microsoft of Redmond, Wash. and Dalbar, a mutual fund research firm in Boston, have developed a website service through which investors can complete an online questionnaire about their personal preferences in an advisor, their financial needs and risk tolerances. The investors then receive a list of financial advisors who match their profile. The advisors, then, if authorized by the investor, are given information to contact the investor.
Microsoft introduced the site, known as the Advisor Finder Service, July 14 as part of its recently-revised personal finance website, www.moneycentral.com. Ed Graczyk, lead product manager for Moneycentral, said the new site will be tested online for approximately one month as http//beta.moneycentral.msn.com before it is introduced in its final form. The service also is available at www.TheRightAdvisor.com.
Moneycentral has approximately five million visitors a month, according to Microsoft. Approximately 3,000 financial advisors will be listed on the site, said Graczyk and Louis Harvey, president of Dalbar. The advisors using the site are a mix of wirehouse representatives, independent financial planners, insurance agents and accountants, Harvey said.
The advisor finder service "is a way of driving traffic to the advisor," Graczyk said.
Harvey was the publisher and Dalbar was the owner of Mutual Fund Market News until it was sold to Securities Data Publishing in 1998.
Executives at Microsoft and Dalbar said there was a revenue-sharing arrangement between the companies for Dalbar's participation on the site. They declined to provide details of the arrangement.
Although lists of advisors are readily available online, Harvey and Graczyk said the web-based system which Moneycentral will use is unique because advisors listed on the site must meet minimum standards set by Dalbar, an independent firm which rates mutual fund and broker/dealer services. The Advisor Finder Service also is unlike other Internet services because it includes advisors from a variety of companies with varying professional specialties, Harvey said. Financial services firms and professional organizations frequently will match a visitor with one of their own intermediaries through their websites.
Dalbar's minimum standards for advisors participating in the Advisor Finder Service include a requirement that advisors have at least five years experience in the profession. Dalbar also reviews advisors' disciplinary records on file with regulators. The company disqualifies advisors who have been the subject of excessive customer complaints or a regulatory action. Dalbar charges advisors $750 to be listed. Mutual fund companies such as Fidelity Investments of Boston, Strong Capital Management of Menomonee Falls, Wis., the Kemper Funds unit of Scudder Kemper Investments of New York, and Warburg Pincus Funds of New York, are among those supporting the Advisor Finder Service by paying the costs of advisors to be listed on the site, Harvey said. Mutual fund executives said they were backing the site to promote sales through intermediaries by creating good will among intermediaries and investors. Advisors are not required to sell the funds of their sponsor as part of the arrangement, executives said.
"We think it's a good project," said Jody Lowe, a spokesperson for Strong. "It seems like an innovative tool." Lowe declined to disclose the number of advisors Strong intended to sponsor for participation in the Advisor Finder Service.
The Internet has been the means by which do-it-yourself investors obtain financial services. In the future, however, the web will attract others besides do-it-yourself investors, mutual fund executives said.