Charles Goldman and Steve Lockshin had a moment of truth after receiving offers for funding

March 28, 2013 — 11:43 AM UTC by Brooke Southall

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Brooke’s Note: Advizent always seemed so big in its ambitions that it had a good chance of not working. But it’s too bad. It shows just how stubborn the RIA business is to efforts to develop cooperative efforts. And how unassailable wirehouse brands remain. There are some thinly veiled comments here about just who wasn’t jumping on board, and it wasn’t the advisors.

About a year after making public their efforts to create a seal of approval and consumer brand for a vast swath of top RIAs, the founders of Advizent have thought better of the idea and will discontinue their efforts. See: Steve Lockshin and Charles Goldman begin to unveil Advizent, a venture that could put thousands of RIAs under a single cooperative.

Charles Goldman and Steve Lockshin are indefinitely suspending Advizent after considering investing capital from outside sources and concluding they don’t want the effluent that comes with it. Until now, the Boulder, Colo.-based venture was self-financed by the two principals. It had considered a variety of other options involving “significant dialogue” during the last six weeks. See: Why a $2-billion RIA is embracing the idea of a $1 million annual marketing tab, and how Advizent fits in.

“Once you take someone else’s money, you have a commitment,” Goldman says.

Aggressive funding goals elusive

Advizent found that its vision of a grand cooperative formation did not get the cooperation it needed from the whole industry, according to a letter it sent out yesterday to people with a horse in the race. See: Why a $2-billion RIA is embracing the idea of a $1 million annual marketing tab, and how Advizent fits in.

“We needed to bring together like-minded investment advisors, willing to operate at the highest level of professionalism; and we knew we had to create an extensive, consumer-oriented brand that represented those standards,” Lockshin and Goldman wrote. “In addition to a significant investment of our own capital, we asked advisory firms, asset managers and custodians to come together to support the mission and help fund a significant consumer education campaign.

“Advisors were very supportive of Advizent, with more that 140 firms, representing more than $150 billion in client assets, committing to an annual audit of their firm’s fiduciary practices and to becoming Advizent members. A small number of asset managers and custodians were also in favor of our efforts. However, we ultimately could not reach the aggressive funding goals we deemed necessary to effectively reach a large number of investors and launch a meaningful brand.”

Barnaby Grist of Cetera, has known Goldman and Lockshin from his time at Schwab and wonders if they
were ahead of their time.

“This industry is so successful growing but it is still in infancy. The vast majority of assets are still in the wirehouses. I think Charles and Steve were absolutely right in their visions. They were just a little too early. We’ll see something like this come to be in the future.”

Moving on

One industry source says that Advizent may have also have begun to face some competitive hurdles — including other companies’ seeking to create a seal of approval for advisors. The source mentioned BrightScope Inc. as one contender but added that other ones are beginning to form, too. See: BrightScope sticks to its guns as it responds to outspoken critics of its Advisor Pages.

The letter summed up Advizent’s resolve to shut down this way: “Despite our deep and continued commitment to the cause, after much consideration, we have concluded that we simply are not comfortable raising investor dollars or continuing to fund the effort personally without more significant advisor and industry support.”

Lockshin continues to work with the $10 billion RIA he formed, Convergent, and Goldman is going to focus, for now, on his consulting work. He allows that he is now able to widen his search for a next career opportunity beyond his current hometown of Boulder now that his daughter has graduated from high school and his son is nearing that point.


Mentioned in this article:

BrightScope, Inc.
Data and ratings for RIAs



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Dave Welling said:

March 28, 2013 — 5:09 PM UTC

I think the industry should thank Charles, Steve and their team for taking on a critical topic but also a daunting challenge. The RIA industry has grown significantly, yet advisors continue to cite marketing and growth as their biggest challenges. Combine that with investors who are at best confused about the differences between advisors and at worst still massively distrustful and skeptical, and this was a great idea and still something the industry needs to grapple with. This leaves the education and category development in the hands of custodians and associations. Hopefully they will continue to advance their education efforts or (in time) change their stance on supporting an effort like this that would have benefited all.

Best of luck to Charles, Steve and the team… hopefully you will find other ways to help this great industry.


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