A new site, fabeetle.com, launched yesterday amid some fanfare in the brokerage community with a beta launch soliciting participating amongst advisers. fabeetle attempts to tackle a huge problem in the industry: matching financial advisers (FAs) with potential clients looking for the right ones. While it’s becoming infinitely easier to buy products over the Internet, a lot of inefficiencies exist in the financial adviser market. Buyers of such service are typically relegated to local professionals who have been recommended via word of mouth.
In the audio interview below, founder Brandon Gadoci, says that financial professionals need new clients more than ever after what we experiences over the past 12 months. Old marketing techniques like cold calling, networking breakfasts, financial seminars, direct mail, etc. return .5%-2% depending on the skill level of the FA. Referrals, in light of all these inefficiencies, are still the way to go to build bigger practices. fabeetle doesn’t want to hold the FA hostage — it’s not a pure lead generation site like others in the space. Gadoci says, “There is no way right now to reach out beyond immediate social circles to see if a particular adviser is right for me.”
So, we’re talking consumer generated content that allows clients to describe, rate, discuss financial advisers all in an attempt to create a community to share this type of information. Gadoci claims that the platform is not a social network but rather part of a larger trend of c0nsumers going online to research an offline purchase. You can also check out Russ Thornton’s overly positive review of fabeetle.
Beyond the reasoning behind creating a system like this (huge wealth transfer to baby boomers reaching retirement), all parties on different sides of this transaction recognize that the current way we shop for these types of services is antiquated.
That said, sites attempting to matchmake FAs and investors haven’t been overly successful. I think this lack of success is due to a couple of reasons:
- unidirectional usability: it’s just plain boring to go onto a site with limited content and functionality to shop for services in general, let alone for financial services. If there isn’t bi-directional activity enabling users to read and contribute as well, these sites generally lack any umph.
- pure traffic aggregation: Others have attempted to aggregate consumer traffic/attention by providing educational materials or by successful advertising. In turn, like Lending Tree, this lead is auctioned off to advisors. Advisors lack the tools to see how much that lead is worth and are too far away from the lead-gen process to really pay too much attention to this.
- unclear value proposition: Of course, everyone would like an extremely transparent market and efficient transactions but it’s unclear to me and the rest of the public how these matchmaking sites help me do this better, both as a consumer and as an FA.
It will be interesting to see how fabeetle addresses a couple niggling issues:
- comments/reviews: successful sites provide an equal amount of positive and negative views on products. Too much skewing towards the rah-rah, I love my adviser, would tank the objectivity of such a system.
- approbations: Currently, there are major problems with publishing client approbations – So and So recommends X is a no go. It sounds like fabeetle has a compliant solution for this, so will be interesting to see how that plays out. Check out the problems posed by LinkedIn for financial advisers.
- convincing early adopters to use the system: What’s the incentive to get early adopters in and comment on FAs? As an FA, do I want my profile up in party without any partygoers?
I haven’t seen the system, so I can’t really comment on it specifically but I’m interested in seeing if this ambitious project has real legs or not. I do feel like creating a marketplace for services doesn’t have great prospects. We don’t have a lot of concrete examples for other B2C services that show online marketplaces work. eBay works but that’s for mainly for products. With bundling of financial services, not unlike telecommunication services, it’s so hard to make apples-to-apples comparisons that lead to a transaction.
I tend to think that advisers can more effectively market themselves by going it alone and spending a little time and forethought to create a good content marketing strategy. RIA Sean Hannon’s doing it but what do I know?
Check out the interview below Russ Thornton on Advisor Blogger.
