BrightScope Rolls Out Adviser Database

The company’s new “Advisor Pages” database includes about 450,000 advisers today, but Mike Alfred, co-founder and CEO of BrightScope, told PLANADVISER that in a few months, that number could be up to 600,000, and in the longer term, Alfred estimated that the database could include more than a million names, once state-registered insurance professionals are added.   

Considering the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Industry (FINRA) already have databases with adviser information publicly available, it has been asked why BrightScope decided to undertake this task. Alfred said that the primary reason for launching Advisor Pages is that from an investor perspective, adviser selection is not being made based on quantifiable data – rather, referrals from “golf buddies” or similar situations.

When someone gets such a referral, Alfred said the investor really doesn’t know anything about that person – is he a fiduciary? Or a broker? What is his performance history? “You want to higher on skill level, but you don’t always know what that is,” he explained.

If an investor tries to do a Google search based on a referral, neither the SEC nor FINRA databases are shown in results, he pointed out. Those databases are not indexed, he explained, preventing search engines from trolling through their data.

“It’s not that those sites aren’t useful, just 95% of people could never find them,” he said.

Advisor Pages compiles data directly from publicly available sources, including required regulatory filings from the SEC. Information such as assets under management, fee arrangement, client types, experience, and employment history will be outlined (however, not all of this information is available yet for every adviser listed, as BrightScope continues to add information). 

He expects most advisers will see value in Advisor Pages. However, the database will also include “red flags,” such as whether the adviser has any disclosed conflicts of interest, whether he or she maintains custody of client assets, or if any formal complaints have been filed against them. For those advisers, Alfred expects “irrational anger” to be voiced. But he says BrightScope is prepared for that. In fact, the company has brought in a new in-house general counsel, specifically to handle any backlash from the database.

“We’ve done it before with the 401(k) rating system introduced in January 2009,” he said. “It’s the first time they’re totally exposed to the world. We’re ready for any negative response; it’s not driven by rational thought. We can be patient with them, but won’t cave to their demands.”

Advisor Pages is free for public use. Advisers listed on the site can pay a monthly subscription fee of $100, or $250 for a firm, in order to add a description of their business, post links to other Web sites and to insert a headshot or company logo to their profile. The database is accessible here.