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Finding the Right Advisor

In recent years, an increasing number of fintech referral platforms have been created to help investors find the right financial advisor. Examples include SmartAsset, Wealthramp and Positivly. These platforms ask prospective investors a series of qualifying questions, then align these investors with advisors who ideally are equipped to serve them.

In most cases, questions focus on the basics: age, income, investable assets, risk tolerance, retirement focus, comfort with and knowledge about investing, service requirements and location. However, some firms are trying to create more nuanced prospect profiles that will allow for enhanced alignment with advisors and ultimately a deeper advisor/client relationship and more customized client experience.

Positivly, for example, bases its referral service on what it claims to be the “world’s first financial personality test.” The test probes deeper into prospect’s psychology as it relates to investing, focusing on four primary components: 

Purpose  to what degree the investor is motivated by a deeper sense of meaning or purpose
Security – to what degree investments are made to provide physical security and peace of mind
Touch – how investing is tied to meaningful relationships
Viewpoints – how investing serves a need for intellectual satisfaction of getting things right

Unfortunately, Positivly offers little information regarding the scientific basis for its approach. However, we believe the firm is representative of a trend in fintech to develop richer and more meaningful client profiles. These move beyond simple risk tolerance to more behavioral models that can be instructive in client management, service, investment selection and portfolio creation.   We keep an eye on these referral firms to track innovative developments in their approaches to client profiling and to measure their success as viable referral engines for advisors.