With 10,000 people retiring every day, most of whom have never engaged a financial adviser, Rick Cross, 58, decided to create for the financial industry what Match.com did for dating: a way to electronically pair financial advisers with investors. His company, Right Financial Advisor, was formed three years ago and the online matching service launched last year.
It asks potential investors 20 to 40 questions and matches them with two vetted advisers. If they aren't satisfied, they can get two more. The service aims to match the needs and core beliefs of the investor with the skills and outlook of the adviser. Matching is free for investors; advisers pay to be included.
Cross, a 34-year veteran of the financial service industry, said when people are left to their own devices, "they tend to buy high and sell low." But if they're matched with an adviser they can trust, they'll be more likely to max out on 401(k)s, create a budget, and put away enough money. "What we want to do is create that right relationship," Cross said.
What criteria do you use to match advisers and investors?
Our first mandate is to make sure we've matched the core financial needs and the financial competencies of advisers. It's specialized. So if you say you're a specialist with corporate executives, there are challenge questions you must pass in order for the computer algorithm to assign you to those executives.
How do you formulate those questions?
It's based on my 30-plus years in the industry. The questions for corporate executive advisers, for example, might be on deferred compensation programs, stock options, the old golden parachute type of things. Then we further refine it by asking personal questions and certain personal attributes. For example, we just matched a widow in New Jersey with a female adviser who's in her 50s, who speaks fluent German.
What should a person be asking their adviser?
What are you going to do? How are you going to do it? When are you going to do it? And how do you get paid? We also recommend that all investors, before they engage the services of financial advisers on rightfinancialadvisor.com, go on to FINRA BrokerCheck and look at their record and vet them, too. We do that, but we encourage our clients to do that as well.
Are you a registered investment adviser? How do you construct a plan for a client? How often do you change that plan, rebalance that plan? Are you a fee-only adviser? Do I pay you on a commission? Do I pay a flat fee? Tell me about a similar situation that you have with a client like me. What have you done for them? It's not about putting a nice brochure in front of somebody.
Have you eliminated any advisers who have signed up for this program?
Absolutely. We check their regulatory requirements . . . If I see that there have been many marks on their record, with FINRA, the SEC, or the state, we will not allow them on the platform. And we periodically check up with investors by email.