Executive Summary
A new campaign is underway to help promote the visibility of independent RIAs to the general public. But the focus is not to increase awareness of the differences between RIA and broker/dealer compensation, nor to explore the fiduciary versus suitability debate. Instead, it's simply to convey the message "We exist."
The effort is being launched via the website OneVoiceRIA.com, established by steering committee members Gobind Daryanani, Paula Hogan, Chris Cordaro, and Tom Orecchio. The purpose of the site is to bring together and raise funds amongst independent RIAs (and the institutions that support them), to retain a major marketing firm (Global Strategies). The focus of the marketing firm will be to help develop a campaign (including a logo and tagline for member use, and eventually a broader advertising/PR outreach)to promote consumer awareness that RIAs are an option to consider when consuming financial services. In essence, the hope is to bring together the large quantity of small, independent firms, which individually cannot achieve hte critical mass for a significant marketing campaign ,but who might be able to penetrate more effectively by operating as a unified group.
Of course, OneVoiceRIA is not entirely unique in its efforts to promote awareness in pursuit of improving the quality of financial services delivered to the public. Both the FPA and NAPFA, albeit with somewhat different messages with respect to compensation, promote the importance of competent, ethical, client-centric financial planning. What makes OneVoiceRIA unique is its focus on the independent RIA, and its focus on a pure "we exist" awareness message - in other words, to make the point to the general public that there are really three options for financial services: do it yourself, broker/dealers, and RIAs.
In exploring this basic issue - consumer awareness that RIAs even exist - the founders of OneVoiceRIA retained surveying firm Discovery Data to evaluate the issue. Their survey results indicated that only 16% of high-net-worth investors are even aware that RIAs exist, and this provides the benchmarking floor for OneVoiceRIA to evaluate its success. OneVoiceRIA hopes to increase this awareness to 50% within 2 years, repeating the survey every 6 months to monitor developments along the way. When the target is achieved, OneVoiceRIA will close shop.
The OneVoiceRIA website, which requests a modest $25 subscription to be a supporting member, is off to a good start with upwards of 275 members, and there are rumors that some larger corporate partners may be getting involved as well (think: RIA custodians). But at the end of the day, people rally - with both their energy and their wallet - around a vision that they can embrace. Does OneVoiceRIA have what it takes? The jury is still out so far, primarily because OneVoiceRIA hasn't yet determined exactly what its central message will be.
Of course, the OneVoiceRIA founders are upfront that they haven't yet determined exactly how to deliver the message - that's the purpose of retaining a quality marketing firm in the first place. But in pursuit of their goals to achieve awareness and to avoid a negative us-versus-them style campaign, it's not really clear how the group will communicate the point of an independent RIA in the first place.
For instance, discussing the difference between a fiduciary versus suitability standard of care - often the anchor point for RIA firms extolling their virtues to potential clients - is apparently off the table because of its divisiveness (and perhaps its risk of alienating larger corporate sponsors for the effort who happen to have roots in both the RIA and broker/dealer marketplaces?). Likewise, discussing the differences in compensation methods between RIAs and broker/dealers is apparently not going to be a focus. A major anchor point appears to be that RIAs are "independent" (implying a certain level of objectivity), but this message too is muddled - after all, many major broker/dealer wirehouses also run RIAs, but I don't think OneVoiceRIA intends to emphasize their objectivity just because they're an RIA.
Instead, the focus really seems to be that independent RIAs are... well, independent RIAs. But is being an independent firm itself a differentiator? Arguably, there are many independent broker/dealer-based financial planners who run their practices as objectively and independently as any RIA does. The OneVoiceRIA website also have videos which explore RIA differences further, and seem to make the point that many RIAs also seem to deliver a different (i.e., better?) quality of customer service and depth/sophistication of investmnet service, but again so do many non-RIA-based firms. And of course, none of this addresses the act that many RIAs provide purely investment management services (which is, of course, the regulatory-defined purpose of an RIA), even though OneVoiceRIA's purpose appears to be squarely oriented around the RIA as a wealth management/financial planning provider, not just "being an RIA."
So the essential question still remains: If the goal is to promote the existence of independent RIAs as an alternative option for the consumer in search of financial advice, what distinction(s) will OneVoiceRIA make to illustrate why any consumer would actually consider such an alternative? Can the effort be successful in altering consumer behavior if it really ends at a simple message of just "we exist"? And how will OneVoiceRIA create a focus around awareness of RIAs, with their tremendous breadth of service and business models, without blurring the lines between the similar breadth of service and business models that the broker/dealer community offers?
Of course, OneVoiceRIA doesn't have the answer yet to how its message will be crafted. In fact, raising money and hiring a marketing firm for this work is part of the point. But it still begs the question - with an admittedly admirable goal to maintain the high ground and not lead a campaign that could be construed as "negative," will the message be too ambiguous and watered-down to inspire the support necessary to reach critical mass in the first place? Or alternatively, might the group's message evolve so far in the direction of the fiduciary nature of RIAs as a point of distinction that ultimately it simply overlaps with the focus of NAPFA?
Only time will tell, and some people will likely wish to wait for more detail about what the OneVoiceRIA message will be before committing. But you can get more information by emailing [email protected], going to their website, or by clicking here for an information sheet, and if you're ready to pledge your financial support, go directly to their "I Support" registration page.
Michael, thanks so much for bringing stuff like this to the attention of the financial planning community through your blog. You are often the initial source for topics that I might not have otherwise become aware of, and this is one of them.