Where to Search for a Financial Advisor Online
Where to find the Yelp of financial services and others.
We’re going to offer you some long- and short-term ways to make additional money. First, we’ll suggest some Websites that can help you find a reliable financial advisor and then detail an innovative new pricing program for heavy traders, from TradeStation.
Barron’s speaks frequently with financial advisors, providing insights into what they think about the markets and how they manage their businesses. But what do the clients think of their advisors? A new Website, Wallethub (wallethub.com) lets its readers take over, allowing them to search through more than 250,000 advisors in the U.S., and provide feedback about those they’ve worked with in the past.
A search through the 40 advisors who share my zip code turned up zero reviews, but that’s not terribly surprising given the recent launch of the site. Others from around the country received reviews ranging from, “A gifted financial analyst,” to “He just wants to get his commission and does not care about the customer.” Wallethub aspires to be the Yelp of financial services, with consumer reviews of banks, credit cards, and insurance companies to complement its offering on advisors.
Another site, Nerdwallet (nerdwallet.com), lets its members pose questions directly to financial advisors; members then vote on whether the answer was helpful or not. There are links attached to each advisor’s answer that let you make contact with the ones you like. The top contributors, based on how many people found their answers helpful, are listed in the right-hand column of the Ask an Advisor page. Recent questions included whether a couple was close to being able to retire (it seemed like they were, according to an advisor) and whether to pay off $58,000 in credit-card debt by raiding a 401(k) (not a good idea, said several advisors).
Many financial planners and advisors rely on word-of-mouth to find customers, though an increasing number are turning to social media. There are also sites such as WiserAdvisor.com that ask a few key questions, such as what sort of services you’re looking for and the size of your current portfolio, that match you with an advisor near you. Of course, we’d suggest you check out Barron’s many annual advisor rankings, including The Top 100 (April 15, 2013). You could take the results of a WiserAdvisor.com query and then search Barron’s rankings, Wallethub, and NerdWallet to gather more information about a potential match.
TradeStation, a sophisticated online broker for frequent traders who like to build their own systems, recently launched an unbundled equities commission structure for high-volume users. Unbundled pricing, rather than a flat fee, allows the firm to pass the various fees and rebates from exchanges and other market centers on to their customers. For those who trade a lot, it’s possible to lower costs by choosing the appropriate venue.
“Each exchange or market center charges different fees and awards rebates based on how a trader’s order interacts with the markets,” explains CEO Solomon Sredni. As a result, the trader will reap the benefit of any rebates or other discounts offered and thereby lower their trading costs. It will “give clients the ability to route their orders to the exchange or market center offering pricing that best suits their trading style and objectives,” he says.
For example, a client who trades 5 million shares per month could place a limit order to buy 10,000 shares of Microsoft (ticker: MSFT) that will add liquidity to the marketplace. She selects BATS as the destination to route the order and receives a rebate of $25 for adding liquidity. TradeStation’s commission is $20, based on her trading activity, and the clearing fee is $2. So this customer will see a $3 rebate when all is said and done. If the customer had selected flat-fee pricing, she would have paid $4.99 for this transaction.
Taking advantage of unbundled pricing requires study of the fees charged by the exchanges and market centers, as well as an understanding of when one is adding or removing liquidity. If you’re willing to do the work, you can reap the rewards.