FintekNews is pleased to feature our fourth interview in our weekly feature – 3 Questions. Each week we will profile a different fintech thought leader, and ask them to answer just 3 questions for our readers, in their vernacular. This week, we’d like to introduce you to fintech entrepreneur Brandon Spottswood, who has launched a new fintech for investment advisors.
Founder & CEO
What does your firm do/offer within the fintech sector?
We like to say “We are Navigating the World’s Wealth in Motion Through Advisors.”
Everything we do connects the financial services industry like never before. We believe there is a better way to connect to opportunities, empowering advisors to maximize their money making potential by leveraging technology to share what they’re looking for within the industry. We call it AdvisorBid™.
Connecting to opportunities and transitioning in the financial services industry prior to AdvisorBid generally originated as referral from a friend within the industry, or exposure to a company’s marketing through advertisements. While word of mouth will always be one of the greatest marketing resources, it’s only a drop in an ocean full of opportunities available for advisors.
Therefore, we created the FIRST and ONLY patent-pending company to automate financial advisors’ transitions through a social media marketplace. How we do this is by converting each Central Registration Depository (CRD) # at FINRA and each Central Index Key (CIK) # at the SEC to become a tradable commodity, indubitably becoming the first Multiple Listing Service (MLS) exchange for the financial services industry in the world.
What do you believe the next major innovation in financial technology will be and why?
We believe AdvisorBid is the next Uber, AirBnB, or LendingTree. We’ve consolidated the preliminary due-diligence process on behalf of the major leading broker-dealer and RIA networks in the country under one platform.
We now have more agreements with leading broker-dealers, RIAs, and advisor resources than any firm in the country.
What are the biggest problems facing the fintech industry in the future?
Specifically in financial services, the DOL Fiduciary Ruling is causing widespread consolidation. I call it the DOL Tsunami.
I believe we are witnessing the greatest consolidation of broker-dealers in the history of financial services, since the beginning of our industry. The DOL ruling is expected to force consolidation of nearly 4,000 broker-dealers to just hundreds that are able to accommodate the new ruling.
John Rooney of Commonwealth Financial Network on why he sees consolidation in the advice industry in the wake of the U.S. Labor Department’s fiduciary rule, and says advisers must be ready to adapt to a new fiduciary environment. “Could (consolidation) be 50%? Sure,” said Mr. Rooney. “What’s the cutoff of viability for an IBD, $50 million or $75 million in revenue? There aren’t that many firms at that level, less than 100.”
The First Ripples: You’re already seeing the first ripples occurring. Many small broker-dealers have already begun looking at their options. Some recent acquisitions have already occurred in the past couple months, and many more to occur very soon.
The First Wave: Due to increased compliance and regulatory, costs, $10M annual revenue broker-dealers will inevitably merge into one of the top couple hundred broker-dealers now after the DOL has been released.
The Second Wave: $10M-$50M annual revenue broker-dealers will try to fight the current like a salmon swimming upstream. The DOL, SEC, and FINRA could potentially use these broker-dealers as examples, forcing them to sell or merge with a broker-dealer generating $50M or more, that can survive the wave of the DOL ruling.
The Third Wave: Any broker-dealer around the $50M in annual revenue mark will feel the pressure and will consider opportunities to merge into the top broker-dealers due to economies of scale. It will be interesting to see how everything plays out over the coming months and years.
We believe that with every change, there is opportunity, and we’ve created AdvisorBid™ so broker-dealers, RIAs and advisors can take advantage of the DOL.