AdvisorHUB, a year-old gossip and news Web site for the brokerage industry, has become such a part of brokers’ daily reading routine that some call it the “New York Post of financial news.”
The Web site’s founder, Andrew Parish, said the site has 200,000 registered users and gets half-a-million unique hits per month. It has posts that range from subjects like what the biggest brokerages are offering new hires to a rumor from readers alleging that Bank of America Corp’s Merrill Lynch is not throwing holiday parties this year.
The site does not generate profit: It is free, and an app that Parish wanted to sell for US$9.99 a month failed. However, unbeknownst to many readers, Parish has reportedly collected detailed data about what brokers read on the site and tried to sell that information to major brokerage firms, saying that they would be able to tell such things as whether a broker was looking for another job.
In presentations to Morgan Stanley, Merrill Lynch and UBS Wealth Advisors in July, Parish offered to sell the information for as much as US$120,000 a month, according to sources who attended the meetings and a review of his presentation.
Parish told these firms that he had a scoring system — from 1-to-10 — based on what brokers were reading on AdvisorHUB that he claimed would predict adviser’s moves, according to the sources and his marketing materials.
He also offered to give “consideration” to coverage for any firm that bought the service, which sources said they understood to mean favorable articles.
Parish said that his approach when deciding what to publish in the rumors section is: “There is a grain of truth in everything.”
He said he and his staff of eight people check anonymous tips with two or three other sources until they are satisfied it is worth publishing. He said he fields up to 400 e-mails and 100 text messages and telephone calls daily from tipsters.
In interviews with reporters, Parish, 40, confirmed that he had offered to sell the data. None agreed to buy, he said. He did not rule out trying to sell the data again and plans to launch a section on the site with some of the analytics about overall use.
“Individual financial advisers are the geese that continue to lay golden eggs, and they want to talk about how well or how poorly they are being treated at their particular firms,” Parish said. “Advisers are comfortable talking to us because we make them completely anonymous.”
While many Web sites track their readers, the potential that data gathered by AdvisorHUB could end up in the hands of recruiters and brokers’ employers could roil the highly competitive world of financial advisers.
Attracting and retaining brokers is a big issue for wealth management companies, which can watch millions of US dollars of assets walk out the door if a broker takes his clients and leaves for a rival firm.
Parish said he realizes that AdvisorHUB would face “reputational risk” if he sold data about brokers. He added that several firms reached out to him first, asking for meetings to discuss this data.
“When you’re getting these phone calls from these global financial firms and you’re a small Web site, for us it was like, ‘Woah!’” he said.
UBS and Morgan Stanley denied that they contacted Parish to find out about his data-selling service. Several sources at Merrill said that representatives of the firm reached out to Parish after hearing he was meeting with other brokerages.
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