Chicago-based Family Office Exchange today unveiled its new directory of “leading wealth advisors,” a list of firms the association says have been screened for their ability to provide “integrated wealth advice to private investors with over $20 million in assets.”

Competition for the notoriously elusive ultra high net worth client just got harder.

Chicago-based Family Office Exchange today unveiled its new directory of “leading wealth advisors,” a list of firms the association says have been screened for their ability to provide “integrated wealth advice to private investors with over $20 million in assets.”

Competition to get on the list, believed to be the first of its kind for the UHNW market, is expected to be fierce. “This is something that was 100 per cent needed, and it will be a very big deal to get on it,” said one senior wealth management executive, who asked not to be identified.

“This is risky to some degree for FOX as they don’t want to spurn any advisor firm that might currently be a member firm or aspire to be a member firm,” said industry consultant Jamie McLaughlin, “but as a service to families, FOX’s primary constituency, the directory is true leadership.”

The directory is debuting on FOX’s website and www.leadingwealthadvisors.com with 30 firms, although FOX founder and chief executive Sara Hamilton said she eventually expects over 100 firms to be listed.

Firms do not have to pay to be listed. However, FOX members who are on the list receive a four-screen profile for free. Non-member firms with less than 50 employees must pay $4,000 for the "extended" four-screen profile and firms with more than 50 employees must pay $6,000. All firms  on the list get a "basic "one-page profile for free.

Criteria

Firms who qualify for the directory must meet ten criteria, measured by over thirty metrics, according to the association, including financial stability, senior management turnover and commitment to multi-generational needs.

The size of a firm’s assets, the sole criteria for many lists of wealth management firms, is not among the FOX criteria. But the association does review the firm’s investment management process, the diversity of its investment products, and regulatory and financial compliance.

McLaughlin said he was particularly impressed that some big name firms on FOX’s exclusive (and expensive to join) Thought Leaders Council were not on the Leading Wealth Advisors list.

“The criterion FOX is using appears rigorous and fair,” McLaughlin said, “and the fact that some notable firms on their Thought Leaders Council were not included shows they have met at least one very visible sniff test that this initiative is not a ‘pay-to-play’ standard.”

“No resources that weren’t based on size”

The idea for the directory originated at a course on private wealth Hamilton teaches at the University of Chicago for individuals with $25 million or more in investable assets.

“At the end of the course people always come up and say ‘Where do I go to look for qualified wealth advisors?’” Hamilton said. “And there were no resources out there that weren’t based on size, which only tells you how good the firm’s marketing has been.”

FOX’s goal was to educate consumers who were finding that wealth management firms “all sound the same,” Hamilton said.

“They were not familiar with the nuances to tell the difference,” she said. “Someone said – and I think it’s true – it’s easier to get selection criteria for a refrigerator than it is for a wealth advisor.”

The value of the directory and the information available to consumers goes beyond matching up clients and firms, Hamilton contended. “A more educated prospect makes a better client, and a smarter client looks for a better advisor. And a better advisor looks for a smarter client.”

Steve Barimo, chief marketing officer for GenSpring Family Offices, one of the firms on the FOX list, agreed.

“We believe the key to sustaining family wealth is education - providing families with the tools they need to make informed decisions around their financial lives,” Barimo said. “FOX’s directory of advisors offers families just that - information they can trust about advisors and service providers in the family office industry. We’ve always valued our relationship with FOX and being included in the directory goes hand in hand with our mutual philosophies.”

Mass affluent directories

Although the FOX directory is new for the UHNW market, the concept has already caught on in the mass affluent market, albeit mostly with a pay-to-play orientation. Established web sites matching prospects with advisors include the Paladin Registry of Financial Professionals, WiserAdvisor and BrightScope Advisor Pages.

The latest entry in the market is AdviceIQ.com, which is syndicating original content to web sites such as Motley Fool and Philly.com, in hopes of driving readers interested in finding an advisor to its listings.

“The vast majority of investors do not search the web for advisors,” said Nicholas Stuller, president and chief executive officer of parent firm Meridian-IQ. “Our model is not a destination site but to syndicate articles and listings to partner sites.”