Love and Money

If you like piña coladas, getting stock tips in the rain

Lee Carter, a partner at the New York City-based messaging and branding firm Maslansky + Partners, recently used a dating site to try and find that someone special who was missing from her life. That's not an unusual approach to dating for a young urban professional in an era of, eharmony and Tinder, but who Carter was looking to be set up with might come as a surprise: a financial advisor.

"I'm a young professional who has not gotten the full service I expected from brokerage firms I signed up with over the years," Carter said. "It was appealing to me," she said about GuideVine, an online platform created last year to match investors with their Mr. or Mrs. Right Advisor.

Mike Kemp | Getty Images

Raghav Sharma, a former McKinsey & Co. consultant, founded GuideVine after an engaged couple he was friends with struggled to find a financial advisor they liked.

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The traditional network of family-and-friend referrals didn't work for Sharma's couple—little better than a blind date offering a slim chance of connection. A Google search of financial advisors was just as bad, leading to cold calls and a series of meetings, but 9 out of 10 of the advisors ended up being completely different than what the couple expected—and not in a good sense.

"Our whole mission is to get people to find advisors that they ... can see themselves talking to for hours about their financial future," said Sharma, GuideVine's CEO.

The only evaluation they were doing was on accumulation and how much business the advisor was bringing in. We realized that if this was the gold standard of how to do it, then something is broken.
Dave Gomel
co-founder of Finom, on how financial firms promote their brokers

"GuideVine is the next iteration of 'I'm looking; you're available; let's get together,'" said Trow Trowbridge, an advisor at Reston, Virginia-based Dominion Wealth Management, who has a profile on the site.

The online dating model is also an efficient marketing machine, saving an advisor the cost of mass-mailing brochures that often lead nowhere, as well as an advisory firm investing in a dedicated sales force.

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The potential for this disruptive model in what's always been a slow-to-adapt financial services business also caught the attention of Dave Gomel and Aziz Lalljee, two University of Chicago School of Business graduates. They co-founded Finom last year after swapping horror stories about advisor referrals they had received from friends and family. "We thought this was the gold standard for how to find an advisor, and then we had these terrible experiences, where we had risks on the table that we didn't think should be taken," Gomel said. "It was a big disconnect."

They also said the big brokerage firms were going about screening "top" advisors in the wrong way. "The only evaluation they were doing was on accumulation and how much business the advisor was bringing in," Gomel said. That 's one reason why many younger professionals, like Carter, have not yet accumulated enough wealth to appear on the radar of brokers. "We realized that if this was the gold standard of how to do it, then something is broken," Gomel said.

Long walks on the beach, with your advisor

Like dating websites, the advisor platforms use an initial questionnaire to gather information about the user. An investor can input the services desired—i.e. investment management, tax planning, estate planning. They can add more specific information, including income, risk tolerance and investment time horizon. Or even more specific sub-categories, like alternative assets, socially responsible investing, an advisor who specializes in small businesses or advising women.

Once the proprietary algorithms match them with a list of advisors, it's up to the investor to make the first move by emailing, calling and, ultimately, if they want, meeting in person—all free of charge to the prospective investor.

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If GuideVine is hoping that an investor and advisor "click" on any one of a number of shared traits and interests, Finom is a matchmaker that wants to get to the heart of the matter quickly. It's designed to screen advisors based solely on their performance history and area of expertise. It requires advisors to provide client level holdings information across all their portfolios so an investor can judge whether they'd be better off breaking up with their current advisor.

"We give them all our data, and they rip through our trades to look at our performance," said John M. Nowicki, president of Chicago-based LCM Capital Management and a Finom user who had tired of endless rounds of cold-calling or buying leads for potential clients from 401(K) plans.

"I've been in this business for over 20 years, and I have never seen anything that gave investors this sort of accessibility in an objective way," said Dan Timotic, an advisor at Naperville, Illinois-based T2 Asset Management.

She was really listening and trying to get to know me. People want to feel like the advisor is taking time to understand who they are.
Lee Carter
executive at Maslansky + Partners and a GuideVine user

Trowbridge said it's technology like GuideVine that can, ironically, offer a more human connection, specifically through videos that advisors post on the site in order to explain their investing philosophy and to exhibit more basic elements of their style.

"It's not about their résumé, but what makes them tick," Sharma said. "What they are good at, what types of clients enjoy working with them, and a little about their background that people may not know," he said.

Sharma said the videos are the first thing users click on—11,000 videos have been viewed on GuideVine and 2,000 on its YouTube channel.

After viewing many videos, Carter spoke with six advisors and then narrowed her search down to the two she liked the most. One was based in New York City, and one was not. Carter ultimately chose the non-New York based advisor because she felt a better connection. "She was really listening and trying to get to know me," Carter said. As on a date, "people want to feel like the advisor is taking time to understand who they are," Carter added. (She also travels a lot for work and therefore felt less need to have a local advisor.)

"People say they watched the video and liked the message, and that is why they are calling," Trowbridge said. "I've gotten clients because of the ability to converse. Relationships with clients will live through periods of poor performance, as longs the clients are getting listened to."

Turning the date into a relationship

More than 2,000 people a week view GuideVine, and about 40 percent of advisors on the site have met with at least one prospect. Top advisors have met with 12 to 15 prospects. "It takes a while to make a successful match," Sharma said.

GuideVine couldn't share aggregate data on the conversion rate—turning a prospect into a client—but the company checks in with advisors periodically. Some have secured one out of every three prospects; others none. Some advisors have chosen not to share the information with GuideVine. Sharma noted that converting a prospect to a client can take anywhere from six months to a year in the advisory business. Trowbridge said he's yet to convert the leads that contacted him as a result of his GuideVine videos.

Alexandra Cock, an advisor with San Rafael, California-based WealthPlus, said GuideVine gave her a much-needed push to develop more media content. She said the initial fee GuideVine charges pays for itself because it includes GuideVine staff coming in person to produce a series of videos with the advisor. "That helped us get over the hurdle of getting them done," she said. But she added that while her profile and videos have received a lot of traffic, only limited inquires about advisory services have been received so far.

T2 Asset Management has seen a couple referrals from Finom and thinks they will continue to come in. Because Finom only charges a fee based on any assets under management gained through its platform, Timotic is happy with the results.

Lalljee said the company, which launched last May, "is just in the beginning stages of seeing the introductions come to fruition." There were no deals to cite yet between advisors and prospects.

The details

Where you can online-date an advisor
Guidevine has started offering access to advisors in the New York City area but has expanded to San Francisco; Washington, D.C., and surrounding areas; Los Angeles and Orange County and is currently in the beta-test phase in Philadelphia and Florida.

Finom offers access to advisors only in the Chicago area but is looking to expand nationwide in the near future.

Who pays for what
Investors using these sites to find an advisor pay nothing.

The GuideVine service is subscription-based. Advisors pay a one-time onboarding fee of $200-$600, which covers due diligence and varies based on how involved the company is in script development and advisor video shoots. There is also a service charge, which is either paid as an annual fee of $1,800 or a quarterly fee of $900 (100 percent of advisors are on the annual plan).

Finom doesn't charge the advisor until a match has been made. Then it receives between 10 and 20 basis points annually based on the advisor's assets under management gained through the service.

Blocking advisor bad apples
GuideVine prescreens advisors based on minimum size (number of clients and assets) and experience requirements, as well as conducting its own due diligence checks. The advisors prescreened by the platform manage $30 billion in assets.

Finom does its own reviews of the firm and its key people, as well as background checks on all the advisors. Advisors on its platform manage a total of roughly $3 billion in assets. Advisor searches on Finom to date represent $85 million of investor assets.

Reviewing the advisor
GuideVine sends users a post-meeting survey in which they can rate an advisor, similar to a Trip Advisor or Yelp model.