Web-based software “disruptor” BrightScope Inc., which has gained a name for shedding light on the opaque 401(k) industry, has brought advisor industry pundit Michael Kitces to its advisory board just before it launches a fee disclosure feature later this year on BrightScope Advisor Pages.
Kitces, partner and director of research at Pinnacle Advisory Group, and publisher of the Nerd’s Eye View financial planning industry blog, will join fellow advisory board member Josh Brown, the “Reformed Broker,” in offering BrightScope insights on how it can refine its Advisor Pages’ ADV fee disclosure feature.
“BrightScope is a disruptor,” said Chip Roame, managing partner of industry consultant Tiburon Strategic Advisors, in an email when asked to comment on Kitces’ affiliation with BrightScope. “BrightScope will disrupt the advisor industry, and become a portal for advisor data.”
BrightScope bills itself as “the leading independent provider of retirement plan ratings and investment analytics to participants, plan sponsors, asset managers and advisors in all 50 states.” For example, the company recently released a survey of the Top 25 401(k)s for New York City-based companies, which names names and lists average account balances and the 401(k) plans’ top funds.
The company has rated more than 46,000 retirement plans, spanning 30 million workers and $2 trillion in assets, and provides information on more than 600,000 financial advisors. It gets its data directly, either from plan sponsors, or from publicly available sources ranging from the Department of Labor to the Securities and Exchange Commission.
BrightScope Targets Transparency
Now, BrightScope is targeting the transparency, or lack thereof, in the advisor industry.
BrightScope launched Advisor Pages in 2011 as an online and publicly available directory that helps consumers conduct their own due diligence on financial advisors. The company believes it can accelerate the growth of the financial advisory industry and increase its legitimacy by creating standards around performance, experience, certifications, fees and conduct.
“The BrightScope team and I have similar beliefs that right now there is a chance to develop data-driven tools and information for consumers that fundamentally change the industry with a new level of transparency,” Kitces said in a statement. “I’m excited to work alongside the team to further advance that cause.”