Financial advisors will have a new medium for interacting with their clients when the website Know Your Financial Advisor (www.kyfa.com) launches this month. Operated by Vancouver-based Know Your Advisor Inc., the new website will allow clients to rate advisors and write reviews of them online.

The firm says its database already lists more than 80,000 Canadian financial advisors, making it one of Canada’s largest online advisor directories.

“KYFA was created to address a strong need in the financial services industry,” says Christian Gradley, co-founder and CEO of KYFA. “Right now, finding a financial advisor is difficult and stressful for investors. With a client’s life savings at stake, it’s not a decision that should be based on whose flyer arrived in the mail.”

The KYFA website was created by Gradley, along with Tyrel Burton, the firm’s chief financial officer, and Dale Borland, head of business strategy and corporate execution. The website is unique, Gradley says, in that it provides a service to both investors and advi-sors while simultaneously working with firms to ensure advisors meet compliance requirements.

For investors, the website will serve as a central portal for navigating the financial services industry, says Gradley. Clients can search for an advisor by name, firm or location. To help investors make a selection, they can read ratings and reviews submitted by advi-sors’ clients. A special “audition tool” enables investors to select a short list of advisors and compare their ratings side by side.

Administrators of the website vet all client reviews to ensure accuracy, and advisors are asked to verify that each submission is indeed from a legitimate client before the review is posted to the public area. Controls have been put in place to ensure that fraudulent reviews cannot be posted and to prevent advi-sors from reviewing themselves.

In addition, the website acts as a social network, through which clients can communicate with their advisors in a forum called “Answers and Advice.”

The main purpose of KYFA, Grad-ley says, is to make information more readily accessible for clients and to facilitate communication between clients and advisors.

“Right now, information is hard to find,” he says, “and [online] communication tools are virtually non-existent.”

The database was compiled by Gradley and his team, who have compiled information that is available publicly. The website was made available to advisors last month, allowing them to register, log in and create a personal profile page. The website will be officially launched to the public this month.

Gradley, a former CIBC Wood Gundy advisor, says he recognized a real need for advisors to get marketing exposure that went beyond their companies’ web pages.

“The frustration I felt as a broker,” Gradley says, “was that your personalized web page is hidden behind various walls and brand websites. Every advisor is having the same struggle: they have a website, but it is completely invisible.”

Gradley says he wanted to create an “open index” site — one that would return an advisor’s profile page directly in a Google search.
@page_break@“I think the exposure from this site is going to be great,” says Alex Groberman, an investment advisor with ScotiaMcLeod Inc. in Calgary. “The ability for investors to search by type of service will be particularly beneficial.”

Use of the website is free of charge for both clients and advisors. The website provides tools that allow advisors to connect with clients. Eventually, the website will enable open communication between advisors. All advisors registered on the website can participate in the Answers and Advice forum and post news about events for their clients on personalized calendars.

Any new form of communication by advisors raises questions about compliance, and Gradley knew from the outset that compliance controls would key to this site’s success.

“As a former Gundy employee,” he says, “I was intimately familiar with what bank-owned firms considered to be compliance issues.”

The website is designed with what Gradley calls a “compliance back end” — a portal through which firms’ compliance departments can enter the website and monitor their advisors’ communications.

Compliance officers can choose to vet all communications posted by their advisors on the KYFA website before they are posted, or request periodical reports. KYFA can compile a daily, weekly or monthly log for each firm, which can be archived for up to 20 years. For firms that have regional compliance officers, the website can break down the reports regionally and distribute them to the corresponding offices.

“We should not have any compliance issues at all with this site,” says Gradley. “We don’t want to put any compliance officers or advi-sors at any legal risk. We are here to help; not to cause problems.”

Gradley and his team have met with a number of dealer firms to discuss the KYFA website, with the emphasis on compliance issues. The team has met with industry associations, including Advocis, the Investment Industry Association of Canada, the Investment Industry Regulatory Organization of Canada, the Mutual Fund Dealers Association of Canada (all based in Toronto) and each regional compliance group that is regulated by IIROC and the MFDA.

These groups declined to comment on the site, saying they would comment only after the public part of the website has been launched.

While the website is still in its first phase, Gradley says, he plans to add a customer-relationship management tool, a survey tool that can be used both by advisors and by firms, and an advisor-to-advisor messaging system.

Says Gradley: “We want to be a marketing and communication tool for advisors, but also a social-networking tool for them to interact with others and share ideas.”

The timing for such a website couldn’t be better, says Julie Littlechild, president of Toronto-based Advisor Impact Inc. , in light of the recent economic downturn.

“We know that clients today are going online in increasing numbers to look for information and support in finding a financial advisor,” she says. “And having input and feedback from other investors is an important part of validating that choice.” IE