SmartAsset raises $110 million after LPL and Schwab dominoes fall, revenues zoom to $100 million and Zoe escalates RIA referrals arms race

The most telling part of the article for me is the unwillingness on the part of management to provide color on that $100MM in revenue they're generating from advisors. Is that booked in 2020, through first 1/2 of 2021, or a run-rate number based on latest month? Looks like the conversion rate is about 8% ($25B in leads converts to $1.5B in AUM). So for clients in the $100k-$1MM pool, SmartAsset charges $230/lead. Let's say average client in the area has $400k and advisors charge 1% AUM, or $4k/yr. Payback period is theoretically 9 months. ($230/.08)/$4,000. Question comes down to how "sticky" are these assets. Probably not as sticky as referral business, but hopefully economically viable for advisors. We'll know in a while I suppose.

Brian, does your math work the same if SA is selling each lead to 3 separate advisors? Or does that increase the theoretical payback period to 27 months?

I was doing a calculation from the advisor's perspective based on numbers in the article. At the macro level the funnel is $25B a month in assets come in the door at SA and convert to $1.5B in AUM...that's 8% conversion for the entire SA business. From the advisor's perspective, some will do well, and some won't under this model. Some will have 5% conversion, some 0%, some 12%. So it might make some sense . The big point is that this money isn't "sticky" in any sense - if 3 advisors are vying for the business - how often do clients get "poached" after the initial conversion has happened (probably more than I would like!). So, you handle that by making assumptions about the lifetime of the client - maybe instead of a referral lasting 10 years, a lead from SA lasts 2. As an advisor, I'd never use such a service (and have already told SA salespeople this 4 or 5 times!). This is a "push" business model...I'm more interested in pull businesses.