Business Analytics: Are You Using the Same Metrics as Your Competitors?

By James Carney, CEO, ByAllAccounts on Thursday, October 27th, 2011

We’ve all seen a great deal written about the workings of today’s RIA firm, with a big focus on best practices, technology, client marketing and investment strategies. They’re all essential elements of a successful firm—no question about that. But I have not seen much press devoted to another essential element—the act of measuring the success itself—namely, the science of business analytics.

Whether we call it analytics or metrics, it’s an integral part of what makes a firm tick—from the expansive plans of the principals and the intricate calculations of advisors to the most mundane tasks performed by support staff as a necessity of daily operations. It all revolves around questions such as:

How are we doing? Are we reaching our goals? And what criteria are we using to measure our performance?

To get a gauge on how today’s RIA firm answered these questions, I went straight to the source—and asked the principals at several firms what business analytics they measured in the running of their business. I was very curious as to what they’d answer, not only from an informational perspective, but also vis-à-vis their status as competitors who bring different outlooks to the task at hand.

The following criteria were the ones most cited by principals as key variables in the creation of analytic information that they use to assess their business. I invite you to see how these metrics stack up against the ones you’re using. I have refrained from commenting or elaborating on the criteria cited—rather, this listing is designed to give you a flavor of the types of metrics being used.

Examples of the monthly metrics being used:

  • Average AUM per advisor

  • Average AUM per staff

  • Average portfolio size per household

  • # of accounts and average account size

  • # of transactions processed monthly

  • # of trades monthly

  • Average trade size

  • # of new clients added

  • New dollars added

    • From existing client

    • From new clients, was the client a referral?

  • Dollars lost monthly

    • Clients changing managers

    • Client withdrawals (for retirement)

    • Client withdrawals to pay income taxes

  • Expenses
    • Per advisor

    • Per client

    • Per staff

  • New client information

    • Time from introduction to becoming a client

    • Time to process account opening documents and transfer requests

In terms of how these analytics are constructed every month, it is by and large a manual process that consists of gathering data from internals systems (portfolio management, CRM, billing etc.). Most principals expressed a desire to automate the process and would like an “electronic dashboard” where the information was readily available to them.

As mentioned, this is a just sampling. I’d be eager to hear your thoughts on what you’re using as your key business analytics and how you create them, feel free to email me at

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