What do you Measure in your Financial Advice Business?

At the end of the day for most advisers, there’s one measure that stands head and shoulders above the rest in terms of importance – profitability.

Until recently, many firms actually didn’t view profitability as their key metric; their main focus was on income. This was usually backwards looking, i.e. examining income in the last 12 months, or sometimes also looking out at the next 12 months. Many firms have now switched this focus to looking further forwards – based on their increasing trail commission and fee incomes, what is income forecasted to be next year / in 5 years time / in 10 years time? This now gives a real sense of the future health of the business.

While income is a very important metric, profitability tells a truer story of the health of the firm as it takes account of the expenses of the firm, and helps to better determine the future value of the business. Now this is what you (or other shareholders) are really interested in!

However there are so many factors that can impact your profitability, most firms will look to dig a little deeper to examine some of those factors that are impacting their profitability. Set out below are just some of the metrics used currently by different advice firms, that help them to determine the performance of key inputs to their profitability. Which ones might it make sense for you to start tracking?


Client metrics

There is a range of metrics that can be used to measure the success of your client activities. These include;

  • Number of clients: this can be measured at an overall level and also within segments of your target client groups.
  • Average revenue per client: this will give you a sense of whether you are building greater value into your propositions and whether you are reaching your ideal clients. Again this may be carried out at a segment level.
  • Average recurring revenue per client: this will give you a good sense of the future health of your business.
  • Number of new clients: always a good measure of whether you are growing as a business or not!
  • Client satisfaction: this will give you a sense of your likelihood to hang onto your clients into the future. Again this can be carried out at a segment level. The Net Promoter Score is a very simple but useful measure of client satisfaction.
  • Risk register: Are there problem cases that need to be monitored? If so, a firm oversight needs to be maintained, both in relation to the number of cases and progress of these cases towards a solution.


Staff measures

Again, there is a range of measures that you can use to ensure your staff are performing to their maximum potential;

  • Sales Performance: This may be based on volume, margin or other relevant measures.
  • Activity: This may be the number of new clients secured, first meetings secured, financial plans completed etc. It is always useful to get a good sense of the activity levels of each of your sales team.
  • Staff satisfaction: Similar to client satisfaction, this is important too! Are your staff happy and committed to the long term health of your business or are they just waiting for an opportunity to jump ship? Staff satisfaction measures can help you uncover these insights.


Marketing Metrics

Yes, most marketing activities can actually be measured! Here are a few that will help inform your marketing activities;

  • Contact data quality: This might be as simple initially as tracking the number of client email addresses you have secured. Email offers you a no cost method of getting marketing messages out to your clients.
  • Numbers and source of leads: Tracking the numbers and source of new lead is one of the best inputs into decision making around future marketing activities. If it worked before, it might be worth repeating!
  • Website analytics: Google analytics will give you a wealth of data in relation to your online marketing activities. For more detailed information in relation to how Google Analytics can help financial advisers, check out our previous article here. Google analytics can tell you;
    • The number of people finding your website
    • Where website visitors came from – Search terms, social media, directly accessing your website.
    • The content that attracts people to your site…. and also drives them away.
  • Social media interactions: Likes, +1’s, comments, Retweets! These terms are “Double Dutch” to some people, highly valued endorsements of your content to others!

There are of course many other measures available to be used within your business, these are just a few that are available to you. However the list is also potentially endless! For most advisers, the starting point is to identify a few metrics that you feel will make a real difference to your business, and then track them diligently.

There are many metrics that people use that are not listed above. Which ones do you find particularly useful? All your comments are welcome below.

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Getting on the Radar of Prospective Clients

There is of course any number of ways that clients choose the best financial adviser for them to work with. For some clients, it will simply come down to whoever will work for the lowest price and they will go to great lengths to seek out the cheapest adviser. While this is acceptable to some advisers who compete purely on price grounds, there are many others who are not seeking out these clients.


For other clients, it might come down to convenience. How accessible is the adviser, is their office easy to get to, will the adviser come to the client rather than expecting to be seen in the adviser’s office? This is great for all of you with a high street presence!


Of course, many clients are becoming far more discerning than this today. They are seeking out an adviser who can really add value to them, can really understand their financial goals and objectives and ultimately help them achieve them. These clients are looking for an adviser to work with over the longer term, making them a really attractive prospect for the adviser.


But how does an adviser ensure they emerge onto the radar of these clients? There are many ways of building your band awareness, using advertising, sponsorships etc., however the focus of this article is how you attract those clients who are looking for an adviser offering a strictly advice based proposition.


Build your Advocates

It’s hard to beat other people talking positively about your business and about the wonderful advice that you give. Today more than ever, people trust peer recommendations far more than marketing messages delivered by the brand itself. Because of this, referrals are a really valuable endorsement for your business, where one client recommends your business to another, based on their own positive experience. Most advisers rightly work really hard on building referrals.


Get found online

The next method is to ensure that your website features high up on the Google Search results when a client is searching for a keyword you wish to be associated with. This is the subject of a previous post that can be read here and is too long to be repeated here. Suffice to say, it’s really important to identify your chosen keywords carefully and then target these in search results.


Now once people find your website, it’s of course equally important that your website then meets their expectations in terms of the messages it delivers. If your core proposition is a financial planning / advice based offering, this needs to be the core message coming via your website…and your LinkedIn profile which is often the next place that potential clients will visit to determine whether you are the adviser for them or not.


Of course, another way that people may find a broker is via the broker organisation websites, such as the PIBA, Financial Broker, IBA or Trusted Advisor Group websites, so make sure your details are up to date on these sites.


Build your presence online

With the huge growth in content marketing, many advisers are regularly posting expert articles online, either through their website or through a standalone blog. And now with the huge reach of social media, financial advisers are reaching audiences way beyond their client bases. There are currently advisers in Ireland with literally thousands of Twitter followers, many of who are not clients…yet. These followers have chosen to be kept updated with the content of these advisers. So there’s a good chance that they’ll turn to these advisers when they actually have a need for financial advice.


The same applies to LinkedIn. Every time someone “likes” or comments on one of your posts, your network and their network is informed of that activity, bringing you and your content to the attention of the latter’s network. Now your expert content is being circulated for free! And then there are the opportunities offered by LinkedIn Groups for you to become the expert voice among your target audience, many of whom you are not connected to. The opportunities are huge!


Traditional media is also still valuable

There are a number of advisers who have built up a really strong presence, delivering their expert opinion using traditional media. For some, they have worked hard to establish themselves as an expert voice in a particular product area or in relation to a particular issue. They then become the “go-to” person for journalists seeking out expert opinion.


Others have built trusted links with individual publications (national, local and trade) or journalists and as a result, regularly have their expert opinion pieces featured. This can come in the form of articles, as quoted sources within articles or as a provider of answers in “Financial Questions” sections within newspapers or on local radio shows.


All of these offer the adviser the opportunity to reach out beyond their clients to new audiences.


At the end of the day, until the client actually learns more about you, it’s impossible for a potential client to differentiate between you and another adviser. You may have the same qualifications, you both might use the same title, and on the surface you might offer very similar services. Hopefully some of these methods just might help you stand apart from your competitors!


Are there any other methods that you use to position your business positively in the eyes of potential clients? If there are, please leave your comments below.

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