In the pursuit of personal ROI, broker-dealers and their advisors must learn to be more productive in order to yield greater revenue for the same level of effort. Investment complexity and industry competition are the dreaded dragons when it comes to blocking the path to productivity with their size and intimidation. To slay the metaphorical dragon, one path is to turn data into decision-making power by using practice management analytics (PM Analytics) as the guiding compass for where to take the business. PM Analytics can help identify what has worked for top advisors and what areas, if pursued, might lead to a ‘happily ever after’ for the advisor. But, there are essential tools the advisor will need to effectively prepare for battle. The journey starts with data, and if the path is followed correctly, it will end with a decisive victory.
 
Where to Get the Data
Independent broker-dealer executives have embraced enterprise data management over the past several years. They see the value of capturing their data in a single repository for all business functions across the enterprise. The primary driver for enterprise data management has been improved business control and risk management.
Broker-dealers have been providing more value to their advisors by offering them tools to be more productive. Integrated CRM software and financial planning tools strive to utilize data in a more actionable way for better customer relationships and investment decision-making. The same data used to better control the business and feed CRM and financial planning tools can be used for PM Analytics purposes if properly transformed into a consumable dataset.
 
How to Find and Slay the Dragon
The hero of this story, however unlikely, wields PM Analytics as his (or her) weapon. PM Analytics is built on data mining from the advisor’s book-of-business to discover opportunities to increase business from existing clients and expose clients who act as resource sponges, absorbing considerable time while providing little revenue in return.
PM Analytics answers questions around the distribution of client assets and revenue, where the advisor is spending time and where the advisor should be spending time. Effective practice management begins with setting goals, charting a course and then measuring progress. PM Analytics helps to set these goals and measure progress against them.
 
Why to Act – Decisions, Decisions, Decisions
With all of the advisor’s weapons in the same arsenal (cleanly shined, organized and ready for battle) the requisite data is housed in a unified warehouse easily rolled-up into dashboard views for advisor, sales management and executive management use. From that information, the team can gather valuable intelligence for:
 

  • Setting measurable goals that can be tracked over time.
  • Improving client relationships through a better understanding of services that better serve the relationship.
  • Mitigating the time spent on low producing relationships and services and replacing them with activities yielding greater returns.
  • Identifying the most productive advisors and studying their behavior to feed the PM training content.

 
Coaching built around PM Analytics can create new behaviors by advisors, dramatically increasing their productivity, client satisfaction and revenue levels. When approached this way, advisors will spend more time on opportunities resulting in profitable relationships and phase-out the unprofitable ones.
 
What Comes Next?
The key to success resides in the data – the steel that forges the sword – and then the use of the new intelligence to craft a suitable practice productivity improvement strategy. Unfortunately, many firms evaluate expensive Business Intelligence (BI) software that does not address underlying data requirements, which is akin to fighting the dragon with a wooden sword. Broker-dealers can spend a million dollars on these solutions and yield no useable output. Data needs to be transformed and enriched into the values and conventions needed by analytics reporting software in order to generate true benefits.
Firms should leverage their enterprise data investments and work with their data management providers to devise an appropriate roadmap for producing PM Analytical information for their advisors that will explosively boost advisor productivity and revenue production. With a sword forged from the strongest steal, dragons beware.
 
 
Scott Gillespie is a Senior Consultant at Quadron Data Solutions. He is also the Managing Partner of TransAd Partners LLC, the consultancy affiliate of Fetter Logic, Inc.