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Better Business

Key Factors To Success

By 29 July 2021October 11th, 2023No Comments


I was delighted to see a report from Praemium / Business Health outlining the 7 key metrics for wealth practice success, them being:

  • Revenue per Client
  • Clients Per Adviser
  • Salaries as % of Revenue
  • Support Staff Per Adviser
  • Client Satisfaction Ratings
  • Practice Profitability
  • Rent as % of Revenue

Here is how Financial Simplicity helps firms improve on all of these metrics at the same time:

  • Revenue per Client – There are many studies that show that if you provide clients the option of a service that has ‘standard’ attributes vs one that is customised to their specific needs, nuances, or other emotions, that they are prepared to pay more for the one that is tailored to them. By providing them with a personalised portfolio / investment management service, firms have the opportunity to increase revenues.
  • Clients Per Adviser – In the provision of portfolio management, any time that is spent on doing low-value computational (often spreadsheet) based activities limits the time that can be spent on business growth or servicing more clients. Financial Simplicity’s capabilities to simultaneously monitor and review all client portfolios, each tailored to their specific rules, preferences, and constraints enables the ability to reduce the low-value time per adviser and hence increase client to adviser ratios without compromising service levels
  • Salaries as % of Revenue – In an era of new technologies, the ability to make use of technology to massively reduce (sometimes up to 80%)  the amount of human effort to service client obligations is a reality today. Ultimately this is about reducing the amount of human manpower to deliver the same level, if not improved, services to clients. By doing this Financial Simplicity helps reduce the ratio of salaries as % of revenue
  • Support Staff Per Adviser – In the same way as before, deployment of technology and techniques like Financial Simplicity means that firms can significantly re-allocate support resources to higher value activities or become advisers themselves. The ‘on demand’ nature of Financial Simplicity’s portfolio reviews and the downstream business benefits of such very much create the opportunity to change the support staff to adviser ratio.
  • Client Satisfaction Ratings – Notwithstanding the ups and downs of markets, what is more, satisfying than being provided pro-active, personalised advice or reviews of portfolios. Financial Simplicity sets new benchmarks in terms of responsiveness to changes in markets or research to client portfolios, providing the foundation for exceptional client service (and ratings of such)
  • Practice Profitability – The efficiencies that client firms achieve in the deployment of Financial Simplicity are designed and directed at not only improving service and enhancing revenues but reducing costs also, providing an ideal foundation for increasing practice profitability
  • Rent as % of Revenue – This outcome is generally a by product of leveraging technology to lead to less human resources to deliver the same or improved services to clients. More use of technology with less need for administrative support improves the rent: revenue ratio.

I very much feel that with the changes in the industry, combined with increasing regulatory and consumer dynamics that achieving improved metrics in all of the above is likely to become a ‘must do’ rather than an option. Those who fall short in the essential business efficiency / client servicing formula may be challenged also with sustainability issues.


Stuart Holdsworth

Author Stuart Holdsworth

Stuart has over 30 years of experience in the use of technology for the strategic competitive advantage of businesses in the financial markets and investment industry.

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