Updated Tuesday, July 22, 2014 as of 5:46 PM ET
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What’s on Your Company’s Dashboards?
Monday, July 1, 2013
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As is the case in any service industry, the best advisory firms focus their efforts primarily on (1) client service and satisfaction, (2) employee development, utilization, and organization, and (3) the efficient, profitable operation of their businesses in a manner that promotes a sustained pattern of growth – in that order of priority.

Those same firms establish clear, universally understood goals for their efforts and equally clear, universally understood strategic plans to achieve those goals. Yet, while many advisory firms can declare that they adhere to these rudimentary, common-sense business principles, most eventually fail to execute effectively on their plans and goals, primarily because they do not adequately and regularly measure their progress and hold themselves accountable against those plans and goals.

For this reason, those advisory firms that truly seek to distinguish themselves as strong, sustainable businesses should be utilizing a business tool that already has saturated most other industries: the dashboard. In simple terms, the term “dashboard,” as used in this context, refers to an easily presented record that can be updated regularly to display, measure, and provide insight into the vital functions of the business. Much like a vehicle’s dashboard measures the operation of the vehicle’s critical systems, a company’s dashboard measures the operation of the company’s critical systems.

Business Dashboards

Business dashboards may be created and maintained using internally generated spreadsheets, or they may be purchased in the form of standardized or customized software. Regardless of the platform underlying the dashboard, it must be updated regularly and viewable by all who are accountable for the functions being measured.

For an advisory firm, a company-wide dashboard should be created and maintained to track the vital information in Exhibit A, all of which ultimately should measure the success of the company in achieving its goals relative to the central priorities described at the beginning of this article. In each case, current results should be compared to the company’s corresponding budgets and goals.

Exhibit A:

  • Revenue
  • Expenses
  • Profit before owners’ compensation
  • Profit after owners’ compensation
  • Profit margin
  • Assets under management
  • New assets from new clients
  • New assets from existing clients
  • Lost assets from client terminations
  • Lost assets from client withdrawals
  • Total clients
  • New clients
  • Lost clients
  • Total prospective clients
  • Total employees
  • New employees
  • Lost employees
  • Revenue and profit per client
  • Revenue and profit per employee
  • Average client AUM

Functional Dashboards

In addition to the company dashboard, which should be updated and monitored regularly by management, an advisory firm also should maintain dashboards that monitor some of the more vital sub-functions of the company. Examples include investment performance, which should be updated and monitored regularly by the investment team, and business development results, which should be updated and monitored regularly by the business development team. In all cases, however, these functional dashboards must also be reviewed regularly by company management, whose responsibility it is to hold the appropriate people accountable for their performance against the company’s goals and plans.

Individual Dashboards

Even the minority of advisory companies that already have adopted at least some use of dashboards frequently have missed the opportunity to create dashboards for their individual employees. In cases where an employee’s performance can readily be measured, at least in part, through the use of a dashboard, it generally should be so measured.

For example, it may be helpful for a wealth management professional to have a personal dashboard that measures the key metrics in Exhibit B as applicable to the clients for which the individual has primary or even secondary responsibility.

An investment professional, such as an analyst or portfolio manager, might also have a personal dashboard that measures investment performance attributable in whole or in part to the efforts of that individual. See Exhibit C.

Exhibit B: 

  • Revenue
  • Assets under management
  • New assets from new clients
  • New assets from existing clients
  • Lost assets from client terminations
  • Lost assets from client withdrawals
  • Total clients
  • New clients
  • Lost clients
  • Total prospective clients
  • Revenue per client
  • Average client AUM

Exhibit C:

  • Assets under management
  • Gross and net performance of any applicable strategies or securities
  • Relative performance of any applicable strategies or securities
  • Volatility of any applicable strategies or securities
  • Watch lists maintained
  • Securities analyzed

Using Dashboards to Measure Performance and Ensure Accountability

(3) Comments
Add your comments here.
Posted by John C | Friday, July 05 2013 at 1:00PM ET
Like the dashboard in your car, a business dashboard places real-time knowledge in front of executives, managers and teams to help them drive the operations under their responsibility. Since the core purpose of a dashboard is to support decision-making, only actionable information should be included.
Posted by KIMMY B | Wednesday, March 12 2014 at 7:21AM ET
Like the dashboard in your car, a business dashboard places real-time knowledge in front of executives, managers and teams to help them drive the operations under their responsibility. Since the core purpose of a dashboard is to support decision-making, only actionable information should be included.
Posted by KIMMY B | Wednesday, March 12 2014 at 7:22AM ET
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