Zephyr Associates, a financial analytics software provider to financial advisors, is seeing a steady increase in the percentage of RIA firms among its clients.

RIAs account for about 50% of its client base, up from around a third five years ago, according to Marc Odo, director of applied research for Zephyr.

The software company makes Style Advisor and Allocation Advisor, analytics software that allows advisors to check out not just standard metrics, such as returns of funds or other investment products relative to a benchmark, but also to look at measures that help show whether a given fund’s performance raises any red flags (the way Madoff funds, for instance, stood out for having positive returns too consistently). The analytics also allow users to see whether a fund or other investment is at high risk of creating large losses in certain scenarios (tail risk).

Zephyr is also looking for ways to meet the needs of its growing RIA client base. Already, Style Advisor is available via a single user license for around $8,000 a year (multi-user licenses lower the cost per person, with a typical arrangement being five users for $15,000 a year, according to Odo).

However, there are RIA firms that don’t need all the analytics power of Style Advisor, including access to 50,000 indexes and the ability to analyze even very esoteric types of investments. So Zephyr is considering how to make its newer, stripped-down version of Style Advisor — the web-based Zephyr on Demand —available to independent RIAs as well, Odo says. There is no set timetable for making this available to individual users, but it is a project that’s very much on the drawing board, he says.

In general, given the volatility of the past several years, RIAs are looking for access to analytics that will help them keep their clients out of losing investments as much as they are looking for investments that can generate good returns for their clients. Much of the interest in the software has come from RIAs who have embraced the notion that it’s a good idea to move beyond modern portfolio theory when analyzing returns, according to Odo.

Danielle Reed writes for Financial Planning.