Blog · Board and management reporting · Wealth managers
How a wealth management firm measures the margin on each client relationship, from the fee ledger and the service records: fees earned, the cost of the service the client actually receives in adviser and support hours at stated rates, the margin per client against the norm for its segment, the clients receiving a premium service model on a standard fee, and the two responses, re-tiering the service or repricing the fee.
A wealth firm knows its revenue per client and its adviser headcount. What it rarely computes is the cost of the service each client actually receives, and so it does not know that a fifth of its clients are receiving the top service tier on a standard fee because their adviser likes them. This guide sets out margin per client from the fee ledger and the service records, the norm, and the two responses.
Per client, per year:
Fees = Σ fee ledger Service cost = Σ activities × duration × role rate Margin = fees − service cost Margin ratio = margin ÷ fees Norm = segment median margin ratio
Per adviser: margin across the book, and the share of clients below norm.
Client and adviser identifiers only.
Σ clients' fees = fee ledger total Σ clients' service hours = logged hours on clients, per adviser
Hours logged to no client are listed as unattributed and excluded from every client's cost.
Segment norm margin ratio: 58 percent.
| Client | Fees | Service cost | Margin | Ratio | Contracted tier | Service delivered | Held-away | Tenure | Reading |
|---|---|---|---|---|---|---|---|---|---|
| 2207 | $18,000 | $6,500 | $11,500 | 64% | Standard | Standard | $0.3m | 9 yrs | On norm |
| 4471 | $9,000 | $11,200 | −$2,200 | −24% | Standard | Premium: 6 meetings, 2 reviews | $0.2m | 11 yrs | Service above fee; decision needed |
| 9034 | $7,000 | $9,800 | −$2,800 | −40% | Standard | Premium | $2.4m | 1 yr | Investment: plan in progress |
| 1187 | $31,000 | $8,100 | $22,900 | 74% | Premium | Standard | $0.1m | 6 yrs | Under-served for the fee |
Clients 4471 and 9034 look alike on margin and are opposite cases: one is a decade of a service model nobody chose, the other is a first-year client with two million held away and a plan being written. Client 1187 pays for premium and receives standard, which is a different risk.
| Pattern | Response |
|---|---|
| Service above fee, no held-away, long tenure | Re-tier the service, or reprice the fee at the next review |
| Service above fee, large held-away, plan in progress | Leave; revisit when the assets consolidate |
| Service below fee | Deliver the tier, before the client notices |
Cost from headcount averages. Every client costs the same and the ranking is the fee ranking.
Held-away and tenure not on the line. The investment and the drift look identical.
Adviser judged on margin alone. The adviser with the most first-year clients looks worst.
Service below fee ignored. The premium client on standard service is the complaint waiting to happen.
Mapped once, the fee ledger, the activities, the service tiers and the client master produce margin per client, the norm, the pattern and the per-adviser view every year. Covirage builds this from the exports as they are. The wealth managers page describes the setup, and the held-away assets guide covers the figure that separates an investment from a drift.
The CRM's activity log for meetings and calls, the review schedule for annual and interim reviews, and support ticket or task records for administration. Each at a stated rate per hour for the role. Where hours are not logged, counts of each activity type at a median duration are the fallback, labelled.
A low-margin client with a large held-away balance and a plan in progress is an investment. A low-margin client at full share of wallet, receiving a service model two tiers above their fee for a decade, is a decision nobody made. The report shows held-away and tenure beside the margin so the reader can tell them apart.
The median margin per client within the segment, from the firm's own book. Not a target from outside. A client at half the segment norm is the finding; the segment's own median is what the firm demonstrably achieves with clients of that kind.