Adviser concentration

The share of an office's assets or revenue attached to one adviser as primary, read against the expected share of one over the number of advisers. High concentration with clients who have no second relationship is succession risk.

DefinitionThe share of an office's assets or revenue attached to one adviser as primary, read against the expected share of one over the number of advisers. High concentration with clients who have no second relationship is succession risk.

Per office, not per firm

An adviser at 4 percent of the firm can be 45 percent of their office. The office loses the clients, so the office is the level.

The second relationship is the fix

A concentrated book is a successful one. The risk is the share of it with no second contact, and the list is those clients.

How it is computed

Assets and revenue with each adviser as primary, divided by the office or firm total, together with the share of those clients who have no second relationship at the firm.

Example

One adviser holds $310 million of an office's $1.4 billion: 22 percent. Of her 140 clients, 118 have had no logged contact with anyone else at the firm in a year. If she leaves, most of that fifth is at risk.

Where it goes wrong

Reported as a league table of top advisers, which reads as success. The risk is the second column, clients with a single relationship, and it is rarely shown.

Articles that use this term

Board and management reporting · Wealth managers

Adviser concentration: how much of the book leaves if one adviser does

How a wealth management firm measures the share of assets and revenue attached to each adviser, the client-level dependency behind it, the succession list of advisers whose books have no second relationship, and why the figure is reported per office and per team, not just for the firm.

16 Sept 20262 min read Board and management reporting

Concentration by industry: where a large top-ten share is normal, and where it is risk

Concentration is measured the same way everywhere, top-n share, count to half, the index, and what a high figure means depends on the desk: normal in a category with a few large buyers, a dependency in one with many. This hub gives, for twelve industries, what is concentrated, on which axis, what a typical top-ten share looks like, when it is a strength and when it is a risk, and the guide for each.

16 Sept 20263 min read Coverage and territory · Wealth managers

Referral source by adviser: where new clients come from, and what each source is worth

How a wealth management firm measures its new client sources from the client master and the assets and fee records: clients won per source per adviser, assets and first-year fees by source, retention at three years by source from the firm's own history, the advisers whose books grow from client referrals against those dependent on one introducer, and the concentration risk in an introducer that sends a third of a firm's new assets.

16 Sept 20262 min read Board and management reporting · Wealth managers

Ten questions a wealth firm CEO asks, and the table that answers each

The ten questions the chief executive of a wealth management firm puts to the advisers and the operations team, which advisers' books leave with them, which clients keep most of their assets elsewhere, which clients have gone quiet before an outflow, where do new clients come from and what does each source keep, which clients receive a service model their fee does not pay for, which introducers does the firm depend on, which fact-finds are stale, which advisers are at capacity, what is fee margin per client, and what changed, each with the table from the client master, the assets and fee records and the activity log, and the answer to send back.

16 Sept 20263 min read Alternatives and comparisons · Wealth managers

How to choose analytics software for wealth managers: questions, data and traps

How wealth firms should choose analytics software: start from the questions, check the data you hold, ask vendors ten questions, avoid the traps.

24 Sept 20264 min read Board and management reporting · Wealth managers

Client KPIs for wealth managers: ten measures that matter, each with its formula and the export it comes from

The ten client KPIs a wealth management firm should run on, each with its formula, the export it comes from and what it tells you: net new assets split from market movement, held-away assets, contact recency by client value, outflow watch, adviser concentration, fee margin by client after service cost, referral source value, client age and succession coverage, review completion, and household consolidation. Also the three measures most wealth firms miss, the figures to drop, the identities, and who owns what.

17 Sept 20264 min read