Fee margin

For a wealth or advisory client, fees earned less the cost of the service actually delivered in adviser and support hours at stated rates, against the segment's own median. Read with held-away assets and tenure, so a first-year investment is not confused with a decade of service above fee.

DefinitionFor a wealth or advisory client, fees earned less the cost of the service actually delivered in adviser and support hours at stated rates, against the segment's own median. Read with held-away assets and tenure, so a first-year investment is not confused with a decade of service above fee.

Service below fee is also a finding

The premium client receiving standard service is the complaint waiting to happen.

Not from headcount averages

Every client costs the same and the ranking is the fee ranking.

How it is computed

Fees earned from a client minus the cost of the service model actually delivered: adviser hours, reviews, planning and support, at stated rates.

Example

A client paying $4,200 a year receives quarterly reviews and full planning costing about $5,600. Forty clients on that tier pay less than the service costs.

Where it goes wrong

Service tier set by relationship and never by fee. The most attentive service goes to long-standing small clients.

Articles that use this term

Board and management reporting

Cost to serve by industry: what the account costs beyond the goods, on twelve desks

Cost to serve is what it takes to serve an account beyond the product, and what that is differs by desk: drops and returns for a distributor, adviser hours for a wealth firm, support tickets for a SaaS company, pursuit hours for a consultancy, detention charges for a forwarder. This hub gives, for twelve industries, the cost components, the rate each is stated at, the source, and the measure it feeds, with the guide for each.

16 Sept 20263 min read Board and management reporting · Wealth managers

Fee margin by client: advisory fees against the cost of the service model

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.

16 Sept 20263 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 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