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December 2011: ‘Cut fees and boost profits’
Fewer clients. More productive assets. Following those two principles usually means you’ll be successful. Yet there’s a third principle many advisors don’t talk about openly: discounting fees to attract and keep wealthy clients.
According to PriceMetrix, which collects and crunches North American retail wealth management data, the average discount off the firm’s equity schedule for households with more than $2 million in investable assets is 49%. For households with less than $2 million, the average discount is 33%.
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December 2011: ‘Want to Outperform in 2012? Fire Some Clients’
The fastest-growing advisors in 2012 are likely going to be those who can become more calculated and deliberate about the types of clients they do business with. According to a PriceMetrix report, “outperformers,” or those advisors from PriceMetrix’s database who saw the most growth in either assets, revenues or both in 2011, are adding more productive relationships to their books and dropping less productive ones. This will be just as true next year as it is today, says PriceMetrix, a Toronto-based solutions provider for retail wealth managers.
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December 2011: ‘Are You An Outperformer ... Or An Underperformer?’
There’s no question that the last few years been tough ones for many advisors; and it doesn’t look like next year will be any easier. Even in turbulent times, however, as in any industry, some advisors will shine while others will struggle. More interesting than this phenomenon itself are the reasons that lie behind it. Why are some advisors outperformers while others are underperformers?
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December 2011: ‘How to afford an investment advisor without breaking the bank’
A few months ago Yves Colon and his wife Melissa had a number of retirement accounts from previous jobs scattered among different financial institutions, and only a vague idea of what to do with them.
"We really didn't have a sensible, diversified investment strategy," says Yves, 59, who teaches journalism at the University of Miami. "Even though we follow the markets casually and have done some investing, we weren't giving our money the oversight it really needed."
When they started searching for an adviser to manage their mid-six figure account, they learned that charges of 1.5 percent -- about $7,000 per year -- weren't unusual.
The good news for people like the Colons is that there are less expensive solutions out there, even as investors transition away from commission-driven advice to fee-only, or fee-based approaches.
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December 2011: ‘Holding the line on prices is key to profitability’
In these times of volatile markets, financial advisers might be tempted to cut the fees they charge their clients.
Don't do it, said Doug Trott, chief of PriceMetrix, which provides practice management software for retail brokers and financial advisers. “If you're selling investment performance, it's a precarious position. Advisers should sell a process; a stewardship of assets,” said Mr. Trott. “Advisers who discount when markets are down find it difficult to get it back when markets return to normal.”
Pricing discipline is one of the distinguishing characteristics of top-performing advisers identified in a white paper released today by PriceMetrix. The firm aggregates data representing 1 million fee-based accounts, 4 million transactional accounts and over $900 billion in investment assets.
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December 2011: ‘What makes a "Top Advisor"’
A bearish global outlook may have reined in market sentiment, but it could not tame the trot of outperforming advisors who grew their revenues by 34%—from $581,686 in June 2010 to $781,960 in June 2011—according to a new report by Toronto-based PriceMetrix.
Underperformers, meanwhile, recorded a 4% drop—starting with $633,088 and dipping to $605,564 by the end of the 12-month period.
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December 2011: ‘Prosperous Advisors Know When the Price is Right’
A key difference between prosperous and low-performing financial advisors is how they price their business, a new report from Toronto-based wealth management research company PriceMetrix has found.
The company took to analyzing what determines how well financial advisors’ businesses prosper at the suggestion of its clients at an event in September. The results of that research were released this week in a new report titled “The Anatomy of Outperformers.”
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November 2011: ‘Five Questions With Patrick Kennedy’
So-called sympathy pricing, or discounting, of transactional trades runs rampant in the full-service brokerage industry, says Patrick Kennedy, co-founder and VP, product and technology, for the intelligence-solutions firm PriceMetrix. Here, he talks with contributor Michelle Lodge about the results of his company's three-year study that tracked 7 million retail equity trades in the United States and Canada.
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November 2011: ‘Successful Advisors And The 80/20 Rule’
Do you know what the Pareto principle is? Named after an Italian Economist of the early 1900s, the Pareto Principle is more commonly referred to as the 80/20 rule – 20% of our efforts will yield 80% of our results.
Why is this worth mentioning? It’s another way of reinforcing the notion that the most successful advisors generally have fewer clients – but the clients that they do have are wealthier. As an Investment News headline read “One key to being a million-dollar producer? Dumping smaller clients….”
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November 2011: ‘Sympathy Pricing’ Leaves Brokers Feeling Sorry’
Advisors have been telling clients for years that they should focus on a strategy that aims to maximize returns over the long run in spite of ups and downs along the way. But many advisors have begun to question that conventional wisdom.
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October 2011: ‘If You Don't Know Your Own Value - Who Will?’
It never ceases to amaze me that so many advisors are so willing to discount their fees – no questions asked – as a regular course of business. PriceMetrix conducted a study of advisors across North America, and the findings are based on data which includes the books of 15,000 advisors, 2.3 million investors, one million fee-based accounts and more than $850 billion in assets.
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October 2011: ‘Wealthy stayed calm in volatile market’
August was a month of extreme volatility, largely blamed on the S&P downgrade of U.S. long-term debt. While that move triggered panic selling among most retail investors, the wealthy stood out, taking a steady and balanced approach, according to a study conducted by PriceMetrix.
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October 2011: ‘How the rich handle a falling stock market’
Panic? What panic? According to this analysis by a firm called PriceMetrix, millionaire households were busy making changes to their investments in the stocks market volatility of this past August and they did more buying than selling.
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October 2011: ‘Discounts for the Undeserving’
Financial advisors have too many small accounts, data aggregator PriceMetrix says. More than half of the households in the 15,000 books of business it surveyed had assets of less than $100,000. One problem that emerged from the trend, according to a new study by the firm, is that small households are getting better discounts than some larger clients. Part of the reason is the misguided view that small accounts eventually grow into larger ones, a view that isn't born out by history, says Patrick Kennedy, PriceMetrix co-founder and vice president of research and development.
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September 2011: ‘Slashing fees to clients in tough times won't help your business, study says’
The old saying that nice guys finish last is proving true for those financial advisors who slashed fees in the wake of the economic downturn – they have seen their businesses suffer compared to advisors who kept their fees the same, according to data collected by Toronto-based PriceMetrix.
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September 2011: ‘PRACTICE MANAGEMENT: Discounts Hurt Business’
Apple, known to many as the best retailer in the world, never discounts its wares. Advisors shouldn't either.
A study released on Monday by PriceMetrix, a Toronto-based wealth-management research firm, found that most financial advisers who slashed their commissions during the recession are still charging less than those who kept their prices consistent during that period.
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September 2011: ‘Don’t be too quick to discount’
Emotions and advisory business are strange bedfellows and should sleep in separate rooms. A new study from PriceMetrix found that financial advisors who cut their fees during market downturns, a practice dubbed ‘sympathy pricing,’ are hurting their businesses over the long run.
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September 2011: ‘Why it’s Smart to Discount!’
Fewer clients. More productive
assets. Following those two principles
usually means you’ll be successful. Yet
there’s a third principle many advisors
don’t talk about openly: discounting
fees to attract and keep wealthy clients.
According to PriceMetrix, which
collects and crunches North American
retail wealth management data, the
average discount off the firm’s equity
schedule for households with more than
$2 million in investable assets is 49%.
For households with less than $
2 million,the average discount is 33%.
Read the full article
September 2011: ‘Brokers who discount services are losing out’
Financial advisers who cut their commissions when the market turned down shot themselves in the foot, according to a new study from PriceMetrix, a firm that provides practice management software to 15,000 retail wealth managers.
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August 2011: ‘NBCN offers PriceMetrix CommissionCheck to customers’
National Bank Correspondent Network (NBCN) Inc., a subsidiary of Montreal-based National Bank Financial Inc., made a deal with Toronto-based PriceMetrix Inc. to offer its CommissionCheck SaaS product as an added feature to its subscription service.
David Burnes, executive vice-president of NBCN, said it's “the largest provider of outsourcing services for the financial services community.” NBCN “services independents, providing them with technology tools, trading tools - basically the infrastructure they need to carry on business as a securities dealer,” he said.
Doug Trott, CEO of PriceMetrix, called the contract a “win on all sides,” as NBCN customers who opt-in to CommissionCheck get unparalleled insight into the value of purchases, making important buying decisions and pricing a lot easier.
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August 2011: ‘High net-worth investors prefer fee-based accounts’
Investors have a variety of options regarding fee structure. One of the most popular is the fee-based pricing model.
Investors in fee-based accounts pay a set percentage generally based on the size of the account. Fees can also be set by asset type, where portfolios comprised mostly of low turnover, fixed income investments are charged less than equity-based portfolios.
According to PriceMetrix, fee-based structures are the preferred method of investing for higher net worth clients and they are growing in popularity. PriceMetrix conducted analysis on 2.3 million investors with a combined $850 billion in investment assets and found that from 2007 to 2010, fee-based account business increased by 24% while transactional assets declined by 1%. There are many reasons for the increase.
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July 2011: ‘North American financial advisers seen discounting less’
Looking at data from more than 15,000 U.S. and Canadian financial advisers, the Toronto-based firm said average production, or revenue from fees and commissions, was up 12 percent in May from a year earlier, while the volume of trades and the number of trades at full price both rose by 2 percent.
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July 2011: ‘Financial Planning for the Middle Class’
Financial planning is often perceived as a service reserved for the wealthy. That’s understandable. The more money you have, the more complex your finances are. But people who don’t have hundreds of thousands of dollars in savings need guidance, too, and they often don’t have enough money to satisfy the ever-increasing minimum asset requirements of some financial advisers.
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June 2011: ‘Fees: A new way to slice the pie’
Never let your guard down when dealing with the financial industry, even when it’s offering something as supposedly client-friendly as the fee-based account.
In theory, fee-based accounts give advisers a transparent, above-board way to answer the question of how much they charge for their services. Instead of paying commissions buried in the cost of investment products, clients pay annual fees equal to a percentage of the value of their account plus any costs associated with the investments they hold.
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May 2011: ‘Investment Advice for Small Fry’
Most of us have no business managing our own investments. We buy when prices are high and sell just as the markets are bottoming out. Or we cannot bring ourselves to sell investments that have done well to buy more of what hasn’t. Or we buy on impulse, picking up individual stocks of companies we like and think we understand without much regard for how they may fit into an overall investing strategy.
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May 2011: ‘Dan Richards - Running A Profitable Fee Based Business’
A new research report points to three pricing mistakes that are costing advisors fee-based revenue.
Watch the video
May 2011: ‘Big Advisors Add Larger Accts But Fees Fall’
Brokerage advisors with more than $100 million in assets saw a healthy boost in large fee-based client accounts between 2008 and 2010 – but that also may have taken a chunk out of the average fees charged on those accounts. That’s according to data from PriceMetrix, a Toronto-based software firm that tracks pricing across 1 million fee-based accounts and $850 billion overall in investment assets to provide advisors with fee benchmarking tools.
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May 2011: ‘How Financial Advisers Gun for New Clients’
Many have seen frustrated or panicked clients walk out the door. But even advisers fortunate enough to hold on to their clients have been stung by market declines, since many base their fees on a percentage of client assets. And while the recent market rally has provided some relief—advisers saw their average annual revenue go from $488,000 in 2008 to $522,000 in 2010, according to PriceMetrix, which tracks the industry—the numbers aren't completely encouraging. Advisers who depend on fee-based accounts have seen the average size of those accounts drop from $289,000 to $255,000 since 2008. The bottom line: If advisers are earning more, they're probably also working harder to make those numbers happen
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April 2011: ‘Delving into Advisor Compensation’
Doug Trott of Price Metrix joins us to share the insightful research his company has done into advisor compensation.
Listen to the interview
April 2011: ‘Lowering Your Price Is Not the Path to an Advisory Firm's Success’
Will lowering your rates attract more clients? Not according to a recent study. In fact, lowering your rates could backfire and decrease your attractiveness to potential clients.
PriceMetrix, Inc., a software firm, published the study, which focused on the needs of wealth management firms and their advisors. The firm considered data from 380 million transactions conducted between 2007 and 2010. Included in the data pool were one million fee-based accounts and four million transactional accounts totaling over $850 billion in investment assets.
The results of the study show that advisors are miscalculating the appropriate value of their services—and losing money in the process— averaging $20,000 in lost fees.
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April 2011: ‘Independent Advisers Aren’t Charging Enough’
Business costs are on the rise for financial advisers, paring profits at a time when firms are reluctant to propose fee increases to clients spooked by wobbly markets and a slow economic recovery.
In response, some advisory firms are finding subtler ways, such as tiered pricing, to pass on some of the costs of better technology, enhanced services and products, increases in compliance costs and other expenses.
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April 2011: ‘Why most advisers are leaving money on the table’
Advisers who raised prices through the financial crisis and its aftermath attracted more new clients and assets than advisers who lowered prices.
That counterintuitive finding was one of the more eye-opening results of a recent study on the pricing patterns of 15,000 financial advisers conducted by PriceMetrix Inc., which provides practice management software to thousands of retail wealth managers.
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April 2011: ‘Are you looking to sell your firm? Here's what acquiring minds seek’
A growing number of financial advisers will put their firms on the market in the next few years as they plan for retirement, but most aren't doing much to earn top dollar for their businesses when they do sell, industry observers say.
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March 2011: ‘Low Fees at the Outset Can be hard to Overcome’
PriceMetrix, a software firm for retail wealth management firms and their advisers, found that many financial advisers are foregoing an average of $20,000 in fees because they are under pricing their fee-based business when compared to other advisers in the industry.
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March 2011: ‘Advisors Undercutting Their Own Fee-Based Business: Survey’
Financial advisors are losing an average of $20,000 in fees for not pricing their fee-based businesses competitively enough, according to a new survey from Toronto-based software firm PriceMetrix Inc.
The survey found that assets in fee-based accounts comprise almost 25% of total assets under administration and 37% of total revenue. The area is also growing, with the average advisor’s assets in fee-based accounts having increased 24% from 2007 to 2010.
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March 2011: ‘Rates Vary Widely As More Advisers Use Fees’
As more financial advisers move to a fee-based business model, they still seem to be experimenting with what the best rate is to charge a client.
The average fee charged by an adviser leveled off in 2010 after dropping year-over-year in the two previous years, according to a study released Monday by PriceMetrix. But individual rates varied dramatically, even for clients with similar asset levels to manage.
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March 2011: ‘Advisers not charging enough: Study’
Fee-based financial advisers are leaving money on the table when it comes to setting their prices, according to data analyzed by software firm PriceMetrix Inc.
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March 2011: 'North America wealth advisers hurt by discounts: study’
The typical North American financial adviser forgoes $20,000 in potential revenue every year because of discounts on fees, according to a study released on Monday. Assets in fee-based accounts grew by 24 percent between 2007 and 2010, while transactional assets decreased by 1 percent, said Toronto-based PriceMetrix, a software firm that advises brokers on practice management.
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February 2011: 'U.S., Canada wealth managers rebound in 2010: report'
The North American retail wealth management industry has largely recovered from the economic downturn, with investment advisers hitting record asset and revenue levels in 2010, according to a report released on Tuesday.
Average adviser assets reached $71.5 million in 2010, up 8 percent from the previous record high in 2008, Toronto-based brokerage software firm PriceMetrix said in its annual report on the North American industry.
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February 2011: 'Fee-based Business Up, Pricing Down'
PriceMetrix Chief Executive Doug Trott has a message for fee-based advisors: think about charging more. The Toronto-based practice management and software business says it’s seeing growth among its fee-based clients but that pricing is under pressure.
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January 2011: 'Addition Through Subtraction'
A study of 15 wealth management firms with more than 15,000 advisors total found that all of them trimmed the number of small household accounts (less than $100,000) they serve by 3% to 14% in the one-year period ended August 2010, and that advisors boosted their annual revenues by $7,700 for every 1% reduction in these types of accounts.
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November 2010: 'Small Accounts Usually Stay That Way'
Some advisers cling to small accounts in hopes of striking it rich off them some day, but the chances are almost as slim as winning the lottery.
The likelihood of an adviser's $10,000 client becoming a $1 million client is less than one in 200, or 0.42%, according to a study by PriceMetrix, a financial adviser consulting firm.
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November 2010: ‘Fewer Small Accounts Mean More Production
For Advisors: Study’
Getting rid of smaller accounts could mean more production for advisors, according to a new study from PriceMetrix, a Toronto-based solutions provider for retail wealth managers.
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November 2010: ‘Mom and pop investors get the cold shoulder: study’
The mom and pop investors who have long fueled Wall Street's brokerages may now find they are getting the cold shoulder -- and that is by design.
Wealth management firms with 15,000 advisers reduced their concentration of small accounts by as much as 14 percentage points during the year ended in August, according to a study of 15 clients by PriceMetrix, a software firm that advises brokers on practice management.
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November 2010: ‘Inside Broker’s World’
This week’s look inside the big brokerages, including a Merrill Lynch webcast, new study and adviser production, with Annie Gasparro, Broker's World columnist for Dow Jones.
View the video
November 2010: 'Wall St brokers misled by many myths'
Veteran brokers learn the ropes of the business over many years, but some widely held beliefs about how to manage clients are really just myths that can cost advisers money.
Small accounts almost never blossom into big, lucrative accounts. Likewise, advisers should stand firm when clients seek price discounts, said Doug Trott, chief executive officer of Toronto software firm PriceMetrix.
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October 2010: 'Big Clients, Better Than Small Clients'
Advisors use asset allocation to get the best returns for their clients. So why don't they use the same technique to jack up their own profitability? That question was raised by PriceMetrix, a Toronto-based solutions provider for retail wealth managers.
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October 2010: ‘The key decision that drives million dollar books’
"What does it take to succeed at the highest level?" is a common question among both new and not-so-new entrants to the financial industry.
PriceMetrix is an industry leader in advisor productivity. Launched 10 years ago and based in Toronto, today it works with 20,000 advisors from 20 firms in the United States and Canada.
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September 2010: ‘Advisers Embracing Banking Products’
When the financial crisis forced some mergers of banks and brokerages in 2008, there were predictions of an imminent culture war: Banks would want their products pushed, and financial advisers would push right back.
The fight fizzled. Two years later, the financial advisers who once considered themselves above banking products are embracing the business--largely because they need it in a volatile investment market.
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September 2010: ‘One key to being a million-dollar producer? Dumping smaller clients, survey finds’
PriceMetrix found that the average adviser generates a measly $350 in fees and commissions annually from the average small account. At that rate, an adviser needs business from 239 small households to produce the same revenue as one client with $1 million in assets or more.
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August 2010: ‘Wealth Manager - Discounts a dilemma for wealth managers’
There are limits on discounting, but brokers push against them," said PriceMetrix Chief Executive Doug Trott, whose firm specializes in software for retail brokerages. "Brokers say: 'If you don't give me an exception to go below the minimum, the client will leave,' and managers almost always cave."
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July 2010: 'Setting Your Own Commission—35 years Later'
The financial advice business underwent a revolution 35 years ago when the US Securities & Exchange Commission abolished fixed commissions on stock transactions. “May Day,” as many still refer to May 1, 1975, the day the SEC’s order went into effect, completely changed our business and set off a chain reaction of events that shaped much of our industry today. Companies like Muriel Siebert and Charles Schwab were launched, creating the powerful discount broker subcategory.
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June 2010: ‘PriceMetrix Takes Pricing Out of the Dark’
PriceMetrix has launched a tool for advisors and broker-dealers to help them determine how much commission to charge on equity trades, which is critical given that many advisors tend to undercharge for their work.
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May 2010: 'PriceMetrix introduces market-based equity commission schedule'
Toronto-based PriceMetrix Inc. has developed a publicly available market-based commission schedule to help U.S. broker-dealers and their financial advisors determine appropriate commissions on equity trades.
The schedule is intended to make commissions more transparent for advisors and investors, and to provide a guideline for advisors when they’re determining commissions. It’s available to all firms and advisors at no cost.
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April 2010: 'Doug Trott introduces new PriceMetrix Commission Schedule on BNN's 'Market Morning'
Doug Trott, President and CEO of PriceMetrix, discusses the new PriceMetrix Equity Commission Schedule with hosts Martin Cej and Frances Horodelski on BNN's national morning show, 'Market Morning'.
View the video
April 2010: 'PriceMetrix launches free equity commission guide'
PriceMetrix Inc. is introducing a market-based commission guide today that financial advisers can use to determine what to charge for commissions on securities trades.
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September 2009: 'PriceMetrix ValueOne Increased In Popularity'
PriceMetrix ValueOne users have fared well in what has been a tumultuous financial period filled with anxious clients and significant industry change and consolidation.
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July 2009: 'ComputerWorld Finalist: Value One Case Study'
The PriceMetrix ValueOne Program delivers a unique brand of business intelligence to help financial advisors improve the value of services they provide to their retail investor clients.
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June 2009: 'Morgan Stanley deploys ValueOne application'
PriceMetrix recently began rolling out its ValueOne brokerage-comparison application to just under 1,000 of Morgan Stanley's 7,500 advisers.
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May 2009: 'PriceMetrix launches commission tool'
Toronto-based PriceMetrix has announced the release of CommissionCheck, a tool that provides retail advisors and broker/dealers with real time market comparables to help ensure their commissions on trades are properly priced.
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May 2009: How PriceMetrix Got Its 'Big Fish'
' We took on a lot of risk to go after Morgan Stanley'
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November 2007: 'Smith Barney: Cleaning Up a Mess'
Two unappealing compensation packages give way to one generous, simple plan.
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November 2007: 'Setting the perfect price: a fool's errand?'
Are you charging too little? Knowing how much to charge in fees versus commissions can be tough for an advisor. A brief look at how to prevent under pricing your services.
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October 2007: 'Is Your Price Right?'
A select group of advisors are significantly increasing their planning fees. Here's the lowdown on unbundling and how your pricing helps or hurts your bottom line.
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October 2007: 'A Shot in the Dark - Are You Charging What You Are Worth?'
How do investment advisors decide what to charge clients for their services? Should a full-service representative base pricing for services and advice on what discount brokers charge? PriceMetrix helps advisors tap into the opportunities for increased assets and revenues.
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October 1, 2007: 'Snapshots of Five Regionals'
A brief snapshot of five not so small regional investment firms and how their pros and cons have put them in the spotlight.
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