Moneyball for Advisors

November 2012


Several PriceMetrix clients wanted to know if statistical analyses could be deployed, much as they are in baseball, to help them ensure – rather than simply assume – that they are recruiting the right candidates and allocating resources to those advisors with the greatest potential.

Our research confirmed that analytics can indeed be used to gain an informed advantage in recruiting and development. When it comes to recruiting financial advisors, a hire that is seen as a “success” has certain requisite qualities, including the absence of compliance issues and a healthy margin.

In this groundbreaking edition of PriceMetrix Insights we reveal:

  • All revenue is not created equal. Transactional, trailer and fee revenue are different predictors of future revenue
  • Size matters. The number of large and small households in a book dramatically impact future performance.
  • The depth of client relationships is also a predictor of future production.
  • You might be surprised at the relationship between advisor experience and future performance.

The focus of this report is on production (and growth in production over time) as a hallmark of a successful hire. The answers we provide can assist recruiters in identifying those candidates most likely to add to the future growth of the firm, assist managers and advisors by highlighting those attributes most predictive of future growth in an advisor’s book, and help advisors and managers take action now to best achieve breakaway growth.

This report is made possible by PriceMetrix aggregated retail brokerage data representing 6 million investors, 500 million transactions, 1.6 million fee-based accounts, 7 million transactional accounts, and over $3.5 trillion in investment assets. PriceMetrix combines its patented process for collecting and classifying data with proprietary measures of revenue, assets, and households to create the most insightful and granular retail wealth management database available today.

All results are reported as of December, 2011. PriceMetrix found no significant difference between the U.S. and Canadian markets, so all results presented in this paper are for the combined North American market.

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