Fidelity Launches Practice Management Benchmarking Dashboard for RIAs

There are four main goals that David Canter and his team of Fidelity Institutional Wealth Services practice management consultants and relationship managers are trying to accomplish on behalf of RIAs who custody with Fidelity IWS. They are: helping advisors grow; helping them be more efficient; keeping them current on regulatory and legislative developments in Washington; and managing human capital at their advisory firms.

As part of that effort, Fidelity IWS announced Wednesday that it has launched a benchmarking program and a Web-based practice management dashboard tool for its affiliated advisors. Using as a springboard the 2011 Fidelity RIA Benchmarking Study, on which it partnered with Quantuvis Consulting (and with whom it will continue to work on future studies and building the dashboards), Canter said in an interview Tuesday that the study and dashboards are meant to not merely allow RIA firms to benchmark themselves against the broader industry and their specific peer groups, but also to provide actionable steps to achieve their goals and monitor progress toward those goals.

“If firms want to grow, they have to devote resources” to achieving those goals, Canter (left) counseled, beyond merely hiring a business development officer. “This benchmarking program doesn’t just put benchmarking findings into a box,” Canter said, but is a true, “dynamic” business planning tool that allows firms to set goals for themselves.

The benchmarking dashboards–which provide both financial and marketing views–allow firms to insert their business financials and service data quarterly into a secure website, and then to choose up to 38 peer groups, based on metrics like business model, AUM, numbers of employees, annual revenue and region, and benchmark themselves to firms that are not only like theirs, but also to firms that they aspire to be like. Using dials for separate measurements, the firms can include their own goals to see how they are performing against those goals and their peers.

The marketing dashboards cover metrics like the number of clients added to the firm, marketing expenses, acquisition cost per new client and marketing costs per advisor.

Sporting an intuitive approach using an online wizard, the dashboards meet advisors’ needs for an online tool–“advisors want elegant and easy,” said Canter–while in a future iteration, said Mathias Hitchcock, part of Canter’s team, advisors will be able to upload their financials from standard accounting software packages, and download their data as well from the dashboard. A future iteration of the dashboards, said Canter, might include the ability for advisors to share their data with other advisors in a custom peer group.

Advisory firms are given the option of sharing their data with Fidelity, which will allow Fidelity IWS’ relationship managers “to offer more targeted consulting,” said Hitchcock, who joined Fidelity IWS in 2008 and has been working on the benchmarking tool for the past 18 months.