For financial advisory firms, the bottom line may be dollars and cents, but experienced industry professionals understand that the most valuable currency of all is information: the information they rely on to make strategic investment and money management decisions, and the information they convey to their clients about the results of those decisions.
It is no surprise that many financial firms rely on electronic dashboards to help process that information for better decision-making capabilities. Dashboards are powerful tools designed to consolidate, coordinate and convey large amounts of data in a clear and concise way. However, not all dashboards are created equal. Understanding the differences between various types of dashboards is critical, especially for firms looking to adopt a new dashboard solution or expand their existing dashboard capabilities. Financial advisory decision makers should understand the basics about how to efficiently integrate multiple dashboards into their firm’s workflow — and appreciate how dashboards and the data they display can be leveraged effectively.
Financial professionals who take the time to educate themselves about these issues will be better prepared for the sometimes unforeseen challenges that arise when advisors add a new dashboard or change their existing platform. They will also have a more sophisticated understanding of what they need to do to prepare for and overcome those challenges.
While many financial advisory firms utilize some version of dashboard technology, the speed at which these tools evolve has increased. The diverse spectrum of capabilities that only the best solutions can provide makes a review of their design priorities and technical functionality an important prerequisite to a more advanced discussion.
The best dashboards are technically complex but extremely easy to use. They are designed to integrate large amounts of data (frequently pulled from disparate systems and sources) into a straightforward single-screen visual interface. Effective dashboards are unique in their ability to coordinate and display big data, presenting a real-time view of selected metrics that is not just accessible and informative, but also visually engaging.
The intuitive and user-friendly nature of a well-designed dashboard allows users to acquire a deeper, more detailed understanding of their business in a single glance. By boiling down a wide range of variables into a streamlined presentation, the best dashboard solutions provide meaningful insights into the most complex operations. And because dashboards integrate information from multiple sources, and connect that information to key metrics, they can reveal important trends and relationships that may not have been otherwise apparent.
The best solutions are highly customizable, both in terms of design and usability. Dashboards make it possible to easily track progress toward milestones or clearly delineated goals and objectives. The result is an unprecedented level of accessibility and transparency, with greater efficiency, additional clarity and the ability to focus on specific data sets to gain additional insight and perspective regarding key performance indicators.
Fundamentally, dashboards are a solution to the market’s demand to calculate, track and deliver critical metrics in a better way. The problem is that while many see and appreciate the power of a well-designed dashboard, few know how to integrate dashboards into their own operation.
That process should begin with a thoughtful analysis about which metrics those dashboards need to show. While there are obviously similarities between financial advisory firms, every company has its own set of priorities and operational nuances. Designing customized dashboards to address those priorities requires a “storyboarding” process on the front end. The storyboarding process helps integrate multiple dashboards into a form with the right information, at an appropriate pace and in a strategic manner. This discovery process helps answer critical questions, such as who is the primary audience that will be utilizing these dashboards; that is, is it clients, professional partners or primarily internal users? What are the core KPIs and metrics that need to be on those dashboards? What are the main issues these dashboards are designed to address?
Analyzing the Data
Once you lay out the strategic way your dashboards will be used, the next step in a seamless integration process is to dig into the data-related details so that the actual integration of the data can be done on the back end.
Companies need to determine if they will be using one consolidated dashboard or a set of strategically laid out dashboards that incorporate all of their different platforms. First, examine where your data “lives.” One set of metrics might come from one source, another from a different piece of software and another from an entirely different spreadsheet. With a roadmap in place, the dashboard can be built to pull all of those disparate data streams together.
The data that may become part of the dashboard encompass a wide range of measurables. They include internal KPIs like gross revenue, direct and overhead expenses, net operating profit, gross profit margin, percentage of revenue from new and existing clients, client retention rates, asset retention rates, average revenue per client and the distribution of revenue per client. When it comes to client deliverables, dashboards can track and display variables like high-quality money market funds for cash investments; high-quality corporate bonds, U.S. treasuries, municipal bonds and preferred stock securities for fixed-income; large-cap growth and value, dividend-growth stocks, mid-cap growth and value, small-cap growth and value, and international equities for equities; and real estate investment trusts, commodities, master limited partnerships, high-yield bonds and long-short funds for alternative investments.
Because many financial advisory companies already have some kind of basic dashboard or reporting system in place, it makes sense to appreciate the specific challenges associated with moving from one dashboard platform to another, as well as best practices that can help ensure those challenges are addressed and the transition is seamless.
Transition planning. Financial firms looking to switch from one dashboard to another will frequently need to start from the beginning. Understand that no two tools are going to interpret and manage the data the same way. It is important to have some resources in place to streamline the transition. Companies should anticipate going through a quick storyboarding process, followed by a data assessment (determining what the data is, where it lives and ensuring it is in the right format). When a company relies on outdated software, accessing source data can be tricky and may require either a dashboard specialist or an IT consulting company to retrieve and unlock inaccessible data. But some dashboard consultants can provide sophisticated data integrator tools to make this process much easier and more efficient.