A successful financial advisor once said, “I can tell my clients exactly where their money is going, but for years, I had no idea where my own business was coming from.” It’s a common challenge — advisors spend so much time analyzing data for their clients that they overlook the numbers driving their own success. But without tracking key metrics, how do you know if that radio ad was worth the investment? Or where to focus your marketing efforts next year?
Understanding your firm’s performance isn’t just about reviewing reports — it’s about identifying opportunities, optimizing efficiency, and ensuring long-term stability. The good news? You don’t need to track everything, just the right things.
Here are 10 essential metrics to help you make confident, strategic decisions for your firm’s growth.
Big Picture Metrics
These metrics track the firm’s overall financial performance and can highlight growth or decline patterns, as well as opportunities to expand or achieve new goals.
Net and Gross Profit
Gross profit measures the revenue a firm makes minus direct business costs. Net profit, on the other hand, is the profit remaining after all business expenses. Tracking both of these metrics helps firms understand not just how much money they are bringing in but how they are spending money and their current expenses. Net and gross profit can show changes in overall profitability and if business expenses are cutting into profits.
Total Assets Under Management
Assets under management (AUM) is a critical metric for advisors to know individually, but it’s also telling for the firm as a whole. AUM impacts advisors’ compensation and is a good indicator of the firm’s overall health. If the total AUM is steady or growing, the firm is generally in a strong position. However, if the total AUM is slipping, clients may not invest as much money, which can signal a decline in the firm’s profitability.
However, it’s not just about the total AUM — it’s also important to consider the age of the clients holding those assets. As clients age, their wealth may transfer to heirs who may not stay with your firm. Keeping an eye on generational wealth transfer and building relationships with beneficiaries can help retain assets and ensure long-term stability.
Client Metrics
These metrics measure your clients and can highlight trends in client behavior and other potential client groups to target.
Average Revenue Per Client
Breaking down the average revenue per client shows how much each client brings in for the firm. It can help advisors segment clients based on their value and tailor their approach to individual clients. Because acquiring new clients is expensive, the goal should be to have a high average revenue per client.
Time Spent Per Client
Spending time with clients is the best way to strengthen the advisor-client relationship. Tracking how much time advisors spend with clients on average can be eye-opening to show how much time is actually spent interfacing with clients. This metric highlights a difficult balance for advisors: spend enough time per client to have a strong relationship but not too much that it limits how many clients they can serve.
Client Retention Rate
Client retention rate tracks how many clients stick with a firm after a certain point, typically every year. This metric shows if clients are long-term and if there is a pattern of when they leave the firm. Understanding client retention rates can help create and track measures to keep clients for longer.
Lead Generation Metrics
These metrics track your lead pipeline so that you have a steady stream of potential leads and can understand how your firm is growing.
Client Acquisition Cost
Acquiring new clients is expensive, between the lead generation and marketing costs and the time and resources spent onboarding them. Tracking client acquisition cost can help firms understand which efforts are the most cost-effective to bring in new clients and grow the firm sustainably.
Referral Rate
One of the most cost-effective ways to attract new clients is through referrals from current clients. The referral rate highlights what clients think of a firm because they likely won’t recommend a firm or advisor they don’t trust or enjoy. It also can help firms understand how many leads are generated organically and where to focus lead generation efforts.
Tracking the right metrics isn’t just about growth — it’s about making informed decisions that improve efficiency and profitability. Ever have those clients who need constant nudging to provide the information you need to do your job? While they may not mean to be difficult, the time and effort spent chasing them down can add up. Understanding the impact of these clients on your bottom line can help you decide where to focus your energy — or you can automate the process entirely.
With PreciseFP, you can eliminate the back-and-forth by automating data collection and setting reminders to follow up after a certain number of days. Instead of spending valuable time chasing down forms and documents, let PreciseFP do the work for you. Start your free trial today and take the guesswork out of client engagement while keeping your firm running smoothly.
