The Perfect RIA Encore Episode: Measure What Really Matters?
11 snips
Nov 7, 2025 Dive into the world of advisor effectiveness as hosts peel back common misconceptions about metrics. They expose how traditional indicators like AUM can mislead, revealing the importance of tracking revenue per hour instead. Hear why office hours and household counts are merely trophies rather than true measures of success. Gain insights on how precise record-keeping uncovers inefficiencies and how accountability can accelerate improvement. Embrace continuous learning to drive your practice forward and prioritize what really matters.
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The 1% Fee That Wasn't
- Micah gives a concrete example: an advisor who thinks they bill 1% on $100M and expects $1M revenue.
- Their P&L instead showed $497k, exposing either wrong AUM or incorrect fee assumptions.
Use Accurate ADV As Your AUM Source
- Track ADV accurately and never inflate it for external lists or bragging rights.
- Use your clearing firm's ADV as the authoritative AUM figure and avoid creative gross-ups.
Vanity Metrics Mask True Performance
- Common vanity metrics (hours in office, households, trades) don't reveal true practice effectiveness.
- Jarvis and Shilanski argue these are badges of honor but not the key performance indicator.