David Park Creates KPI Dashboard, Improves Advisor Productivity by 18%

David Park Creates KPI Dashboard, Improves Advisor Productivity by 18%

Executive Summary

Summit Capital Partners, a rapidly growing RIA managing over $750 million in assets, struggled with a lack of clear visibility into key performance indicators (KPIs), hindering efficient performance management and strategic decision-making. Golden Door Asset developed a customized KPI dashboard integrated with Summit's existing technology stack to address this challenge. The implementation of this dashboard led to an 18% improvement in advisor productivity, enabling Summit to generate more revenue with its existing resources and improve client outcomes.

The Challenge

Summit Capital Partners experienced significant growth in assets under management (AUM) and client base over the past three years, increasing AUM from $350 million to over $750 million. While this growth was positive, it exposed critical operational inefficiencies. David Park, Chief Operating Officer at Summit, recognized the need for a more data-driven approach to manage the expanding firm effectively.

Specifically, the firm faced the following challenges:

• Lack of Real-Time Performance Data: Advisors lacked immediate access to their performance metrics, such as new client acquisition rates, AUM growth attributed to new and existing clients, and client retention rates. Data was scattered across multiple systems, including their CRM (Salesforce), portfolio management system (Orion), and marketing automation platform (HubSpot), requiring manual data aggregation and analysis. This process was time-consuming and prone to errors, delaying informed decision-making.
• Inefficient Performance Reviews: Performance reviews were subjective and relied heavily on anecdotal evidence rather than objective data. This made it difficult to identify areas where advisors were underperforming and to provide targeted coaching and support. For instance, identifying advisors consistently below the firm's average AUM growth rate of 12% per year required significant manual effort, often delaying intervention by several months.
• Difficulty in Identifying Top Performers: The lack of readily available performance data made it challenging to identify top-performing advisors and to understand the factors contributing to their success. Sharing best practices across the firm was difficult, hindering overall team performance improvement. Summit estimated that the inability to effectively replicate top-performer strategies was costing them an additional 2% in potential AUM growth annually, representing roughly $15 million in missed opportunities.
• Suboptimal Marketing Spend Allocation: Marketing campaigns were not effectively tracked to determine their impact on client acquisition and AUM growth. This resulted in suboptimal allocation of the $250,000 annual marketing budget. For example, they could not easily determine which lead sources were generating the highest quality leads or which marketing messages were most effective at converting prospects into clients.
• Client Attrition Risks: Identifying clients at risk of attrition was challenging. Without a clear view of client engagement metrics and satisfaction levels, Summit struggled to proactively address potential issues and retain clients. The client attrition rate hovered around 5%, costing the firm approximately $37.5 million in AUM annually.

David Park knew that addressing these challenges was crucial for Summit's continued success. He sought a solution that would provide real-time visibility into key performance indicators, streamline performance management processes, and ultimately improve advisor productivity.

The Approach

Golden Door Asset partnered with Summit Capital Partners to develop a customized KPI dashboard that addressed their specific needs. Our approach was based on a four-step process:

1. Needs Assessment and KPI Identification: We conducted a series of workshops with Summit's leadership team and advisors to understand their key business objectives and identify the most relevant KPIs to track. We considered KPIs across various areas, including:
   • Client Acquisition: Number of new clients acquired per month/quarter, cost per acquisition, conversion rates from leads to clients.
   • AUM Growth: AUM growth from new clients, AUM growth from existing clients, overall AUM growth rate.
   • Client Retention: Client retention rate, churn rate, reasons for attrition.
   • Client Satisfaction: Net Promoter Score (NPS), client feedback scores.
   • Advisor Productivity: Revenue per advisor, AUM per advisor, number of client meetings per month.
2. Data Integration and ETL (Extract, Transform, Load) Process: We established secure connections to Summit's existing data sources, including Salesforce, Orion, and HubSpot. We implemented an ETL process to extract data from these sources, transform it into a consistent format, and load it into a centralized data warehouse. This process ensured data accuracy and reliability. We developed custom scripts to handle the complexities of integrating data from different systems, including mapping data fields and resolving data inconsistencies.
3. Dashboard Design and Development: We designed a user-friendly, interactive dashboard using Tableau. The dashboard provided advisors and management with a clear, concise view of their key performance indicators. Features included:
   • Real-time data updates: Data was refreshed automatically every 15 minutes, ensuring advisors always had access to the latest information.
   • Interactive visualizations: Data was presented in visually appealing charts and graphs, making it easy to identify trends and patterns.
   • Drill-down capabilities: Users could drill down into specific data points to gain deeper insights. For example, they could drill down into AUM growth by advisor to identify top performers or underperformers.
   • Customizable views: Advisors could customize the dashboard to focus on the KPIs that were most relevant to them.
4. Training and Support: We provided comprehensive training to Summit's advisors and management team on how to use the dashboard effectively. We also provided ongoing support to address any questions or issues that arose. The training included hands-on workshops and customized documentation. We also established a dedicated support channel to ensure timely resolution of any technical issues.

This comprehensive approach ensured that Summit Capital Partners had the tools and knowledge necessary to leverage data-driven insights to improve advisor productivity and achieve their business goals.

Technical Implementation

The technical implementation of the KPI dashboard involved the following steps:

1. Data Warehouse Setup: We selected a cloud-based data warehouse (Amazon Redshift) to store and manage Summit's data. We chose Redshift for its scalability, performance, and cost-effectiveness.
2. ETL Pipeline Development: We developed an ETL pipeline using Python and Apache Airflow to automate the data extraction, transformation, and loading process. The pipeline consisted of the following steps:
   • Data Extraction: We used the APIs provided by Salesforce, Orion, and HubSpot to extract data from these systems. We implemented error handling and logging mechanisms to ensure data integrity. Specifically, for Orion, we pulled data via their API regarding client portfolio performance, asset allocation, and transaction history.
   • Data Transformation: We transformed the extracted data into a consistent format, including data cleaning, data validation, and data aggregation. We used SQL queries to perform data transformations and calculations. This involved calculating metrics like annualized returns, Sharpe ratios, and client lifetime value.
   • Data Loading: We loaded the transformed data into the Redshift data warehouse. We used the COPY command to efficiently load large volumes of data.
3. Tableau Dashboard Development: We used Tableau to create the interactive KPI dashboard. The dashboard included the following visualizations:
   • Client Acquisition Dashboard: Tracked new client acquisition rates, cost per acquisition, and conversion rates from leads to clients. Included visualizations such as bar charts, line charts, and heatmaps. We segmented leads by source (e.g., referrals, online advertising, seminars) and tracked conversion rates for each source. We also calculated the average time to conversion for each lead source.
   • AUM Growth Dashboard: Tracked AUM growth from new clients, AUM growth from existing clients, and overall AUM growth rate. Included visualizations such as line charts, area charts, and scatter plots. We benchmarked advisor performance against the firm's average AUM growth rate and identified outliers. We also tracked the impact of market performance on AUM growth.
   • Client Retention Dashboard: Tracked client retention rate, churn rate, and reasons for attrition. Included visualizations such as pie charts, bar charts, and survival curves. We analyzed client demographics and investment preferences to identify factors associated with attrition. We also tracked client engagement metrics, such as website visits and email open rates, to identify clients at risk of attrition.
   • Client Satisfaction Dashboard: Tracked Net Promoter Score (NPS) and client feedback scores. Included visualizations such as bar charts, gauge charts, and word clouds. We analyzed client feedback to identify areas for improvement. We also tracked the relationship between client satisfaction and AUM growth.
   • Advisor Productivity Dashboard: Tracked revenue per advisor, AUM per advisor, and number of client meetings per month. Included visualizations such as bar charts, scatter plots, and box plots. We benchmarked advisor performance against industry averages and identified best practices. We also tracked the relationship between advisor activity and AUM growth.
4. Security Implementation: We implemented robust security measures to protect Summit's data, including encryption, access controls, and regular security audits. We complied with all relevant regulations, including SEC guidelines and HIPAA requirements. We used multi-factor authentication to protect access to the data warehouse and Tableau dashboards.

The technical implementation was carefully planned and executed to ensure data accuracy, reliability, and security.

Results & ROI

The implementation of the KPI dashboard yielded significant results for Summit Capital Partners:

• Improved Advisor Productivity: Advisor productivity increased by 18% within the first six months. This was attributed to advisors spending less time on manual data aggregation and analysis and more time on client-facing activities. Specifically, the average number of client meetings per month increased from 12 to 14, and the average AUM per advisor increased from $37.5 million to $44.25 million.
• Increased AUM Growth: AUM growth increased by 15% in the first year. This was due to improved client acquisition and retention rates, as well as more effective cross-selling and upselling. New client acquisition increased by 12%, while client retention improved by 3%. The firm also saw a 10% increase in revenue from existing clients.
• Reduced Client Attrition: Client attrition rate decreased from 5% to 3% within the first year. This resulted in significant cost savings for the firm. Reducing attrition saved Summit roughly $15 million in AUM and avoided the costs associated with acquiring new clients to replace those that left.
• Optimized Marketing Spend: The firm was able to optimize its marketing spend by identifying the most effective marketing channels and campaigns. The cost per acquisition decreased by 10% as a result. By analyzing the data on lead sources and conversion rates, Summit reallocated 20% of its marketing budget to higher-performing channels, resulting in a 15% increase in lead generation.
• Data-Driven Decision Making: The dashboard empowered Summit's management team to make more informed decisions based on real-time data. This led to improved strategic planning and resource allocation. For example, the firm was able to identify underperforming advisors and provide them with targeted coaching and support.
• Cost Savings: The implementation of the KPI dashboard resulted in significant cost savings for Summit. The firm reduced its administrative costs by 15% by automating data aggregation and analysis. They also saved an estimated $50,000 per year by reducing errors associated with manual data entry and reporting.

In summary, the KPI dashboard provided Summit Capital Partners with the data-driven insights they needed to improve advisor productivity, increase AUM growth, reduce client attrition, and optimize marketing spend. The ROI of the project was significant, with the firm realizing a full return on its investment within the first year.

Key Takeaways

• Data-driven insights are essential for effective performance management: RIAs should invest in tools and processes that provide real-time visibility into key performance indicators.
• Customized dashboards can significantly improve advisor productivity: Tailoring dashboards to the specific needs of advisors can help them focus on the most important metrics and make better decisions.
• Data integration is crucial for creating a comprehensive view of performance: Integrating data from multiple sources can provide a more complete and accurate picture of performance.
• Ongoing training and support are essential for successful dashboard adoption: Advisors need to be trained on how to use the dashboard effectively and provided with ongoing support to address any questions or issues.
• Regularly review and refine KPIs: The KPIs tracked should be aligned with the firm's strategic goals and regularly reviewed to ensure they are still relevant and effective.

About Golden Door Asset

Golden Door Asset builds AI-powered intelligence tools for RIAs. Our platform helps advisors unlock hidden insights from their data and make smarter decisions. Visit our tools to see how we can help your practice improve client outcomes and drive growth.