KPIs to Track For The RIA’s Eight-Figure Exit • Financially Simple


As you work toward the eight-figure exit, you’ll need to track and monitor your progress along the way. Without a system to track your RIA’s progress, you might as well be playing Pin the Tail on the Donkey. Unless you’re actively monitoring your firm’s performance toward your objectives, you’re really only hoping you reach your goals. In today’s entry, I want to explore some of the KPIs to track in your organization so you can be confident you’re moving in the right direction.

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The Basics: What Are KPIs?

Before we get too far into the weeds, I want to take a moment to add some clarity. So, what are KPIs? According to Qlik, Key Performance Indicators (KPIs) are quantifiable performance measures over time for a specific objective. They go beyond simple metrics by providing targets for teams to aim for, milestones to assess progress, and valuable insights that assist decision-making across the organization.

While KPIs are similar to metrics, they are the key targets you should track to have the most impact on your strategic business outcomes. They support your overall strategy and help your teams focus on what truly matters. For example, a key performance indicator could be “targeted new customers per month.”

On the other hand, metrics measure the success of everyday business activities that contribute to your KPIs. While they impact your outcomes, they are not the most critical measures. Some examples of metrics could be things like “monthly client touches” or “white paper downloads.” Although metrics can be great tools in your business, they aren’t likely to tell the story you need to hear.

KPIs to Track in Your RIA

As an RIA owner striving to reach the eight-figure exit, monitoring the key performance indicators that align with your goals while providing insights into the health and performance of your business is a necessity. To help get you started, let’s look at which KPIs to track, and their value.

Average Revenue Per Employee

The average revenue per employee KPI can shed light on how each employee contributes to your top line. The 2022 RIA Benchmarking Study by Charles Schwab indicates that RIAs with assets under management (AUM) between $250M and $500M have an average revenue per employee of around $331,857. Tracking this key metric helps you to understand the efficiency of your team. In turn, this enables you to make well-informed decisions regarding your workforce.

Average Revenue Per Household

The next KPI to track is the average revenue per household. Tracking this KPI gives you deeper insight into the profitability of each client relationship. You can find this number by dividing your total revenue by the number of households you serve. For example, if you’re drawing an annual revenue of $10M while serving 75 households, your average revenue per household would be $133,333. Your average revenue per household can help you identify opportunities to enhance revenue from existing clients and optimize your book of business.

Number of New Service Requests Each Month/Quarter

Monitoring the number of new service requests received within a specific timeframe allows you to gauge the demand for your services. This KPI indicates the effectiveness of your marketing and client acquisition efforts. A greater number of new service requests could indicate a growing client base and increased market penetration. Additionally, this could inform hiring decisions to accommodate growing demand.

Number of Completed Service Requests Each Month/Quarter

Following the previous KPI, your number of completed service requests helps you measure the efficiency and effectiveness of your service delivery. By tracking this KPI, you can ensure that your team is meeting client needs in a timely fashion. Consistently high numbers indicate a well-functioning operational process and satisfied clients.

Average Number of Completed Service Requests Per CRA

Similarly, you’ll want to look at the average number of completed service requests per Client Relationship Associate (CRA). This KPI helps to assess the productivity and workload of your CRAs. Once again, the calculation is simple. Dividing your total number of completed service requests by your total number of CRAs will help you identify potential imbalances and opportunities for improvement. The real benefit of tracking this KPI is that it allows you to optimize your resource allocation to ensure manageable workloads across your team.

Number of Households Per Offer Manager

Like the last KPI, tracking the number of households assigned to each offer manager provides insights into the workload and capacity of your team members. This information can help you determine whether your offer managers can effectively handle their client load without being overwhelmed or bogged down. Monitoring this number puts you in control of balancing client relationships and quality of service.

Net New Revenue Per Month/Quarter

Next in line of KPIs to track is net new revenue per month/quarter. This KPI gives you a look into the revenue gained from new clients or additional business from existing clients, minus any revenue lost from client attrition. Monitoring net new revenue can give you a clear picture of your firm’s growth and sustainability. A positive net new revenue indicates healthy client acquisition and retention efforts.

Revenue Per Meeting

Folks, this KPI is powerful. Basically, it measures how effectively your client meetings generate revenue for your firm. As a financial advisor, it’s so important to prioritize our time and maximize value. This key performance indicator enables you to identify opportunities to improve meeting outcomes and maximize the value of client interactions.

Average Number of Meetings Per Advisor

As I just stated, time management and optimizing the value of that time is so important for financial advisors. If you want to position your RIA in a way that makes the eight-figure exit possible, you’ll need to watch this next KPI. Tracking the average number of meetings per advisor helps you assess whether you and your fellow advisors are being as efficient as possible when meeting with clients.

Although serving clients is why we do what we do, effectively managing our time when doing so can be a problem area for many advisors. In fact, Kitces Research found that the average advisor spends nearly 27 hours per week on client service. This includes meetings and the preparations involved.

Average Revenue Generated Per CFP Hour

This key performance indicator goes hand-in-hand with our last one and is listed as one of the top-five KPIs that RIAs need to track. This valuable KPI links the time spent by advisors on each client to the revenue generated per hour. By understanding the revenue generated per hour for various clients, you can assess the profitability and overall value of different client relationships.

Number of New Accounts

Going back to the 2022 RIA Benchmarking Study, we find that RIAs with written marketing plans, ideal client personas, and client value propositions attracted 42% more new clients. By tracking the number of new accounts acquired by your firm, you can evaluate the effectiveness of your marketing and client acquisition strategies. The number of new accounts provides you with great insights into your firm’s market appeal and growth potential.

Wrapping Up…

Friends, I am passionate about helping others. This is especially true of fellow entrepreneurs. I want you to achieve the eight-figure exit. It’s why I began Financially Simple all those years ago. In order to get there, you’re going to have to track many KPIs. Key performance indicators serve as vital tools for understanding the health and performance of your RIA. When you monitor them, you gain valuable insights and the power to drive your business in the direction you want it to go. If you’re interested in learning more about the KPIs to track in your RIA, be sure to listen to the podcast linked above.

Look, life is hard. It is full of stress and problems. But with the right perspective, life is good. Driving your RIA toward the eight-figure exit can be frustrating, but it doesn’t have to be. By tracking a few important KPIs, you can gain the perspective needed to make positioning your firm for the dream exit, at least, financially simple. Hey, let’s go out and make it a great day!

Solidifying and monitoring the KPIs that can help drive your firm toward the eight-figure exit can be a lengthy process. Don’t try to do it alone. Reach out to our team to learn how we could help you reach your goals.

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