“A benchmark creates a baseline to see where a business is and helps a firm plan where it wants to grow,” says Schoenbeck. “In addition, benchmarks can help internally. For instance, if a firm starts a new marketing campaign, the benchmark can show the impact of the campaign over time.”
ActiFi Inc., a consulting and assessment firm based in Plymouth, Minn., says financial firms need to see where they stack up in comparison to firms of similar size providing similar services.
“We help firms identify where they are not as strong as they thought they were and plan ways to make improvements,” says Spenser Segal, CEO of ActiFi. “We had one client where 60 percent of the clients were taking up 60 percent of the firm’s time, but were only generating 5 percent of revenue. The firm needed to know how to segment their clients and focus on their ideal clients.”
If a firm is not serving clients efficiently, changes may be needed, he added. In some cases, more staff is needed to support the revenue generators.
The big question for any firm is deciding what it wants to be and who it wants to serve, and plan an efficient growth rate from there, says Alan Dole, wealth manager at Equity Concepts, a wealth management firm in Richmond, Va. The firm was started by a sole practitioner 25 years ago and has grown since then.
It now manages $875 million in client assets and has set its goal at growing 10 percent to 20 percent a year. “You have to decide who you want to compete against,” he said.