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Strategic MI - The key to business success.


It's time to face the facts: Without strategic management information, you're making life hard. But what exactly is strategic MI, and why is it so important to your business?

In short, strategic MI is the collection and analysis of data that helps you make informed decisions about your business's future. With strategic MI, you can identify trends, pinpoint areas of weakness, and develop targeted strategies to improve your business's performance.

So if you're not already using strategic MI, it's time to start. Don't let your competitors leave you behind - take control of your business's future today.

Which MI metrics should you track?

Firms typically have several basic MI metrics readily available, including:

  • Number of clients
  • Assets under management (AUM)
  • Revenue (including ongoing and initial, fixed vs commission)
  • Demographics (such as ages and locations)
  • Segmentation/proposition
  • Client vulnerability

While we consider these metrics to be essential for any firm, we acknowledge that they may not always be easy to obtain. Some back-office systems provide this information with a simple click, while others require more effort to collect and track.

What type of strategic MI should you be tracking?

1. Finding ways to increase your business metrics

There are several business metrics you should consider tracking for your firm, including business valuation, EBITDA, recurring and one-time revenue, and costs. Tracking these metrics, along with other strategic inputs, is indispensable in helping to set your wider business plans. Here are some examples of how strategic management information can help you make more money in the long run:

  • Lifetime Value of a Client - Understanding the projected revenue over the lifetime of a client can help you focus on high value relationships and identify opportunities to better profile and segment them.
  • Top 10 and bottom 10 revenue clients - Understanding the value and demographics of your client base is becoming increasingly important with Consumer Duty regulation on the horizon. Examining the extremes of your clients will provide insights into both your strengths and areas for improvement. Identifying customers who don't meet your firm's key metrics for high value might indicate a lose-lose relationship where neither party is achieving their goals. In such cases, suggesting a better service elsewhere could be beneficial for all parties involved.
  • Net Promoter Score (NPS) is a qualitative measure of how your clients feel about your service and brand. It's not surprising that clients with a higher NPS are more likely to continue doing business with you, increase their business with you, or refer other clients to you.
  • Time spent on particular activities - One activity that consumes a lot of time from an administrative standpoint is the review process. Improving manual processes (and ultimately automating them) is critical for saving costs and scaling up the business in the long run. Therefore, it is important to track this as part of your strategic management information.
2. Tracking your firms strategic objectives

As financial advisers/planners, there is no need for us to explain benefits of goal based financial planning. So to put it simply, you should be practicing what you preach for your own firm.

Vision, Mission, Objectives, and Strategies are well-known business statements that help drive an aligned direction for your firm. Strategic MI is the data tool used to track these statements.

For example, let's consider "Woven Wealth", a firm that is aiming to be acquired in 2024. To make themselves more attractive to buyers, they are exploring ways to improve their financial metrics. The managing director has set some ambitious objectives and key results (OKRs) for H2 2023. Let's take a closer look:

Objective 1: Achieve organic growth of the client base by acquiring new sales, referrals, and family members.

  1. Grow client base from 300 to 500 individuals or 150-250 households
  2. Grow average household fee to £5000 per year
  3. Grow firm AUM to £250m

Objective 2: Achieve inorganic growth by acquiring new clients from external sources.

  1. Hire 2 more advisers
  2. Acquire 1 new firm

Tracking these metrics doesn't require an actuary, but it does require data. The person most engaged with these metrics, who set them, is also the least likely to have time to collate the data throughout the six months needed to track progress.

So how can you track strategic MI?

There are a number of ways you can track the MI we’re talking about in this article!

  1. Your Back-office - Some are better than others! If you don’t know how to access, speak to your account manager and they might be able to help you out?
  2. Woven Advice - Speak to us! With integrations into back-offices, intelliflo office, Iress Xplan and other systems, we’re producing 360 MI for your firm.
  3. Build your own - With just a little bit of tech help, you can integrate your back-office and other data sources into an MI tool, like Microsoft Power BI or Tableau.

Get in contact with Woven if you want to learn more about your MI options.