As a counterpoint to the flurry of articles about "big data," there could actually be more value to be reaped from "small data." In this context, small data refers to the information that can be accessed and interpreted from within a firm’s own resources. Utilizing "small data" from Total Rebalance Expert® (TRX®) can help advisors identify tax saving opportunities, better manage client portfolios, hone clients based on ideal client mix or fee schedule, target clients to approach for referrals, find opportunities to add qualified plan business or greater client “wallet share”, more effectively manage work flow, and build better client relationships.
Below are just some of the ways TRX can provide useful small data:
In TRX’s Dashboard screen, an advisor can easily see how many households the firm manages as well as total AUM. Simple division can reveal the advisor’s average household AUM.
When accepting new clients, the advisor should consider not taking on clients with less than the current average AUM. This can allow improved efficiencies by not adding clients with a disproportionate amount of work per AUM.
TRX’s Accounts screen allows the advisor to sort by Account Type to see what types of accounts are under management.
If there are many clients with IRAs and not Roth IRAs, there might be opportunities for Roth conversions.
TRX’s Household screen can be sorted by model type, advisor set, rebalance set, preferred buy set, managed/unmanaged, total AUM, last action, and more.
Sorting by model type can reveal which models are more or less popular. The advisor should consider phasing out any models that are rarely used. It is likely that the client(s) involved could be moved to another appropriate model and the firm will simplify its management process.
Identifying clients with non-managed accounts provides a marketing opportunity.
Sorting by managed assets values can pinpoint high priority clients. The firm might consider increasing number of “touches” and/or increasing service levels for these clients.
Utilizing Total Rebalance Expert can produce significant benefits beyond “just” rebalancing and portfolio management. In addition to tax efficiency, TRX provides useful small data enabling advisors to better manage their businesses while keeping and attracting new clients.