Benchmarking Surveys are long. They ask a lot of questions. They make you gather all kinds of data about your firm. The questions are often unclear or just confusing. They feel like you are filing a second federal tax return.
Benchmarking Surveys are long. They ask a lot of questions. They make you gather all kinds of data about your firm. The questions are often unclear or just confusing. They feel like you are filing a second federal tax return.
But you know what… When you complete the process, what you have is a thorough and accurate understanding of your own firm. An understanding that you may have thought you had but perhaps this process has enhanced it and made it more factual and data-driven. Many of the questions are a reason to pause and consider the answer. Much of the data needed is data you should gather and examine routinely. Many of the pieces of information you need are pieces you should share with your partners. In other words, much like a spring cleaning, a benchmarking survey can be laborious but a great chance to revisit every corner of your own house.
Here are the best reasons to participate in a survey like the 2013 InvestmentNews/Moss Adams Compensation & Staffing Survey:
1. It will help you gather and organize data you should have – I strongly believe that there is a correlation between how quickly a firm can produce financial statements and payroll information and its business success. A good firm should have this information readily available at its fingertips.
2. It will validate your understanding of your own business – We all do it! I do it too! We exaggerate and oversimplify our own numbers and we lose sight of them. Advisers will tell me that they have a $1 million revenue practice and I look at the numbers and only see $800,000. They tell me they have payroll of $350,000 – I look at the numbers and see $450,000. They say that they have a 25% profit margin – I only see 17%. An actual good look at the numbers can correct many of these inadvertent rounding errors which can be very significant in making business decisions.
3. It will force you to answer questions that are important to consider – Some of the questions that a survey will ask are questions worth pondering in partner meetings and business planning sessions. Questions such as – what services you provide? What is your compensation philosophy? How do you train new employees? Have value in themselves.
4. It may entice you to look at things you have ignored but shouldn't – Some of the data in the survey may be quite telling. For example – what are the sources of leads? What is the amount of assets lost due to distributions? How much of the growth was the market vs. new business development? Particularly the flow of assets and leads is something many firms don't track but should.
5. It replicates information and questions that are needed for due diligence - If you assemble the information for a benchmarking survey, you will find that it closely matches the kind of information that is asked by acquirers and valuation experts. In fact, if you find yourself in a merger or acquisitions situation, you will find that the survey form can almost act as a due diligence check-list. If you have completed it already, you will impress your merger partners or buyers with how well organized your information is.
(Editor's note: The deadline for the 2013 IN/Moss Adams Compensation & Staffing Study has been extended to June 10. To participate, click here.)
Oh, and you get a free copy of a great report that will help your firm make better business decisions. Please consider participating – we know it takes a while (1-2 hours) but it is worth it. Think of what you ask clients to do when you create their first financial plan – you ask them to gather all of their financial information, answer many questions and consider many decisions. Some clients may tell you that “it's a lot of work…” but you probably reply “Yes – but it's worth it!”
Philip Palaveev is an industry expert and highly sought after consultant focused on creating a team-based financial advisory businesses aimed for sustained growth, profitability and value. Philip is the owner and CEO of The Ensemble Practice LLC, a business management consulting firm that defines the evolution of growing a multi-professional advisory practice. The Ensemble Practice is a strategic partner to InvestmentNews Research and the 2013 IN/Moss Adams Adviser Compensation & Staffing Study.
