Wealth Advisory Practice Economics: AUM Fees, Client Profitability & Practice Value

What you'll build

What you will be able to do

Each lab ends with a concrete result that you build yourself and the checker confirms, cell by cell.

• Price every client of Brookmere Wealth Partners on a tiered fee schedule, calculate each client's blended fee and the fee rate of the whole firm.
• Project Brookmere Wealth Partners's AUM for five years from market returns, new client assets and outflows, turn it into fee revenue and separate growth from markets and from flows.
• Sort Brookmere Wealth Partners's clients into AUM segments with a lookup, apply a minimum annual fee and see what the minimum does to the effective fee of small clients.
• Turn Brookmere Wealth Partners's service model into hours, measure how full the advisors are and how many advisors the firm needs at a healthy capacity use.
• Allocate Brookmere Wealth Partners's advisor time and technology cost to each client, calculate profit and margin per client and find the clients the firm serves at a loss.
• Cut Brookmere Wealth Partners's blended fee by 5, 10 and 20 basis points and measure what happens to revenue, profit and margin, and how much extra AUM it would take to make up for it.
• Build Brookmere Wealth Partners's two-year P&L, calculate operating profit, operating margin and the compensation ratio, and read the margin change in percentage points.
• Value Brookmere Wealth Partners three ways, with a multiple of recurring revenue, a multiple of operating profit and a simple five-year DCF, and compare them in a chart.