Optimize Revenue with
Smart Recon
Introducing a new billing method that allows you to keep collecting revenue up front, but does not hinge you on 4 market days per year.
Billing Challenges
Billing quarterly in advance based on the last business day of the quarter is the “traditional” method of AUM fee billing in our industry. In fact, 95% of the firms that come to Smart Kx use this method.
It’s great because- you get paid ¼ of your firm’s revenue in advance!
However, taking a look under the hood, it creates problems:
- Your revenue is entirely dependent on FOUR market days per year
- You inevitably watch the market the last week of the quarter praying a monumental event does not occur.
- Clients live life. They add money, they spend money.
- New clients come onboard. Some clients leave.
- Clients review fees when the market pulls back after you’ve billed them
- Advisors feel uncomfortable when asked about said fees and give discounts
- Clients game the system by moving money out on June 29 and back in on July 1
Each one of these things cost you your most precious resource… time. Time to address the concerns, make cashflow adjustments, discount fees here and there.
Time leads to complexity and complexity is risk. How easy would it be to say- yes, we bill you at the start of the quarter, and we reconcile that fee across the market at the end of the quarter.
Forget about all the cashflow calculations, worrying about the market movement and increase your revenues.
How Smart Recon Works
Introducing our Smart Recon feature which allows you to collect in advance but take advantage of average daily balance calculations.
At the beginning of each quarter, Smart Kx calculates the advisory fee in advance, using the portfolio value as of the last day of the previous quarter. RIA collects the revenue from the client.
At the end of the quarter, Smart Kx performs a second calculation based on the average daily balance of the account over the full quarter. This ensures the fee reflects the actual fluctuations in the portfolio throughout the billing period.
If the average daily balance fee results in a fee that differs from what was initially collected, the system will automatically apply a credit or additional charge to the next quarter’s invoice.
For every $1B under management, Smart Recon increases your revenue by $103,000 annually.
Benefits of Smart Recon
- You make more money
- Reduces the impact of four market days per year
- More transparent for client and advisor
eliminates questions about fee billing - Allows you to keep billing in advance
makes moving assets between accounts or bringing in new accounts easier to calculate clients spending – makes it more fair - Clients aren’t gaming system
advisors’ payouts are more fair - Truly aligns you with your clients interest DAILY, not just 4 days per year
See Smart Recon in Action
If you’d like to see how this works in more detail, grab a 15-minute slot >
Experience the Simplicity of Automated Fee Billing
Discover how Smart Kx can transform your client billing process, accelerating revenue and enhancing client satisfaction.
