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Data & Benchmarking

Over 7,000 Independent Financial Advisory Firms in our Database and Counting

TRUELYTICS SCORE™ 

The Truelytics score is an easy to understand number on a scale of 1-4 incorporating your firm’s financial metrics, plus business, client and market stability ratings.

eVALUATION™ INDEX MODELS

The core component of Truelytics’ Advisor Transition Management Platform is our growing database of independent financial advisory firm books of business (i.e., details around the firm’s ownership, staff, clients, processes, revenue, and expenses.)

PRO-FORMA

The Truelytics Pro-Forma is  based on a firm's most recent year of financials. Revenue and expenses for the next 5 years are forecasted using the growth rate provided.

VALUATION MODELS

Truelytics presents multiple valuations under different scenarios. Our methodology of choice is the Discounted Cash Flow Model as this model best reflects future cash flow vs. past financial performance. We include alternative methodologies to reflect industry expectations.

BENCHMARKS

We have taken the massive amount of data we collect across all of our members and have produced some data science magic!

DYNAMIC PDF REPORTS

Firm's can instantly generate a PDF of their latest eValuation or Snapshot reports by selecting one of the two options in the top right navigation and following the prompts.

Truelytics Score™ 

The Truelytics score is an easy to understand number on a scale of 1-4 incorporating a firm’s financial metrics, plus business, client and market stability ratings. These ratings are broken out and graded A, B or C, and directly impact a firm's discount rate, which drives their valuation.  These scores and discount rate allow one too easily benchmark a firm against others in the industry and identify opportunities to grow.

Report - Summary Page-2

eValuation™ Index Models

Our Secret Sauce ...

Our suite of  eValuation™ Index Models was developed by prominent industry thought leaders in response to the significant challenges facing financial advisors and wealth managers who are trying to accurately measure their success, plan for succession, and improve their bottom line. The foundation of our technology is based on data gleaned from tens of thousands of actual (“blind”) advisor tax returns; state of the art Key Performance Indicators; and multiple Investment Banking formulas. The results: Data that Matters™, data you can trust.

Business Stability Scorecard

Report - Business Scorecard-4Our Business Stability scorecard reflects the structure and operations of a firm. A stable business is not likely to fall when faced with the loss of any one person, client, or business process. Although there are many factors to consider in this section, many of them are directly under a firm's control. 

 

Client Stability Scorecard

Report - Client Scorecard-1Our Client Stability scorecard reflects the demographics and turnover of a firm's client base. It is important to have a diversified client base, frequent interactions with clients, and to build relationships with the next generation of wealth.

 

Market Stability Scorecard

Report - Market Scorecard-2Our Market Stability scorecard reflects the amount of market risk inherent in a firm's revenue streams. Risk here is not necessarily a bad thing - exposure to the market can generate growth in good times. However, you should look to have diverse revenues that can be stable in hard times.

Pro-Forma

The Truelytics Pro-Forma is  based on a firm's most recent year of financials. Revenue and expenses for the next 5 years are forecasted using the growth rate provided.

The pro-forma is created as flat-line growth when in reality it will be fluctuating with market movements. While none of us have a crystal ball to predict the future,  this growth scenario is still a good indicator of trends in a generalized scenario.

Report - Pro-Forma

There is a safeguard in the Truelytics system to prevent a falsely inflated valuation. If an expected growth rate is significantly higher than the historical growth rate, the Pro-Forma growth is limited to 5% over a firm's historical growth rate.

Valuation Models

Truelytics presents multiple valuations under different scenarios. Our methodology of choice is the Discounted Cash Flow Model as this model best reflects future cash flow vs. past financial performance. We include alternative methodologies to reflect industry expectations.

Report - Valuation Models

Discounted Cash Flow Model

The discounted cash flow methodology is usually the most widely used and accepted valuation method. The DCF model projects future cash flow and discounts it back to present day value. There are opportunities to lower the discount rate and improve a firm's valuation, such as such as increasing cash flow or improving KPI scores.

Alternative Valuation Models

The Truelytics alternative valuations begin with rule-of-thumb multiples based on firm size.  We then adjust those multiples to reflect the firm’s business, client, and market stability scores. By way of example, a firm may start with a revenue multiple of 2.1x recurring revenue and 1x non-recurring revenue. The software next creates a blended rate based on the firm’s percentage of each category of revenue. The resulting blended multiple is then adjusted further based upon the firm’s individual scores and profile.  High scoring firms have their multiple increased, while low scoring firms have their multiple decreased. 

Benchmarks

Have you ever wondered how you stacked up against your peers? How about against the market at large? Maybe you are the competitive type, always looking for ways to be the best in the industry. Regardless of what drives you, you will be happy to know that Truelytics is now offering benchmarking.

We have taken the massive amount of data we collect across all of our members and have produced some data science magic! You can benchmark against your peers (those within +/- 25% of your AUM) and the market at large (our entire data set):

Firm-Level Benchmarks
Independent Financial Advisory Firms

Benchmarks - RevenueFilter against peers (those within +/- 25% of your AUM) and the market at large (our entire data set):

Truelytics Scores & Valuations
Business, Client, and Market Stability Scorecards
Expenses
Client Details
Revenue Details

 

 

Enterprise-Level Benchmarks
IBDs, Asset Managers, Custodians, OSJs, Large RIAs

Enterprise Benchmarks-1Truelytics Enterprise Benchmarks contain over 40 insightful dashboards that cover the following categories:

Firms
Clients
Process
Revenue
Expenses
Ratios
 
 
Each dashboard is geared to provide executives and practice management specialists in enterprises with insights into how the firms in the enterprise are performing overall and where the outlier firms exist in each report.  Learn More →

Dynamic PDF Reports

Firm's can instantly generate a PDF of their latest eValuation or Snapshot reports by selecting one of the two options in the top right navigation and following the prompts.

pdf-report-nav

eValuation™ Reports

Our eValuation report features 17 pages of key data and insights related to your latest Truelytics eValuation.  The report is broken up into 4 main sections. These include:

  • Report Summary 
  • Business, Market, Client Stability Scorecards
  • Pro-Forma
  • Valuation Models

Sample eValuation Report

Snapshot Reports

A Snapshot allows firm to "take a picture" of the specifics of their Annual Report at any point. This allows a Firm User to compare key performance indicators over time, including your Truelytics Scores, Grades, Firm Value, and Potential Upside. You will also be provided with a detailed report that includes all your inputs and report outputs so you can take a look back and see how your firm has evolved. 

Sample Snapshot Report

TrueInsights 2020 Benchmark App

Truelytics is introducing its inagural benchmark study in 2020 and we are looking to change the way its done forever in the wealth management space. Imagine a sample size of 7,000+ firms vs. 700. Imagine data that updates real-time vs. once a year. Imagine an app vs. a print report. We are currently looking for a strategic sponsor(s) to assist with underwriting and distribution of this ground breaking approach.

Learn More
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