• Don Moore

    I continue to be amazed by those organizations that do not fully understand their pricing scenarios or by those institutions that do not have a disciplined approach to pricing. For many they continue to rely on the dated AUM metric, where the belief is that bringing in assets will generate profitable business. This no longer is the case, organizations need to begin to focus on ROFA (Return on Fiduciary Assets) as the new metric and establish goals and objectives around the ROFA for each type of account and the overall portfolio. Failure to do so will create inconsistent pricing situations and increased risks.

    The goal should be to optimize risk-adjusted revenue while at the same time providing quality and reliable service to the client.

    The process we have implemented produces annual revenue lifts in the 12% – 25% range (excluding market value appreciation). Perhaps it is worth a look.