The PriceMetrix ValueOne Program delivers a unique brand of business intelligence to help financial advisors improve the value of services they provide to their retail investor clients. 

While working as strategic advisors to the executives of financial services companies, the three founders of PriceMetrix discovered a profound challenge facing full service investment broker/dealers.  A significant drop had occurred in the rate of commissions being charged to retail investors for buying and selling securities.  At some firms, the price level had dropped to half of where it was in the early 1980s.  Advisors were charging less for the same (and in many respects, more) service.  As a consequence, many investors were being under serviced, at the expense of those being over serviced. Balancing service and price would benefit both investors and advisors.

Several things led to this decline, most notably the introduction of discount brokerage as an alternative to full service advice.  Many advisors found themselves competing on price with discount firms (like Schwab and Fidelity) rather than differentiating their service on the basis of the value of advice that they provided. Often they decreased price and maintained service, necessitating the addition of more clients, which led to an overall dilution of service for investors.

Most advisors didnt know what they should charge.  Few used the recommended list price provided by their firm (most commission schedules were outdated).  Nobody understood how their pricing compared to other advisors providing similar services.  Advisors had little information about what constituted a reasonable price and many initiated new client relationships by providing deep discounts  without even discussing price with clients.  In an industry that normally suffers from too much information, there was far too little information when it came to pricing.

The aggregate level of discounting, however, did not tell the whole story.  Further analysis revealed incredible disparities in the price levels charged by different advisors.  While many had lost confidence in their value proposition, in some cases charging less than discount brokerage alternatives, some advisors were, in fact, charging full price for full service.  If some could do it, why couldnt others?   

The core problem we perceived was that investors were disadvantaged because most advisors attempted to offset their losses from excessive discounting by adding more client relationships.  Their professional advice and stewardship (as measured by time) was a fixed resource, leaving less service for the average investor.  Without reliable data, advisors were unable to properly allocate time across their growing business and investors were receiving diluted service.  Investors willing to pay often received proportionately less service; clients who demanded large discounts got more than their fair share.   The entire value of the relationship between investors and advisors was out of alignment and in decline.

We found through research that discounts on commissions was not leading to higher levels of satisfaction for clients. For instance, clients who received discounts fired their advisors just as often as those who paid premium prices. More often, when advisors lacked confidence in their own value proposition, their clients lacked confidence in them.

Through additional research, we found that pricing information was not the only business intelligence the industry lacked.  Categorically, retail advisors did not have the basic information required to help them make informed, confident business decisions. Investors were suffering because of it.

We felt that access to better, more relevant information could improve the alignment of investor and advisor expectations around value.  This alignment would be the basis for a healthier ongoing relationship and could serve as part of a new foundation required to increase the perceived value of full service investment advice and increase investor satisfaction.

Advisors needed a specialized business intelligence tool to help them determine which clients to service, which products to sell, and how much to charge for products.  We set out to build this tool.  Advisors also desired to learn how others were managing their businesses for greater growth and success.  We set out to build a system that would identify opportunities encouraging advisors to improve business productivity and client satisfaction by getting more output from the same input.  

Broker/Dealers are large producers of data.  Their back offices capture and store information about trades, commissions, positions, investors and advisors.  The real question for us was: how do we use technology to turn this data into intelligence, and then turn the intelligence into action?  

There are several Business Intelligence (BI) tools that companies can install. Such off-the-shelf tools can give a window into data, and even help users mine some intelligence; however, conventional BI tools do not have a track record of motivating behavioral change.

The questions we wanted advisors to ask themselves, and ultimately answer, included:
1)	Are there opportunities to do better within the clients I already have?  
2)	How much could my business be producing? 
3)	How do other advisors with similar businesses perform compared to me?
4)	Am I delivering the value to my clients that they deserve and pay for?

Previously, the only way advisors could have answered these questions was to talk to their peers in the local branch (usually 5 to 15 other individuals), and perhaps tap into the experience of their branch manager.  Our technology greatly extends this reach, allowing users to tap into the experience of all the advisors and their end clients  currently 15,000 and 5 million respectively  benefiting from the PriceMetrix ValueOne Program. 

The ValueOne project uses technology to aggregate, cleanse, and normalize batch transactions, positions, and investor data.  We use the resulting data warehouse to:
	-proactively mine the details behind the behavior of all participating advisors and clients,
	-identify leading performers and their practices,
	-identify where opportunities reside in each individual advisors business,
	-quantify the value of that opportunity.

The resulting business intelligence is delivered to users in a one-click fashion pioneered by Amazon.com. Our research found that despite using technology to satisfy their clients needs, time-constrained advisors were reluctant to become expert users of BI tools.  Investments in making ValueOne user-friendly, fast, and accurate were critical to gaining adoption.

"PriceMetrix has made the data easy to use, especially for those who arent that tech savvy."
- Michael Ball, Senior Managing Director, Scott & Stringfellow

We chose to offer the ValueOne solution on a hosted basis to keep the technology effort and investment low for our clients, and to facilitate the calculation of aggregated statistics.  

Before establishing PriceMetrix, we were in the business of helping CEOs make better business decisions about which markets to serve and how to win in those markets.  Now through technology, we are able to mass produce similar caliber advice and distribute it to the thousands of advisors and managers who have to make these business decisions every day  benefiting 5 million retail investors.

Yes

Yes

ValueOne performs an analysis that quantifies revenue opportunities at the user level, and then publishes individual opportunity reports for all users.  These reports are supplemented with online Practice Management tools  pricing calculators, target lists, practical tips, and practice development planning  that enable advisors to target opportunities and take action.  ValueOne users are aided in their interpretation and usage of the business intelligence reports by subject matter experts who deliver on demand support, guidance, and training.

Advisors are empowered, along with management, to set market-based plausible goals and the manager/coach is better able to determine what skills, training, and resources would best support these growth objectives and client needs.  ValueOne reinforces engagement by allowing users to measure themselves against those goals, and to draw upon best practices derived from a universe many times the size of their local environment. Better trained investment advisors, properly allocating their time and service across a wide range of clients, lead to an improved and more valuable business relationship with clients.

Investors benefit because advisors have a better handle on the value of their own time and advice.  They are better able to focus their efforts on the right clients, providing their investors with improved value.  Finally, advisors get a more comprehensive view of the entire client relationship, often identifying products or services that are a better fit for specific client situations.  

Scott & Stringfellow, Inc., a full-service regional brokerage and investment banking firm with 60 offices and 300 Advisors, began working with PriceMetrix in 2004.  At first, they were looking to give their advisors a tool to help with consistency in valuing and pricing their individual books of business. The firm wanted its advisors to understand their value and be aware of how they were pricing this value.  

"What we received was a lot more than just the reports and tools," says Michael Ball, Senior Managing Director at Scott & Stringfellow. "The results have been impressive not only in terms of value based pricing, but also for improvements to the business overall."

"PriceMetrix brought an awareness of alternatives to traditional business and I dont think we would have experienced the growth numbers in other areas if it hadnt been for the PriceMetrix ValueOne Program." The industry is changing and more and more attention is being paid to opportunities for internal growth.  "PriceMetrix highlights these internal opportunities, and helps us take action to leverage them," says Ball.  "The ValueOne Productivity Report makes it easy. You can say to an advisor, Look at what you are doing and point out the dollar impact."

Financial advisors at Scott & Stringfellow have used the ValueOne Program to ensure they are offering a high level of service to their core households  those that generate the majority of their revenues. The reports make identifying these key relationships easy. This focus on creating wealth for their clients has been mutually rewarding; the percentage of total client households with over $100,000 in assets at the firm has increased by 32% over the past 3 years.

Since deploying ValueOne, Scott & Stringfellow has experienced tremendous growth.  Ball believes a large part is due to making opportunities real and making the process for developing them easy for financial advisors. 

When J.J.B. Hilliard, W.L. Lyons Inc., a regional broker/dealer with 70 branch offices and 400 advisors, partnered with PriceMetrix in late 2005, they werent looking for just another management tool. They wanted to provide their financial advisors with the capability to analyze and improve their practices using a tool that advisors would embrace because it clearly delivered results. By identifying areas of opportunity in a financial advisors book of business  and how to take action  it was evident the PriceMetrix ValueOne Program would have a positive impact on business. In the first year, the focus was on using PriceMetrix to identify pricing improvements; a 30% improvement in the Trades below Discount measure generated significant revenue growth for both producers and Hilliard Lyons.  Now, the focus has turned to using PriceMetrix to improve cross-sell opportunities, re-energize forgotten households, and uncover additional assets from high-value clients.

"We defined our own thresholds for high value client relationships and include those, plus revenue and asset goals, on the reports. The reports focus our financial advisors on the same priorities as the head office."
- Darryl Metzger, Executive Vice President, Hilliard Lyons

The PriceMetrix ValueOne Program features reports that are designed for financial advisors, and sets specific goals for growth with clearly defined steps the advisors can take to achieve those goals.  The reports so clearly display areas of opportunity and weakness that branch managers find it easier to coach their financial advisors.

"PriceMetrix is the single best tool the firm has brought to the table to help Advisors improve their business."
- Branch Manager, Hilliard Lyons

Most advisors have access to slick tools (like CRM software) to help them manage clients.   Similarly, there are dozens of software applications available to help advisors manage client portfolios and trading activities.  Prior to PriceMetrix, no effective tools existed to help advisors manage their business and business opportunities to improve the relationship with and value to their clients.

PriceMetrix pioneered the application of advanced business intelligence to assist broker/dealers in the management of employees for greater productivity and client satisfaction.  What we encountered when we started this project was an industry, and clients, that had lost confidence.  We are using technology to help rebuild that confidence.  

For example, with pricing we were able to build confidence and improve efficiency by giving advisors access to information that showed them how other advisors best service their clients and what they charge.  In addition, ValueOne gives people context for the decisions they make.  We do this by creating a series of links to:  
	- what others are doing
	- what you have done in the past
	- what clients like yours do
	- what your manager and firm want you to do
	- what you aspire to do.  

Through these links ValueOne drives behavior, setting it apart from most reporting or generic BI tools.  

Books of business do not look alike, and there are many different ways to be successful in the retail brokerage business.  Some advisors specialize in specific products, such as equities or fixed income instruments.  Some focus on specific client segments.  We built ValueOne to be configurable for all these different styles of business.  When users interact with PriceMetrix materials, it feels as though the reports and intelligence were custom created for their specific businesses.   We also allow users to select goals and targets that are important to them, while balancing them with the goals and targets that are important to their organization.  

"We wanted to let our Advisors maintain their autonomy, but also encourage them to run better businesses. PriceMetrix helps us achieve that objective."
- Debra Hewson, President and CEO Odlum Brown

To gain credibility with advisors, we rely extensively on a concept called like-to-like.  Simply put, we compare advisors with similar business styles, tenure, and clients.  Our transaction benchmarking tools use nearest neighbor analysis to find and benchmark similar trades.  These like-to-like concepts form the basis of several patents filed and granted in the United States and Australia.  

ValueOne was built with one industry and one business issue in mind.  It was built by people who understand brokerage and who have an intimate understanding of the behaviors, wants, and needs of our users.  PriceMetrix software and services are uniquely tailored to respond to these needs.  This focus has allowed us to achieve significant adoption and results.  Advisors do not need to use our service; they use it because it is easy to use and built specifically to address the challenges they face. Our tools are making advisors more confident about the value of the services they provide and increasing the satisfaction of their clients.  

In addition, we are contributing to the differentiation between full service investment advice and call centre discount brokerage order execution as we deliver business intelligence and other facts to advisors. We are showing advisors how to improve their business and service levels, and they are responding.  We are helping investors by raising overall levels of service and better aligning value delivered with price paid.

We are, in a small way, helping to steer this entire industry in a more positive direction.

To make ValueOne function effectively, we rely on data from back office systems.  Every month we import, store, process and analyze tens of millions of data records (accounts, transactions, positions).  We perform these tasks in a timely, reliable fashion to get high quality analytics in the hands of our users as soon as possible.  Additionally, our technical platform accepts and processes data from a variety of back office systems, often requiring different procedures to fully normalize the data. We had to convince our clients to allow us to normalize the data on our platform, as the challenge to cause competing firms to adopt a single reporting standard voluntarily was too great. (In our data warehouse, all data must look the same to be comparable for accurate benchmarks across firms.)  Getting new broker/dealers set up on our platform can be an involved process, particularly if the structure of their information is unique. (Some firms organize their data in a consistent fashion, particularly those that share the same clearing firm or back office administration system  but most do not.)

We also found that advisors were most concerned about having a complete view of their individual customer relationships when providing investment advice and were reluctant to act on information that was not presented in this fashion. Most brokerage firms present their information to their advisors at the account level, causing advisors to rely on hunches about the full breadth of the customer relationship. We needed a means of aggregating the accounts held by households into one measurable unit  a process often referred to as householding. We found that existing applications used by other financial services firms generated too many errors  false positives  to be considered reliable by advisors. Consequently, we were forced to design a proprietary householding method that met advisor appetite for accuracy, and then embed it into our platform. Accurate householding across millions of records is a time consuming iterative process that required very efficient software code. The result is that investors can be confident that their advisor is providing advice based on the full breadth of their familys holdings.

In addition to ensuring speed, reliability, and accuracy, we have invested heavily in the security of our Program. The clients we deal with are blue chip and apply stringent security and information privacy due diligence of their vendors.  Our proven security layer model ensures all data is protected, in all its forms, from any unauthorized access or use.

Finally, we had to overcome Broker/Dealer concerns about the aggregation of data across many competing firms, and ensure that we designed our approach in adherence with all anti-competition laws. Anti-competition law requires us to present a minimum of three firms aggregated data in an anonymized manner, so we had to first get three firms to agree to be on the platform, and then design a means of anonymizing the data while preserving its value to the user. Our users testify that we have overcome these obstacles.

In order to effect change in the industry, we first had to convince broker/dealer executives that the current state of their business was not providing the maximum benefit for their shareholders, their employees, and their clients.  Often, we did that by working with their real data to illustrate the opportunity within their actual firms.  Once they were convinced we could help, and implemented the ValueOne program, we then needed to convince each of their advisors that they had opportunities and that we had a solution for tapping into those opportunities.  

We have had to build credibility and trust with our users from the ground up.  Particularly in the early days, we had to convince advisors that our analysis was robust and that our recommendations were sound.  That meant getting to know them through extensive work in the field.  It also meant incorporating feedback quickly into our program.  The configurability for different business types, householding algorithms, and different peering methodologies were all products of early user feedback.   

We had to build on our early foundation of results by quickly spreading success stories through the sharing of results, best practices, and case studies.  We treated branch managers as allies in our mission.  Most were quick to accept our help, because our program made their role as coach a whole lot easier by supplying them with individualized game plans for each of their advisors.  

There were (as there always is, when introducing change) holdouts.  It took longer to penetrate the already successful, large producing advisors.  Some didnt like the transparency that our application delivered.  We won over these groups with persistence, patience, and demonstrated results.  It becomes increasingly difficult to ignore our program while watching others become more productive and more successful.

Exceeded

At PriceMetrix, we believe that we have, and will continue to have, a profound impact on the performance of the Retail Securities Industry.   The success of our project requires technology, and time.  We have to continue to work dealer by dealer, advisor by advisor to deploy ValueOne. In effect, we are constructing an industry exchange of best practices which gets better with every client that we add. Our unique approach to business intelligence has helped advisors make smarter decisions about which clients to service, what products to sell and what to charge for those products. This has resulted in improved relationships and increased satisfaction across the 5 million investors that currently benefit from ValueOne.

Our discussions with individual investors showed that they place a great deal of trust in their investment advisors, and their satisfaction level goes up when their advisors have a solid grasp of their business model and value proposition.  In the end, PriceMetrix will help more investors to have more confidence in their advisors, because more advisors will have more confidence in themselves.  

"Clients are educated with the philosophy that quality comes with reasonable costs and to be wary of discounts and bargains in investments and laser eye surgery.  Value is not always the good investments you make but equally the bad investments you avoid. Clients can and will pay reasonable fees to those they trust implicitly, who keep their interests first, and are committed to a long term relationship."
- Advisor and ValueOne User

Today, the PriceMetrix ValueOne Program has the advantage of over eight years of adoption and use by thousands of advisors, managers, and sales assistants.  The program has been purchased by seventeen investments firms across North America, representing all major market segments  regional dealers, bank dealers, independent dealers and correspondent dealers.  The 2008 commitment by a national wire house firm (>2,500 advisors) to deploy ValueOne was a major validation of the solution for the wire house segment.  Currently almost half the Canadian market takes advantage of the ValueOne program, and awareness of the success in the US market is building. 

We have achieved a 100% referenceable client base.  Every single client firm that we have worked with is willing to provide testimonials to prospective buyers.  In addition, 86% of individual PriceMetrix ValueOne users tell us that they would recommend PriceMetrix to a colleague. 

For Hilliard Lyons, increased productivity alone has meant an average annual increase in production per advisor of $35,000, and for Scott & Stringfellow that number is $47,000.  Advisor retention rates at firms with PriceMetrix are higher, and often advisors who switch employers will seek out firms with PriceMetrix or request that their new firm adopt the Program.

In conclusion, the PriceMetrix ValueOne Program delivers business intelligence that helps financial advisors improve the quality of their business relationships with clients while increasing the value of their business. Thats good news for investors, advisors and the industry.