Using Benchmarks to Optimize your Retail Investment Services Program

When measuring your investment services program’s performance, it is critical to understand how individual benchmarks represent a piece of the puzzle. If considered separately, the individual metrics do not tell the whole story as to how the program’s management team should improve the program’s overall productivity.


The 2009 Retail Investment Services Study surveys credit unions and broker-dealers to determine the state of industry investment services programs. The Study uses ten key benchmarks to evaluate program and industry performance including:

  • Program Gross Dealer Concession (GDC) per Million ($) of Credit Union Shares
  • Branches/Members/Shares per Financial Consultant
  • Referral Activity
  • Assets under Management
  • Wallet Share Ratio (Uninsured Assets Under Management/(Uninsured Assets Under Management + Total Credit Union Shares))

Each of the ten benchmarks represents a piece of the puzzle of the program's overall productivity and performance. If considered separately, the individual benchmarks/metrics do not tell the whole story as to how the program's management team should improve the program’s overall performance. There are multiple examples of how management can utilize the combination of multiple benchmarks/metrics to identify the opportunities for enhancing the program's productivity and performance.

GDC per Million of Shares, GDC per FC and Branches per FC are three related benchmarks and can be effectively used together to enhance your program's productivity. Take one credit union example. This credit union has $500M in shares with seven branches and one FC. The program is structured as a Dual Employee program, in which representatives are employed by both the broker-dealer and the credit union. The FC generates $310,000 in revenue per year.

The FC is producing at slightly above average level of GDC, but the program's GDC per Million of Shares ($620) is half that of the dual employee program average ($1,269). Furthermore, the FC is trying to serve twice the number of branches (7) than his peer FCs at other programs (3.6).

The credit union's broker-dealer recognizes the FC as a good producer, but the credit union is not satisfied with the level of non-interest income generated through the program for the credit union. Prior to utilizing multiple benchmarks, the resolution would be to double the FC's GDC to generate additional non-interest income. This would have also maintained expenses by not adding any additional salaries.

Yet, the Callahan/SCS metrics demonstrate that the program is operating below its potential capacity. The high branch per FC ratio, on-par GDC generation, and below average GDC per Million of Shares indicates that the market is available without diluting the productivity of the FC.

The management team should look to recruit another FC or add an Associate FC. This will enable the staff to operate more efficiently as inter-branch travel would be significantly reduced. The staff would have the resources to increase overall awareness of the program with branch staff and members and deepen member penetration levels. With those steps, the total GDC produced will increase which will maintain the average GDC per FC ratio, and raise the non-interest income contributed back to the credit union. Finally the program’s GDC per Million of Shares Ratio will increase to peer levels as the program's staff of two will increase the assets under management more quickly than the credit union takes in deposits.

For more information on measuring the financial performance and productivity of your retail investment services program, pre-order the 2009 Retail Investment Services Study.