ROI Calculator

Use the ROI Calculator to see how your SmartAsset subscription can turn into clients, assets under management (AUM) and revenue over time. Enter your subscription and business details, then move the slider to model how many clients you convert each year.

Use it to answer questions such as:

• If I convert 3 clients, does this pay for itself?
• How long until I break even?
• What happens if my conversion rate changes?
• Which subscription option looks better for my firm?

Results are estimates

The figures are for illustration only and don’t guarantee results. They assume a percentage fee on AUM and don’t include taxes or other business expenses. If you charge flat fees or use another model, approximate your inputs.

Open the ROI Calculator

• Go to Report > ROI Calculator. The ROI Calculator page opens.

Enter your inputs

The calculator fills in starting values for you. Change any of them to match your practice. The results update as you type.

AMP subscription

1. In the Advisor Calculator panel, click the AMP tab.

   

2. Choose a Contract Term.

3. Choose a Subscription.

4. Choose a Tier. The results update for that subscription.

CPL (cost per lead)

1. In the Advisor Calculator panel, click the CPL tab.
2. Click the Tier list. The list of lead tiers opens.
3. For each tier, enter the number of leads you get per month under # Leads.
4. For each tier, enter your cost per lead under $/Lead. The results update for those leads.

Business metrics

These fields, below the tabs, drive the revenue side of the estimate:

Field	What it does
Average Assets	Average assets per client. Filled in from the tiers you choose; change it to match your clients.
Client Lifetime	How many years the average client stays with you. Default is 10 years.
Referral %	The percentage of your total clients you expect to gain as new referrals each year. Default is 0%.
Annual Client Asset Growth	How much client assets grow each year. Default is 4%.
Fee %	The annual fee you charge on assets. Default is 1.1%.

Tip

If you’re unsure where to start, use the starting values and adjust them as you learn from your results.

Adjust Clients Converted Per Year

• In the ROI Simulator section, drag the Number of Estimated Clients Converted Per Year slider. The results update when you release it.

Understand the results

ROI Simulator

The ROI Simulator shows your conversion rate, first-year AUM growth and five-year return on investment for the number of clients you convert.

Conversion Rate

The percentage of your leads that become clients in this scenario. Leads per year come from your AMP tier, or from the # Leads you entered for CPL. If the rate doesn’t match your actual results, move the slider until it does.

Formula: Clients Converted Per Year ÷ Leads Received in 12 Months × 100%

1st-Year AUM Growth

The projected increase in AUM from the clients you convert during a 12-month subscription. Use it to compare scenarios when you care most about near-term growth.

Formula: Average Assets × Clients Converted Per Year

5-Year ROI

Your net return over 5 years on a 1-year subscription: the fees your converted clients pay over 5 years, minus 12 months of subscription cost, divided by that cost.

• 100% means you earn about $2 in fees for every $1 you spend on your subscription.
• 400% means you earn about $5 in fees for every $1 you spend.

For example, on a $12,000 subscription:

• 400% ROI: $12,000 × 5 = $60,000 in fees over 5 years
• 250% ROI: $12,000 × 3.5 = $42,000
• 100% ROI: $12,000 × 2 = $24,000

Acquisition Metrics

Acquisition Metrics shows what it costs to get a client and what a client is worth over time.

Client Acquisition Cost

The average cost to get one client through SmartAsset. For example, spending $12,000 a year and converting 3 clients gives an acquisition cost of $4,000 per client.

Formula: Annual subscription cost ÷ Clients Converted Per Year

Client Lifetime Value

The total fees a client pays over their whole relationship with your firm.

Formula: Average Assets × Fee % × Client Lifetime, with assets growing each year by the Annual Client Asset Growth

Research on client lifetime

Michael Kitces wrote about client lifetime value in “What (Traditional) Financial Advisors Can Learn From Venture Capitalists And Robo-Advisors About Lifetime Client Value” (2014). He notes that firms keeping 95% or more of their clients each year can see average client tenure approach 20 years. The calculator’s default client lifetime of 10 years is more conservative.

Efficiency Metrics

Two metrics help you judge a marketing investment.

Marketing Efficiency

How much you earn in fees each year for every $1 you spend on marketing. For example, a marketing efficiency of $1.50 means $20,000 spent on marketing brings in $30,000 in fees per year.

Formula: (Average Assets × Fee %) ÷ Client Acquisition Cost

Payback Period

How many months it takes a new client’s fees to cover what it cost to get that client.

Formula: Client Acquisition Cost ÷ (Average Assets × Fee % ÷ 12)

Cash Flow

The Cash Flow chart compares your monthly subscription cost (Expenses) with the monthly fees from your converted clients (Revenue) over a 5-year subscription. The Break Even line marks the first month when revenue covers the subscription cost. The summary under the chart gives the time to break even and your monthly revenue in year 5 as a multiple of your monthly cost.

Payback Period vs. Break-Even Point

These two metrics answer different questions: payback looks at one client, while break-even looks at your whole subscription.

Metric	What it measures
Payback Period	Client level. How many months it takes one new client’s fees to cover what it cost to get that client.
Break-Even Point	Subscription level. The first month when the monthly fees from all your converted clients cover the monthly subscription cost.

Related Guides

• Reporting Overview: the three reports and who can see them
• Pipeline Report: follow your SmartAsset leads from delivery to target conversion