Panoramix Releases New Industry Research on RIA Billing Practices During Pandemic

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Average billing methodologies smooth out wild revenue swings due to market volatility as RIA revenues were down 10.5% in Q1 2020, but up 13.2% in Q2 2020

There is a strong case to be made for billing on an average balance basis so that RIA revenues remain steady in volatilve markets.

Panoramix, an innovative advisor technology platform, announced today the results of a recent industry research study on billing practices of independent Registered Investment Advisors (RIAs) during the Covid-19 Pandemic. This seminal research showed that RIAs using average billing methodologies billed more during the market break, but less in the subsequent recovery, smoothing out revenue swings due to market volatility.

The report, “The Case for Average Billing: Smoothing Out Market Fluctuations,” was based on thousands of data points in the Panoramix billing system and showed that in the first quarter of 2020, AUM for RIAs was down 11.4%, resulting in a net revenue billing decline of 10.5% based on the violent negative market swings caused by the onslaught of the Corona Virus pandemic. However, those AUM and billing levels rebounded strongly in the second quarter of 2020 due to the powerful market recovery resulting in an AUM bounce back of 14.4%, and a corresponding increase in net billing revenues of 13.2%.

A key takeaway from this study is that advisors using an average billing methodology instead of a quarter-end approach realized only a 6% decrease in revenues in the first quarter of 2020 and a 5% bounce back in the second quarter. This revenue smoothing approach was critical for many firms to stay solvent and fully operational during highly disruptive times.

“There is a strong case to be made for billing on an average balance basis so that RIA revenues remain steady in volatilve markets,” said Chris Hasting, CEO of Panoramix and author of the study. “With 2,000 advisory firms taking out a lifeline via a Payroll Protection Program (PPP) forgivable government loan as evidence, it is clear that volatile markets create substantial cash flow disruptions for RIAs. As a result, we recommend that firms re-examine their billing methodologies to be prepared for the next dose of volatility, sure to come.”

According to the report, there are several ways RIAs typically bill clients, however the results can vary dramatically, particularly during periods of market volatility. For those advisors billing in arrears, using an average balance over the quarter takes into consideration flows into and out of the accounts and weights them appropriately. Those RIAs using just the value of the account at the end of the quarter potentially may be over or under-billing clients as well as creating havoc with their own cash flows.

“Now more than ever, with regulators bringing added focus to RIA billing methodologies and how they calculate them, advisors need to document their approaches and back it up with their technology,” said Hastings. “The good news is that with technology and reporting enhancements, advisors have access to more powerful and flexible billing automation systems than ever before and can much more easily smooth out their revenues and insulate their finances for better planning, budgeting and strategic purposes.”

To download the report, “The Case for Average Billing: Smoothing Out Market Fluctuations, log on to:

About Panoramix

Panoramix was developed by Sapphire Software Services, a custom software and business-to-business automation company founded in 2003. Sapphire brings business application to the web, provides consulting services with the best vendors and partnerships, and offers professional development capabilities to automate business processes. Sapphire specializes in business application software development for companies in the financial services sector. For more information on Panoramix, log onto

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