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Envestnet, Dynasty Collaboration Produces Outsourced CFO Dashboard

Advisor Services Exchange, the enterprise-level collaboration between Envestnet and Dynasty Financial Partners, is introducing an outsourced CFO capability for all advisors.

Advisor Services Exchange (ASx), the enterprise-focused collaboration between Dynasty Financial Partners and Envestnet, is adding a new dashboard that integrates directly with QuickBooks Pro. The new interface, called the Essential CFO Dashboard, is part of its outsourced chief financial officer (CFO) feature, and provides advisors with a quick, but in-depth look at a firm’s earnings and profitability. Additionally, participating advisors can gauge their firm’s performance against benchmarking data provided by the Dynasty-Envestnet partnership.

The tool tracks earnings before owner’s compensation, an important metric for standardizing RIA profitability, according to the announcement reviewed by The dashboard also provides profitability target tracking, profitability per individual advisor, and more transparency into operating costs and expenses. Dashboard operators can set up alerts for spending spikes.

With the backing of Dynasty and Envestnet, the tool also provides enterprise valuation estimates, based on a proprietary set of calculations, alongside metrics indicating the RIA’s potential borrowing power.

Importantly, potential ASx clients do not need to be associated with Envestnet or Dynasty, said Ed Swenson, president of ASx. As of Thursday, the tool is available to the general marketplace, regardless of whether they use either Envestnet’s or Dynasty’s products or services.

To function properly, advisors need to use QuickBooks, which shouldn’t be a problem for the “vast majority of RIAs,” said Swenson. Between 70% and 80% of RIAs with less than $750 million in AUM use QuickBooks, he said. Many of those same RIAs are doing their own books and records in-house, he added.

Essential CFO Dashboard integrates with both the desktop and cloud versions of QuickBooks and is already in use by two dozen clients, according to ASx executives.

The tool takes “as much data as the RIA will allow us to,” ingesting up to five years’ worth of available information, said Tim Reinhart, VP of product management at ASx. He gave a demonstration to, highlighting business profitability metrics and expense allocations, among other features. Metrics are displayed graphically and in tables, and the feature includes options for exporting to Excel.

A look at the Business Profitability tab of the Essential CFO Dashboard

A look at the Business Profitability tab of the Essential CFO Dashboard.

One of the biggest challenges in developing the software was normalization, said Reinhart. With each firm managing its own expenses and the categorization of those metrics, for example, creating a benchmark becomes all the more difficult. ASx solves that by mapping the RIAs’ data to ASx’s own data fields, converting that information into standardized data and outputting it back to users, like trends and profitability.

By pulling data from the firm, instead of relying on self-reported data, which is where many benchmarkers get their baselines, CFO Dashboard operators are getting “a pure representation of costs,” said Swenson.

“All benchmarks in the past, around costs, have really been self-reported,” he said. “This is pulling data. So it's a very true indicator, kind of a pure representation, of costs inside the firm.” That data makes its way into the benchmark, minimizing the biases that self-reported data may have pulled in.

For now, firms using the Essential CFO Dashboard will gain greater transparency into the financial health of their own business. Owners and principals who don’t necessarily work in accounting or with QuickBooks on a daily basis will have a more accessible method of accessing a firm’s financials and implementing changes for better business efficiency, said Reinhart.

Ultimately, however, ASx wants to provide a sort of RIA-level enterprise-focused “next best action” experience for its customers.

“As we compile more and more data and the benchmarks get better and better, because we're building upon the amount of data that's in the benchmarks, we can start segmenting firms out based off their size and really get down to some good,” said Reinhart. “I don't want to call them recommendations, but suggestions on how [customers] can improve their profitability.”

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