Rethinking AUM: A Better Way for RIAs to Measure Success with Lacey Shrum

Episode 106: Lacey Shrum, Founder of Smart Kx, is an accomplished professional with a diverse background in law, compliance, and entrepreneurship. At Smart Kx, Lacey applies her extensive experience to drive strategic initiatives and deliver innovative solutions within the legal and technology sectors.

This week, Kyle and Lacey do a deep dive into the metric that truly matters for advisory firms—revenue. Lacey shares why AUM can be a vanity metric, how to calculate and use blended rates, and ways to streamline billing for greater efficiency and profitability. They discuss common challenges during firm growth and acquisitions, how average daily balance reconciliation can smooth out revenue volatility, and why automation reduces friction in advisor operations.

In this episode:

(00:00) - Intro

(04:32) - Why protecting revenue matters more than chasing AUM

(08:26) - How Smart Kx gathers the data to power its calculations

(09:55) - The risks of relying on spreadsheets for billing

(14:17) - Why due diligence on revenue metrics is critical in acquisitions

(17:22) - Using Average Daily Balance (ADB) reconciliation for fairer, more transparent billing

(22:13)