The balanced scorecard has indeed become quite the popular managerial tool these days. What is even better about the balanced scorecard or the BSC is that it has gained strong ground in the industry of brokerage as well. If you operate a brokerage firm and you are out to develop your own balanced scorecard but you have no idea whatsever how to go about the development of your system of brokerage service measures, then fret not. There are numerous sources that you can find all over the internet and all sorts of reading materials bearing relevant information that would really help you develop the most appropriate system for your own firm. But before we go into the different measures that you can use, it is better to understand first just what exactly a brokerage firm is and how it operates in the corporate setting.
By definition, brokerage firms are intermediaries, middlemen, in laymen's terms. Brokerage firms carry out large numbers of transactions between buyers and sellers of securities, and this is done on a daily basis. Now, you may find this surprising but there is actually an increase when it comes to the client base of most brokerage firms today, in spite of the economic meltdown hitting the globe. And with the thousands upon thousands of transactions being deal with daily, it is no wonder brokerage service indicators and measures are required these days.
As mentioned above, there are several brokerage service indicators and measures that you can find just about anywhere. These come in the form of KPIs or key performance indicators. These are quantifiable measures that show you how the brokerage service firm measures in terms of performance. You can choose which KPIs to use and you can even customize these KPIs to fit the nature of your brokerage firm better. But just for the sake of guidance, the commonly used KPIs include commission earned per share, commission charged per transaction, as well as account maintenance charges per account on an annual basis. These are the KPIs that fall in the Financial Position bucket.
As for the Legal Compliance and Information Management bucket, you can choose from the following commonly used KPIs: lost message recovery time, the number of paid fines, the number of adopted security measures, and the SEC compliance index.
As for the Customer Relationship and Satisfaction bucket, KPIs here would include client satisfaction index, percentage increase in traded shares, percentage increase in client base, and accuracy level of investment advices.
As for the Internal Operations bin, this perspective exists to give a bird's eye view of the current operations of the brokerage firm itself. With that said, the KPIs that you can make use of would include price deterioration index, percentage improvement in the speed of order execution, the number of undertaken investment research projects, and order internalization extensive.
During the course of operations, it is important for brokerage firms to stick to all of the preset rules and regulations mandated by governing authorities. This is also another reason why it is a must to have brokerage service measures in place to ensure that the firm's operations stay on the right track.