Cost efficiency of the Access compensation structure
Economics: Build vs. Partner
| |
2010 |
2011 |
2012 |
| Assets Flows |
|
|
|
| Beginning AUM |
$0 |
$51,500,000 |
$157,590,000 |
| New Flows |
50,000,000 |
100,000,000 |
150,000,000 |
| Annual Returns |
6% |
6% |
6% |
| End of Year AUM |
$51,500,000 |
$157,590,000 |
$321,545,400 |
| |
|
|
|
| Revenues from New AUM |
$100,000 |
$303,000 |
$615,180 |
| |
|
|
|
| Expenses for New Assets Raised |
|
|
|
| Salary - 1 Institutional Sales |
$150,000 |
$150,000 |
$150,000 |
| Salary - Internal Sales Support |
75,000 |
75,000 |
75,000 |
| Benefits - 2 Employees |
33,750 |
33,750 |
33,750 |
| Travel & Entertainment Expenses |
65,000 |
65,000 |
65,000 |
| Commission to Sales Team |
20,000 |
45,450 |
61,518 |
| Total Expenses |
$343,750 |
$369,200 |
$385,268 |
| |
|
|
|
| ROI |
|
|
-7% |
| |
2010 |
2011 |
2012 |
| Assets Flows |
|
|
|
| Beginning AUM |
$0 |
$51,500,000 |
$157,590,000 |
| New Flows |
50,000,000 |
100,000,000 |
150,000,000 |
| Annual Returns |
6% |
6% |
6% |
| End of Year AUM |
$51,500,000 |
$157,590,000 |
$321,545,400 |
| |
|
|
|
| Revenues from New AUM |
$100,000 |
$303,000 |
$615,180 |
| |
|
|
|
| Expenses for New Assets Raised |
|
|
|
| Annual Retainer Fee to Access |
$120,000 |
$120,000 |
$120,000 |
| Success Fees on Assets Raised |
20,000 |
45,450 |
61,518 |
| Total Expenses |
140,000 |
165,450 |
181,518 |
| |
|
|
|
| ROI |
|
|
109% |
Even assuming a low level of new assets raised by Access Distribution Partners, the return on investment for utilizing our services is high
Compared with the cost and effort involved with building an in-house sales team, Access Distribution Partners offers a partnership with an established team with deep relationships at a fraction of the cost
Note: Assumes a 40bps charge on returns on assets. Annual returns are based on the average AUM for the year.