Systems and method for determining the cost of a securities research department to service a client of the department

• US 7,734,517 B2
• Filed: 05/28/2004
• Issued: 06/08/2010
• Est. Priority Date: 05/28/2004
• Status: Active Grant

• Current Assignee: Morgan Stanley Services Group Inc. (Morgan Stanley)
• Original Assignee: Morgan Stanley
• Inventors: Hurewitz, Barry Scott
• Primary Examiner(s): CAMPEN, KELLY SCAGGS
• Application Number:
  US10/857,526
• Publication Number:
  US 20060041456A1
• Time in Patent Office: 2,202 Days
• Field of Search: 705/1, 705/5, 705/11, 705/7, 705/32, 705/26, 705/28, 705/35, 705/30, 705/10, 707/E17.01, 707/10
• US Class Current: 705/35
• CPC Class Codes: G06Q 10/06 Resources, workflows, human or project management; Enterprise or organisation planning; Enterprise or organisation modelling
• CPC Class Codes: G06Q 10/06398 Performance of employee with respect to a job function
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis
• CPC Class Codes: G06Q 40/12 Accounting

Abstract

In one technique, the time spent by each analyst of the department servicing the client over a specified period of time may be estimated. This value may then be adjusted based on the compensation of the analysis provider (or providers) servicing the client. Then, the compensation-weighted time of each analyst provider that serviced the client may be summed to thereby arrive at an estimate of the time and cost to service the client. In another technique, the standard cost per unit of different types of client touch that the equity research department produces is estimated. Then, the number and type of client touches a particular client receives over a given period of time (e.g., three months, one year, etc.) can be determined and multiplied by the standard cost per touch for the different touch types of to arrive at the total cost of servicing the client over the time period.

Claims

1. A computer-implemented method of computing the cost of a securities research department to service a plurality of clients of the department, comprising:

receiving by one or more computer devices, survey data of a plurality of analysts of the research department, wherein the survey data comprises;

(i) first data indicative of an analyst'"'"'s categorization of a plurality of clients listed in a survey into one of a plurality of pre-determined client use categories, wherein each client-use category reflects the client'"'"'s level of consumption of the analyst'"'"'s time over a time period;

(ii) second data indicative of the analyst'"'"'s estimation of how a percentage of the analyst'"'"'s time spent providing services to the clients was divided among each of the client-use categories over the time period;

(iii) third data indicative of the analyst'"'"'s estimation of a percentage of how the analyst'"'"'s time was spent with the clients listed in the survey versus non-listed clients over the time period;

calculating, by one or more of the computer devices, for each analyst and for each client-use category a first value indicating an estimated portion of the analyst'"'"'s time spent on clients in the client-use category, wherein the first value is calculated by allocating a total portion of the analyst'"'"'s time spent servicing clients in the client-use category pro rata over each client in the client-use category, and wherein calculating the first value comprises calculating the estimated portion based on the first data, second data and third data;

calculating, by one or more of the computer devices, for each analyst and for each client-use category, a second value indicating a compensation-weighted portion of the analyst'"'"'s time spent on clients in the client-use category, wherein calculating the second value comprises considering the first value and data indicative of the compensation of the analyst; and

calculating, by one or more of the computer devices, for each listed client, a compensation-weighted time spent by the analyst servicing each client over the time period, wherein calculating the compensation-weighted time comprises summing, for each client, the second values corresponding to each analyst that serviced the client over the time period, and wherein the one or more computer devices comprise a processor and an operatively associated electronic storage device.

2. The method of claim 1, wherein calculating a compensation-weighted time for each analyst includes:

calculating the data indicative of the compensation of the analyst considering a percentage of the total compensation pool that the analyst receives.

3. The method of claim 1, wherein the client-use categories include heavy users, medium users, light users and immaterial users.

4. The method of claim 1, further comprising the one or more computer devices electronically transmitting a survey to the plurality of analysts, wherein the survey lists the listed clients in alphabetical order.

5. The method of claim 4, wherein the survey is transmitted to the analysts on-line.

6. A method of computing the estimated cost per unit of client touches for a securities research department, the method comprising:

computing by a computerized client touch tracking system, a plurality of first values, where each first value is indicative of a number of units of one or a plurality of client touch types produced by analysis providers in the department over a period of time, wherein the computing comprises;

receiving, by the computerized client touch tracking system from an e-mail meter interfaced to an e-mail system of the securities research department data indicating analysis provider e-mails sent to clients;

receiving by the computerized client touch tracking system from a telephone tracking system, data indicating analysis provider telephone calls to clients;

receiving by the computerized client touch tracking system from an electronic mailing label system, data indicating electronic mail labels generated for analysis providers; and

computing, by the computerized client touch tracking system, the plurality of first values based at least in part on the data from the e-mail meter, the telephone tracking system and the electronic mailing label system;

computing, by one or more computer devices, a first allocation for each client touch type, wherein each first allocation is an allocation of support resource costs of the department over the period of time to the corresponding client touch types;

computing, by the one or more computer devices, a second allocation for each client touch type, wherein each second allocation is an allocation of analysis provider costs of the department over the period of time to the corresponding client touch types;

determining, by the one or more computer devices, for each of the plurality of client touch types, a cost of per unit of the client touch type, wherein determining each cost per unit is based on an aggregation of the first allocation and the second allocation for the corresponding client touch type divided by the first value for the corresponding client touch type, whereby the one or more computer devices generate a standard cost per unit for the plurality of client touch types; and

computing, by the one or more computer devices, for each of the plurality of clients, a cost of servicing the client over the time period based on the cost per unit for each client touch type associated with the client and the number of touches received over the time period by the client for each client touch type.

7. The method of claim 6, wherein the client touch types include at least one of:

a phone call with a client;

a one-to-one meeting with a client;

a small group meeting including a client;

a tailored email to a client;

a tailored voicemail sent a client;

a custom research project for the client;

a blast voicemail sent by a client;

a conference call attended by a client;

a conference attended by a client;

a seminar attended by a client;

a published document received by a client;

a blast email sent to a client; and

a web cast sent to a client.

8. The method of claim 6, wherein the analysis providers include at least one of analysts, research associates, strategists, economists and accountants.

9. The method of claim 6, wherein computing the second allocation comprises:

determining time spent by the analysis providers over the period of time performing various activities; and

allocating the cost of the time spent by the analysis providers over the period of time performing tasks related to particular client touch types to the particular client touch types.

10. The method of claim 9, wherein determining the time spent by the analysis providers includes surveying the analysis providers regarding the time spent performing the various activities over the time period.

11. The method of claim 10, wherein determining the time spent by the analysis providers includes tracking the time spent by the analysis providers performing the various activities.

12. The method of claim 6, wherein computing the second allocation comprises evenly allocating the cost of research time spent by the analysis providers over the period of time to the one or more client touch types.

13. The method of claim 6, wherein computing the second allocation comprises allocating the cost of research time spent by the analysis providers over the period of time to the one or more client touch types on a pro rata basis.

14. The method of claim 6, wherein computing the first allocation comprises evenly allocating costs of support resources of the department over the period of time to the client touch types.

15. The method of claim 6, wherein computing the first allocation comprises allocating costs of support resources of the department over the period of time to the client touch types on a pro rata basis.

16. The method of claim 6, wherein the cost of support resources includes management expenses over the period of time.

17. The method of claim 6, wherein the cost of support resources includes indirect costs incurred over the period of time.

18. A system for determining the cost of an equity research department to service a plurality of clients of the department, the system comprising:

a processor;

a network device coupled to the processor and adapted to communicate via a communications network;

a storage device in communication with the processor and storing instructions adapted to be executed by the processor to;

receive survey data of a plurality of analysts of the research department, wherein the survey data comprises;

(i) first data indicative of an analyst'"'"'s categorization of a plurality of clients listed in a survey into one of a plurality of pre-determined client use categories, wherein each client-use category reflects the client'"'"'s level of consumption of the analyst'"'"'s time over a time period;

(ii) second data indicative of the analyst'"'"'s estimation of how a percentage of the analyst'"'"'s time spent providing services to the clients was divided among each of the client-use categories over the time period;

(iii) third data indicative of the analyst'"'"'s estimation of how a percentage of the analyst'"'"'s time was spent with the clients listed in the survey versus non-listed clients over the time period;

calculate for each analyst and for each client-use category a first value indicating an estimated portion of the analyst'"'"'s time spent on clients in the client-use category, wherein the first value is calculated by allocating a total portion of the analyst'"'"'s time spent servicing clients in the client-use category pro rata over each client in the client-use category, and wherein calculating the first value comprises calculating the estimated portion based on the first data, second data and third data;

calculating, by one or more of the computer devices, for each analyst and for each client-use category, a second value indicating a compensation-weighted portion of the analyst'"'"'s time spent on clients in the client-use category, wherein calculating the second value comprises considering the first value and data indicative of the compensation of the analyst; and

calculating, by one or more of the computer devices, for each listed client, a compensation-weighted time spent by the analyst servicing each client over the time period, wherein calculating the compensation-weighted time comprises summing, for each client, the second values corresponding to each analyst that serviced the client over the time period, and wherein the one or more computer devices comprise a processor and an operatively associated electronic storage device.

19. A system for estimating the cost per unit of client touches for an equity research department, the system comprising a computerized client touch tracking system comprising:

a processor;

a network device coupled to the processor and adapted to communicate via a communications network;

a storage device in communication with the processor and storing instructions adapted to be executed by the processor to;

compute a plurality of first values, where each first value is indicative of a number of units of one or a plurality of client touch types produced by analysis providers in the department over a period of time, wherein the computing comprises;

receiving from an e-mail meter interfaced to an e-mail system of the securities research department data indicating analysis provider e-mails sent to clients;

receiving by the computerized client touch tracking system from a telephone tracking system, data indicating analysis provider telephone calls to clients;

receiving by the computerized client touch tracking system from an electronic mailing label system, data indicating electronic mail labels generated for analysis providers; and

computing the plurality of first values based at least in part on the data from the e-mail meter, the telephone tracking system and the electronic mailing label system;

compute a first allocation for each client touch type, wherein each first allocation is an allocation of support resource costs of the department over the period of time to the corresponding client touch types;

compute a second allocation for each client touch type, wherein each second allocation is an allocation of analysis provider costs of the department over the period of time to the corresponding client touch types;

determine for each of the plurality of client touch types, a cost of per unit of the client touch type, wherein determining each cost per unit is based on an aggregation of the first allocation and the second allocation for the corresponding client touch type divided by the first value for the corresponding client touch type, whereby the one or more computer devices generate a standard cost per unit for the plurality of client touch types; and

compute for each of the plurality of clients, a cost of servicing the client over the time period based on the cost per unit for each client touch type associated with the client and the number of touches received over the time period by the client for each client touch type.