Spillage is the revenue that evaporates at the very beginning of the revenue lifecycle, during scoping, pricing, proposals, and onboarding. It never reaches billing, which makes it easy to miss and costly to ignore.
What revenue spillage is, plainly
In wealth and asset management, small choices at the start of a relationship compound. A cautious discount to “win the deal,” a proposal that drifts from policy, a household not linked on day one – each decision seems harmless. Together they create spillage: value lost before the first invoice is generated. It’s not a back-office error or a collections issue. It’s a front-of-house problem that hides in everyday decisions.
Why spillage is everywhere
Most firms don’t deliberately under-price. Spillage happens because frontline teams are trying to do the right thing for clients with imperfect information and uneven guardrails. Common realities we see across the industry:
- Policy in theory, exceptions in practice: fee schedules live in PDFs, while real pricing decisions live in email threads and spreadsheets.
- Discount drift: proposals cluster at the bottom of fee bands “just to be safe,” even when the scope warrants more.
- Proposal variability: similar client profiles receive different terms because context isn’t shared and approvals are inconsistent.
- Householding gaps: related entities aren’t linked at onboarding, so pricing doesn’t reflect the true relationship.
- Contract mis-matches: wording in proposals, agreements, and disclosures isn’t aligned, creating write-downs and review friction later.
None of these issues look dramatic in isolation. But they skew forecasts, thin margins, and create operational noise that distracts leadership from growth.
Where you’ll notice it first
Spillage shows up in patterns, not single events. Leaders often spot it when:
- New-logo yield lands below policy, month after month, with no clear rationale on file.
- Exception logs grow faster than new business wins.
- Advisors rely on “old” proposal templates or spreadsheet versions that don’t match current policy.
- Onboarding re-keys proposal terms, creating differences that only appear at billing.
If these symptoms feel familiar, you’re not alone. This is industry-wide, and fixable.
Why this is mission-critical
Because spillage is invisible to most reporting. If a discount happens before an account is live, it rarely triggers a reconciliation break. Forecasts look fine until actuals arrive light. Over time, those small variances become a structural drag on profitability and a source of frustration for frontline teams who feel forced to discount “just in case.”
The antidote isn’t aggressive pricing; it’s confidence. When teams have credible context, recent comparables, segment guidance, clarity on what’s included, discounts become intentional choices instead of reflexes.
How to reduce spillage without boiling the ocean
- Make policy easy to use: bring fee bands and definitions into the proposal workflow; don’t bury them in documents.
- Require a reason for concessions: short rationale fields and simple approvals reduce unnecessary discounts.
- Link households at the start: connect related parties and entities before the first agreement goes out.
- Keep terms consistent: align language across proposals, agreements, and disclosures so what’s promised is what’s billed.
- Review patterns, not one-offs: track average discount from policy yield and the share of deals closed within band by segment.
For a structured overview of levers, pricing architecture, revenue packaging, segmented monetisation, and governance, read more about Core Levers here.
Where to go next
If you need language or checklists to align cross-functional teams, start with the signals and triage checklist, then use the whitepaper for deeper background on incentive design and governance patterns. Together, these two resources frame the problem clearly and help teams make better, more consistent pricing decisions.
