A brokerage firm has just been acquired by a large fund manager who wanted access to the client base of the firm. The purchase of the brokerage firm was done after due diligence. However, before reaching out to the newly acquired client base the fund manager wanted to analyze the client database in detail. The aim of the analysis was to identify the clients who met the following criteria:
- Have been with the firm for a long time
- Are probably going to stay for a long time
- Are at risk of churn
- Continue to have assets under management (AUM) with the brokerage, and the reasons for this
The fund-managers team decided to use survival analysis and ended up building a non-parametric, parametric, and a semi-parametric model to try and provide answers. Let's look into each of the procedures and their output. The analysis was broken down into the following steps:
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