Flag rules are your framework's early-warning system. They define when a submitted metric should raise a flag — drawing the client's (and your advisors') attention to a value that's crossed into concerning territory. This guide explains how flag rules work, how to configure them, and how they appear to clients.
💡 Tip — Who can use this For firm admins. Read the Framework Basics and Metrics & Scoring guides first — this builds on them.
Quick reference
| Step | Action |
|---|---|
| 1 | Add flag rules per pillar with amber/red thresholds |
| 2 | Understand direction (below vs. above) |
| 3 | Write the commentary clients see |
Step 1 — Add a flag rule
Open a pillar's Flag Rules section (collapsed by default — click to expand). Click + Add Flag Rule to add a rule row.
Each flag rule has:
- Metric — the submitted metric this rule watches (same 19 metrics as the Metrics section). Pick the metric whose value you want to monitor.
- Amber threshold — the value at which a "watch this" amber flag is raised. The metric is heading toward a problem but isn't critical yet.
- Red threshold — the value at which an "act now" red flag is raised. The metric has crossed into seriously concerning territory.
- Benchmark — the reference target value for this metric. Used for context in the flag display (shows actual vs. benchmark).
- Direction — whether the flag triggers when the metric is below the threshold (for "higher is better" metrics like margin) or above the threshold (for "lower is better" metrics like churn).
- Commentary — the text shown on the client's dashboard when this flag fires. Explains what the flag means and, ideally, what to do about it.
- Remove — deletes the rule.
Step 2 — Understand direction (below vs. above)
This is the most commonly misunderstood field, so it deserves its own section.
"Below" direction — the flag fires when the metric's value drops below the threshold. Use this for metrics where higher is better (revenue, margin, on-time delivery, retention). If you set an amber threshold of 0.30 and a red threshold of 0.20 with "below" direction, then:
- Margin above 30% → no flag (healthy).
- Margin between 20% and 30% → amber flag (watch).
- Margin below 20% → red flag (act now).
"Above" direction — the flag fires when the metric's value rises above the threshold. Use this for metrics where lower is better (churn, attrition, time-to-fill, issue resolution days). If you set an amber threshold of 0.10 and a red threshold of 0.15 with "above" direction, then:
- Attrition below 10% → no flag (healthy).
- Attrition between 10% and 15% → amber flag (watch).
- Attrition above 15% → red flag (act now).
⚠️ Warning — Getting direction wrong suppresses real flags If you set a "below" direction on a metric where lower is bad (like churn), the flag will fire when churn is low (healthy) and stay silent when churn is high (the actual problem). Always double-check the direction matches the metric's nature. When in doubt, look at how the FORTIS framework configures the same metric.
Step 3 — Write the commentary clients see
The commentary field is the text displayed on the client's dashboard when this flag fires. It appears next to the metric name, actual value, and target, so the client understands not just that something is off, but why it matters and what to consider.
Write commentary that's:
- Specific to the metric — explain what this particular value means for the business, not a generic "this needs attention."
- Action-oriented — suggest what the client might do, or at least what to investigate.
- Plain-language — the client is a business owner, not a financial analyst.
For example, for a low gross profit margin red flag:
"Your gross profit margin has dropped below 20%. This means less than 20 cents of every revenue dollar is surviving to cover overhead. Review your pricing, cost of goods, or product mix — one of these is likely eroding profitability."
📝 Note — Commentary is shown verbatim Whatever you write in the commentary field is displayed to the client exactly as written when the flag fires. Your advisors can add their own commentary on top during review, but your framework-level commentary is the baseline the client sees. Write it carefully.
How flags connect to scores and the client experience
Flag rules and metrics work together but are separate:
- Metrics determine the score (0–100) for a pillar. They answer "how well is this area doing?"
- Flag rules determine the alerts (amber/red). They answer "what needs attention right now?"
A pillar can have a decent score but still have a red flag on one of its metrics (if, say, most metrics are healthy but one has dropped sharply). And a pillar with a low score might not have any flags if no metric has crossed a threshold (yet). They're complementary signals.
On the client's dashboard:
- Active flags appear on the Executive Overview (a count of amber and red flags) and on the Flags & Actions page (each flag with its metric, actual vs. target, and your commentary).
- On the Executive tier, any red flag raises a Critical Alert banner at the top of the dashboard.
- Your advisors can add their own commentary to flags during review and set their status (Active, Acknowledged, Dismissed) before publishing.
💡 Tip — Start from FORTIS and adapt The system FORTIS framework has 9 well-tuned flag rules covering all six pillars. Open it (view-only) and study the thresholds and directions it uses for each metric. Use those as your starting point, then adjust the thresholds to match your firm's methodology and your clients' typical ranges. Don't start from scratch — start from proven values and refine.