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The future of client reporting and the need for joined-up thinking

joined-up thinking

Client reporting is often seen as the sterile end of any investment process; a cost of doing business rather than an area that can add value for the end investor. Much of this perception is due to a lack of joined-up thinking on the part of the industry (investment managers, consultants and software vendors) concerning the reporting process and the needs of today’s investor.

Here are five factors that will influence the future evolution of client reporting and the obstacles that the investment industry needs to overcome.


The client experience

In the asset management world there are many activities involved in the client reporting process and most of these are entirely disconnected from one another. There is the client profiling (gathering data regarding the client); there is suitability (turning the client data into appropriate investment mandates); there is client engagement (online or face-to-face) and finally the reporting itself. There is an opportunity via evolving IT structures and CRM systems to bring all of these elements together and construct a seamless client experience.

Every client engagement point is an opportunity to update a client profile, which is then an opportunity to update the assessment on suitability, which is then an opportunity to re-engage with the client and ultimately review that client’s reporting. The client profile should be used to personalise all the elements in the chain. The best investment firms will tackle client reporting from a client-centric perspective, as opposed to one driven by processes or products.


A single view

There is also an imperative to provide clients with a single view of their investment performance. Consolidated reporting of all of a client’s financial affairs through a single portal would be hugely convenient, but it would also enhance the investment approach that the client receives through more informed asset allocation. The issue with this, of course, is that there has been very limited amounts of investment information sharing between banks, wealth and asset managers.

Data aggregation has also not been the major force that the investment community had anticipated ten years ago, largely due to a lack of APIs between the different software providers and the protocols of what information could be shared. The US wealth management industry has to date been more effective in this area, with providers such as Mint delivering effective data aggregation and consolidated reporting capabilities, using APIs between US software firms to present a single view of a client’s holdings.


Investment commentary

Investment commentary today still focuses very much on data and fact. The evolution of reporting will move more into the value-added area of providing commentary on why those facts have arisen, answering the ‘so what’ questions and what action may I need to take. The personalisation of these insights is key. The industry is still driven by what has happened, rather than on what needs to happen next. In this way the conversation will move up the value chain and away from the commoditised status that reporting is often afforded.

It could be said that investors need to know two things: is there something I need to do differently in terms of my investments on the basis of this, and if so, what should I do, and why. If not, then that commentary should be based around making investors feel comfortable about sticking with the solutions that they already have. Whilst I believe that this is broadly true, I would argue that there continues to be a place for the ‘what has happened’ analysis from managers – not least from an educational point of view as well as to assist in supporting or refuting opinions held.



In the future client reporting will be investor demand-led as opposed to investment manager-led. Rather than investment managers providing investors with the data and in the format that they believe the investor desires, clients will demand reporting that is entirely tailored to their needs. Unless their systems are able to deliver this, investment managers will fall behind. The ability of clients to interrogate data will become commonplace, with clients drawing down a report and then having the capacity to slice and dice the data to perform their own attribution measures. Effective client reporting will have to work on two levels in order to be a differentiator. It has to incorporate a flexible delivery mechanism and it has to provide the right, tailored content.


Cultural changes

Client expectations from investment managers are continuing to evolve. These expectations are not being driven by asset or wealth managers themselves but by the context and culture within which they operate. We are all consumers, in our own way, and we all have expectations from financial services providers as well as a familiarity with retrieving data (or even TV programmes) on-demand. Investing in good client reporting systems is a cost of business today; it will certainly not be a nice-to-have for clients in the future.


To conclude, the direction of travel for client reporting has to be an interactive model, driven by the client, rather than the product or asset class silo. The biggest obstacle to good financial decision-making is navigating the complexity of a client’s financial existence. Client reporting should, and will, reduce this complexity to facilitate better, more rapid investment decision-making.

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