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What reports do you include on your client reports

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May 7, 2008 1:18 pm

I’m a new RIA and so enjoying the freedom of not having to deal with a broker and having more leeway in preparing client communications.

I’ve been working on my client reports. I was wondering what others include in their reports? And how often do you prepare them?. I’v opted with quarterly reports and am still trying to decide on what my permanent content will be (ie my reports are still evolving!)

I am using an excel based spreadsheet as the source for the data. I have test drove a few of the well known programs but I find most of them far too involved for my client scenarios and their holdings. 

Currently on the report are the following:
Holdings as at report date (listed and in graph form with % of total portfolio)
Asset allocation (don’t know if this should be on every report?)
YTD and quarterlyperformance of each asset in the portfolio
YTD performance of related indexes
Unrealized gains
Cost and current value

Is there anything else you put on your reports that your clients find useful?

May 7, 2008 2:14 pm

You’re going to produce client reports using Excel?  Manually, for each account?

Wow.  That’s doing it the long, hard and scary way. 

What Portfolio Management System are you using?  That should narrow the possibilities a bit.

May 7, 2008 2:35 pm

Good.  That makes much more sense, although I’m not familiar with that product.  I guess you must know intrigued, ice, to be able to answer on his behalf?

May 7, 2008 4:14 pm

Thank Ice -that is pretty much how it happens. I’m using a software an associate designed that imports data at the click of a button. I like the flexibility of the excel base as I can customize the reports to my hearts desire. 

I’m using Fundmanager for portfolio management but do not like it’s reports hence my desire to use this alternative. 

I was just curious as to what information you feel is important to be communicated to the client each quarter.

May 7, 2008 9:19 pm

I think providing returns for each asset held within the portfolio is overkill. In my opinion, it is your responsibility to monitor the returns for each asset within the account.

If something isn’t working, that type of reporting should be done on YOUR level, and not the client level. If, however, you want your client to scruitinize everything in the account, you are free to provide them with as much detail as you like.

In our reporting (and we have two levels… detailed and simple) we focus on the important issues - 1.) how we are doing, and 2.) the asset allocation (generally, and specifically) within the portfolio. We break each account down by return, and also provide a return based on the aggregate client portfolio.

You can benchmark, which we don’t do on the reporting level, however, some clients will become fixated on the comparison. We do, when reviewing items on the flatscreen TV in the conference room, review relative performance. But, it’s only at that point that we get to explain what is happening on a relative basis. That being the case, it’s better to provide some dialogue when making comparisons to benchmarks just to make sure that the client isn’t forming their own story and coming to a poor conclusion.

The report should have as many levels as you wish. But, bear in mind, your clients are mostly interested in knowing how they are doing, and could rarely care about the specifics within the portfolio (that’s what they are paying us for). So, don’t get too detailed, but DO provide enough information that makes the client feel they can understand the actions and returns within their account.

Don’t get too complicated.


May 31, 2008 5:42 am

Through LPL we have portfolio manager reports.  We can show MIRR rates of return, which is really nice.  But I do find it harder to use these reports on advisory accounts.  The reports show the cumulative advisory fees, so if I want to show someone how they did for the past 3 years, it also shows the 3 years of cumulative fees.  Which can start to look big when it is shown like that in such a short summary.  In other programs the fees aren’t show separately.  Any other LPL folks have thoughts about using Portfolio Manager with Advisory Accounts?  I know I should be confident in my fees, and showing them on a report, all while pounding on my chest, but I still feel a little awkward about it.  Thoughts?