By Bob Miller
I read Anton Honikman’s piece “The (Quarterly Performance Report) QPR is Dead” recently and thought it was correct in many of its assertions about the evolution of technology and its impact on advising clients and clients managing their investments. From my perspective as the CEO of a company focused solely on providing over 1,500 Ultra-High-Net-Worth families and their advisors with a total wealth view of their complex investment data, which is most often used to produce QPRs, I have trouble processing the QPR’s demise.
Will the QPR become the victim of a robo-this, digital-that and mobile-everywhere world of tech-lead advice (overuse of buzz words intentional)? For many advisory firms, the QPR has long been a carnivorous, zombie-like thing that paralyzes client teams every 90 days. It’s a moment of reckoning in the months since the last accountability. I understand why most would prefer not to have to prepare it. Indeed, for the millions of investors with portfolios consisting of public and marketable securities, their custodial and mutual fund statements provide a useful view of performance. If needed, they have endless internet and other resources to “drill down” on this information and increasingly receive robo advice about the meaning behind the numbers.
That said, I suspect many would not mind a thoughtful, consolidated and insightful view of their investments. Unfortunately, it’s more likely they will become victims of the common wisdom that all millennials are a self-directed and self-serviced species driven by instant gratification and comfortable with life’s most important events managed on their mobile devices. Reality is actually to the contrary. A 2016 survey by the Roubini ThoughtLab states that 55 percent of millennials value advice from experts and believe they will achieve better results by working with investment experts, while 56 percent believe people, not technology, make the best investment decisions.
On the other hand, UHNW families have a different set of challenges. Their wealth is complex and the aggregation of exposure and performance in a way that is meaningful to them requires customization. For these investors, the QPR is the absolute truth about a moment in their financial timeline. The QPR is there to be reflected on, and used as an apple-to-apple comparison of prior QPRs and trusted to be the word of the advisor. Once printed, it exists outside the digital realm. It is shared with a certainty about its authenticity, and no database glitch, internet outage or software upgrade can destroy its provenance. It is shared at lunches, with advisors and accountants, at trustee meetings and at family governance gatherings. It’s the best truth the family has at any moment and the basis of how a community makes decisions. In the end, the comparative analysis between periods, investments, families and business interests, ultimately exists only in this bespoke and advisor-curated document.
It's important to note that admitting that QPRs still serve a purpose is not a wholesale rejection of technology. There are hundreds of applications for a digitally influenced wealth management experience, as Mr. Honikman points out in his piece. For example, directional insights during the black-out between QPRs; a more interactive channel of communication, particularly during tumultuous market events; options to deliver digitally driven insights; and, yes, empowering investors to discover data so to develop their own insights. These are all positive improvements.
For UHNW investors, the demise of QPRs may not impact them in the short term. The future is about enhancing the experience between QPRs and ultimately serving generations that follow in a way that suits them. We have more than anecdotal evidence available on advisors and their clients—40 percent of the advisors serving our 1,500 families have not prioritized a real-time or mobile-reporting strategy for the UHNW clients outside of the QPR. These are not Luddite firms. They are progressive, large and technology-driven companies, focused on a well-honed client experience and proven to manage trust and efficiency. The QPR is still the primary artefact of this interaction.
Bob Miller is CEO and Vice Chairman of Private Client Resources, a data aggregation and portfolio reporting platform for UHNW clients and families.