Being portrayed in the best light

Speak to any wealth manager or compliance officer about client reporting and no matter what system they have in place, be it a bespoke tailored solution or an ‘off-the-shelf’ package aimed at catering for the masses, the process is certainly never seen as a walk in the park.

In today’s competitive age, it can be said that clients are more demanding when it comes to the service they are receiving from their wealth manager and the key to winning and retaining them will more often than not rest upon the level of service they receive, as can be said for most industries. As a report is often the only communication a client will have with their wealth manager it is pertinent it portray them and, of course their actions on the client’s behalf, in the best light.

Perception and reality

Contrary to what a client would like to think, wealth managers do not have the time to personally tailor each report they produce for them alone. Even with a minimal number of clients, there just would not be enough hours in the working week. Thus it is inevitable there is a certain amount of automation of process that needs to take place behind the scenes before the wealth manager can dispatch the report and wait for the queries that will no doubt arise from the reports their clients have just received.

The start of any reporting cycle will almost always begin with the collation and perhaps verification of data. After all, a report is little more than the presentation of data in an attractive and clear style. What is often overlooked at this stage in the process is the probability the data that will end up in the final report comes from a variety of different systems within the business and thus is in a variety of disparate formats.

Take, for example, a firm which maintains a separate CRM system from their back office database that records the transactions they need to report. Then factor in that on top of these two systems they may also calculate their management fees in a separate spreadsheet, perhaps run by their accounts department, and may also maintain word documents with market commentary they also wish to display in the report. Although all these systems may function perfectly well separately, to use the data they hold in the same report can present many issues, not least maintaining the meaning that data has within the host system when it has been extracted.

Customise and collate

Most reporting solutions fall into one of two camps when it comes to dealing with collating this data. The ‘generic’ or ‘off-the-shelf’ solution will more often than not be flexible enough to afford the user the ability to utilise any data they wish to report on, as long as the user sets the system up correctly. However, it is this very nature which can mean a great deal of work needs to be done in the report template itself — the data is output in a very flat structure, so further logic is needed to produce the sequencing and grouping that is often required in reports. Think of a statement of investments and performance for a client with multiple portfolios. The chances are this report will contain a number of different individual reports, including trading statements and portfolio valuations, which in turn may be grouped by classification of a security type or country of origin, or often both. In this case a large amount of customisation will need to be done in the report template to produce the look and feel a client would expect. This is all achievable with a little effort from the designer, although it can become an arduous task when many different clients have individual requirements.

At the other end of the spectrum are the bespoke reporting solutions which maintain a database of the data you are working with in order to make the process less painful. These systems use pre-defined databases (and hence can also be known as static reporting systems) to ensure the meaning the data had within its host system is not lost when it is extracted and there is, therefore, more synergy between the underlying data and the template design. With this improved process the reality is that less logic needs to be maintained within the template, making it easier to create a large number of customised reports.

The downside with this solution is, for most firms, the cost. Initially there will be costs involved with tailoring the application to accept and define storage for the data required, as well as the inevitable levy to the back-office provider to make that data available to the reporting application. In addition, due to its design, further cost will be associated with any new data fields that may be required not only at extraction stage, but also within the reporting application to ensure this data can be accepted.

Cost versus quality

Falling in between the generic and the static solutions, some reporting applications will offer a halfway house arguably offering the best of both worlds. These systems do not maintain databases as such, but instead collate data at report generation and create a ‘data-model’ to map out relationships between data, thereby retaining meaning and hierarchy. Such applications afford the user more control over changing both the underlying data they are reporting on and the customisation of templates. Costs are kept to a minimum as the reporting application can be pointed at any data item and the template design becomes more accessible to someone who might not understand the data definitions as such, but knows how to create a good-looking document. After all, in many firms the right person to work on the design of a report may not have the knowledge of the data to be able to create intricate logic in the templates.

With increased client demand for accurate and timely reports in an accessible format, it is no surprise that client reporting is a time-consuming and complicated task. Fortunately, there are now client reporting applications that reduce the effort involved without compromising on report quality. And — just as importantly for clients — they leave wealth managers with more time to focus on maximising investment returns.