Your clients rely on you to help them make informed decisions about advancing their financial goals. This is why portfolio reporting is important – it provides a framework for identifying risks, measuring performance and developing actionable investment strategies. Improving your reporting processes is also an effective way to build trust and enhance client relationships.
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5 Ways Advisors Can Improve Portfolio Reporting
Portfolio reporting ensures that your client’s investment structure reflects their needs and individual timelines. A strategic approach can help you glean the most relevant data to assist your clients when it comes to decision-making. Here are five ways to upgrade portfolio reporting and yield a better client experience.
1. Establish Clear Objectives
Portfolio reporting is most effective for you and your clients when there’s a distinct objective. Tracking performance or measuring risk are broad goals. Setting specific targets can help you determine where to focus your attention.
For example, your objectives might look like this:
- Identify the five best/worst-performing assets within the portfolio over the previous 12-month period.
- Measure shifts in stock/asset concentration over the previous 12 months against the client’s preferred allocation.
- Review changes in investment costs for each segment of the portfolio over the previous 12 months.
A thorough understanding of your clients and their particular needs is invaluable for shaping reporting objectives. Your portfolio assessment should reflect their top concerns.
2. Emphasize Accuracy
Portfolio reports are only as reliable as the data used to generate them. Creating a solid data management framework is integral for producing accurate reports that truly reflect the state of the client’s portfolio.
Elements of a strong data management framework include:
- A comprehensive and trustworthy customer relationship management (CRM) platform
- Financial planning software that includes robust data analytics tools
- Portfolio management systems that allow you to track data across client portfolios to identify risk and measure performance
- Compliance policies that ensure the safety and security of client data, including governing who has access to that data
- Data validation and consistency tools that automatically check for errors or inaccuracies
If building this type of structure yourself feels daunting, there are third-party data specialists who can help you implement quality assurance standards. The importance of accurate data can’t be stressed enough. Even minor errors can produce skewed results, potentially eroding client trust.
3. Choose the Right Format
You may be used to dealing with sizable amounts of data regularly, but your clients may not. When it’s time to present the results of your portfolio reporting, it’s important to do so in a way that the client can easily understand.
Portfolio visualizer tools can help you bridge this gap. Visualizers allow you to show your client projected outcomes, rather than just telling them. Demonstrating visually that X, Y or Z may happen if the client does A, B or C with their investments can potentially have a much greater impact than a recitation of numbers or figures.
4. Choose the Right Frequency
How often do you sit down with your clients to discuss their portfolios? More importantly, how often do your clients want you to sit down with them for a portfolio review?
One rule of thumb suggests that quarterly is appropriate portfolio reporting, but you may have clients that prefer a different pace. For instance, some may prefer monthly updates when market volatility increases, while others might be comfortable with annual reviews.
Surveying your clients can help you gain insight into what frequency might work best. You can also ask about their preferences regarding the format of the meeting. If you have clients who express interest in virtual meetings and that’s not something you’re doing yet, you might consider how you can introduce that capability to improve client satisfaction.
5. Use Technology
Tech has a firm foothold in the advisory space, and savvy advisors understand the value of leveraging it to manage portfolio reporting. Portfolio management tools can assist with virtually every step of the process, from data collection and organization to report creation.
When comparing portfolio management tools, consider these questions:
- How easy (or difficult) is to input data to the system?
- What features or functionality allow you to organize and track data?
- What degree of customization is available to help you create targeted reports for individual clients?
- Does the tool allow you to generate charts, graphs and other visualizations from the data you track?
- Are there built-in sharing capabilities that allow you to share reports with clients or other members of your firm?
- Does the tool offer an interactive dashboard or the option to easily extract data in PDF or Excel formats?
- Will you have the ability to track information for client assets held away?
- What type of customer support is available to help you integrate the tool into your existing tech stack?
Cost is another consideration. As you compare tools, look for options that offer a free demo so you can get a feel for how it works and what kind of value it might have for your firm.
Bottom Line
Effective portfolio reporting is essential for guiding clients toward their financial goals. By providing a structured approach to risk assessment, performance measurement and strategic decision-making, it empowers both advisors and investors to make informed choices. Enhancing your reporting processes not only strengthens investment strategies but also fosters trust and deepens client relationships, reinforcing your role as a trusted financial partner.
Tips for Growing Your Advisory Business
- Word of mouth and referrals can be two powerful drivers of growth for financial advisors, but it’s generally unwise to put all of your marketing eggs in one basket. If you’d like to expand your digital footprint, you could benefit from partnering with an advisor marketing platform. SmartAsset AMP (Advisor Marketing Platform) is a holistic marketing service that financial advisors can use for client lead generation and automated marketing. Sign up for a free demo to explore how SmartAsset AMP can help you expand your practice’s marketing operation. Get started today.
- As you navigate portfolio reporting, remember to keep recordkeeping requirements in mind. RIAs are subject to stringent compliance requirements regarding the types of records they’re required to keep and how long they must maintain them. If you’re searching for tech tools that can help with reporting portfolio, look for options that come equipped with built-in compliance features.
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