Cindy Sealey has more than 30 years of experience in the investment management industry. At Cutter Associates, she leads a CutterConsulting practice advising investment management firms on their sales & distribution, marketing, product development, consultant relations, client service, and client reporting functions. She helps firms design operating models, select systems, design client, account, and product data models, and implement systems. Prior to joining Cutter Associates, Cindy served as Vice President and Head of Operations for a division of Guggenheim Investments. She was also Head of Equities where she led a team of portfolio managers, research analysts, and traders. Cindy holds a B.B.A from Washburn University and she is a Chartered Financial Analyst.
Sep 08, 2021
Firms are increasingly using the standard client report to do more than provide a simple statement of accounts ─they’re looking to tell a story. Beyond the standard account performance data, firms are seeking to connect the dots between their data and investment strategy. Regardless of whether they have a bottom-up stock picking, global macro, or highly concentrated focus, firms want to remind investors of the value of the investment within the client’s broader portfolio. As a result, we’re seeing client reports that feature more commentary and attribution reporting to demonstrate a firm’s value to investors.
So, Which Is More Important ─ the Data or the Report?
Not surprisingly, the answer is: “Well, it depends.”
Different types of investors (whom we’ll refer to as “personas”) have different needs. For the purpose of explanation, let’s look at two personas ─ the CIO and the consultant. While both require a client report, their needs differ greatly.
CIO Client Reporting Needs
As senior decision makers, CIOs need to determine if investments are delivering as expected. They want to understand the factors that impact performance and the actions portfolio managers took to generate return within a given risk budget. CIOs often receive their client report as a PDF via email and are willing to take the standard report. They’re looking for relevant information that explains what drove performance.
Consultant Client Reporting Needs
Consultants’ requirements are different. To perform their analysis, they need to aggregate data from numerous firms. To achieve this, they often want the report data provided in a specific spreadsheet format that makes it easy for them to upload into their analytics system. Thus, consultants require a high level of customization. And although they like to have the data provided in their preferred format, they are notopposed to downloading it from a client portal ─ if the portal is easy to use and offers more timely data.
In summary, there’s no “right answer.” Firms need to evolve their client reporting delivery methods to meet the disparate needs of their client personas ─ and do so as efficiently as possible.
Is your client reporting team striving to support different client personas? Share your feedback below. Cutter members can also join the discussion in the Cutter Community, accessible via your dashboard at www.cutterassociates.com.