Commentary & Analysis
Automating the Client Reporting Process
By Brent Burns The process to produce client reports for both individual and institutional investors is time consuming,
By WhatTheyThink Staff
Published: March 22, 2005
By Brent Burns The process to produce client reports for both individual and institutional investors is time consuming, lacks professionalism, and is prone to mistakes. March 22, 2005 -- As financial services organizations focus increased more of their attention on wealth management and high net worth customers, the issue of providing clients with a total view of their financial position is becoming more critical--and complex. Both retail and institutional investment advisors are being asked by their clients for more detailed, on-demand reporting of financial information. Likewise, investment advisors would like to be more proactive in communicating with their clients. Surprisingly, as sophisticated as the financial services marketplace has become, the issue of client reporting continues to be largely a manual and onerous process for most financial institutions. As described by one large asset management firm, the process to produce client reports for both individual and institutional investors is time consuming, lacks professionalism, and is prone to mistakes. Not comforting words for an organization that is faced with meeting constantly changing regulations and increasing client demands. Furthermore, the risks associated with a manual client reporting process took on new meaning with the introduction of Sarbanes-Oxley, which requires "identification and documentation of internal controls over financial reporting," most of which do not exist for client reporting. Client reporting includes the ability to analyze the client's current position, review top- and bottom-performing investments, prepare for any investments that may be maturing in the near future such as bonds and CDs, and provide other value-added investment services. The term "client reporting" refers to much more than a current statement of balances and recent transactions, which most banks and investment firms have provided via the web for several years. Rather, client reporting includes the ability to analyze the client's current position, review top- and bottom-performing investments, prepare for any investments that may be maturing in the near future such as bonds and CDs, and provide other value-added investment services. In addition, the investment advisor often includes some personal note or information about him/herself to reinforce the personal relationship with the client. To add complexity, both the client and investment advisor are requesting the flexibility to obtain these custom reports via email in PDF format, in a personal PowerPoint presentation, or, ideally, as an online self-service reporting system that allows clients to create their own customized reports. Many firms already provide their clients and investment advisors with these types of reports, but the process to produce them is very time consuming and involves little, if any, automation. According to another leading asset management firm, a request for a personalized client report takes between 10 and 20 days to be fulfilled. Typically, the request is generated by the investment advisor who calls or emails the request to a central administrative reporting person. This person then logs on to several different internal reporting systems in order to pull data and account information on a particular client. The information is then manually typed into an Excel spreadsheet, which provides the ability to produce some type of graph or chart. These graphs are then copied and pasted into a PowerPoint slide, which the investment advisor can then present to the client. Needless to say, the opportunity for human error is high and the ability to produce the client report quickly is non-existent. Since many investment advisors are producing one-off documents themselves, many marketing, legal and compliance department personnel are concerned over the number of documents that fail to reflect the appropriate marketing standards, legal disclosures, and level of quality that is required. According to one leading asset management firm, a request for a personalized client report takes between 10 and 20 days to be fulfilled. There is a clear need for solutions that can help financial services organizations link all of a customer's information together to produce dynamic personalized reports that meet the requirements of both clients and investment advisors. An effective solution must include the following: A browser-based front end that allows the client or investment advisor to interactively choose the content modules they want to appear in the report. The flexibility to produce all types of charts, graphs, and images. The ability to accept information from multiple internal systems, data warehouses, ECM systems, and other data sources without requiring the institution to normalize the data. A collaborative environment that allows marketing and legal groups to control content to meet the institution's requirements. The ability to produce output that is personalized in a PowerPoint slide show for the investment advisor or a PDF booklet for the client. A comprehensive platform for producing all types of document applications so that client reporting can be integrated with all the other communications the institution sends its clients. Meeting these criteria will give an organization the advantage of being able to produce consistent, timely, and accurate documents for its clients. Until a financial services company invests in such a solution, it will be forced to continue its manual processes, which cause issues for its employees and can even put the company at legal risk.