Is self-service reshaping traditional client reporting? – Part Two

Date: June 30, 2014

Laurie Hesketh, Director of Meradia Group, in conversation with Swati Bhoumick


What does traditional client reporting mean to you?

Laurie: It is a periodic reflection of performance and asset values. It describes what has happened in the past, and often is not current, depending on how far from month end the reports are distributed. Traditional client reporting is typically either paper-based or print-on-demand.

Why do you think that is the norm?

Laurie: Clients have historically received their reports quarterly or monthly as a result of the tremendous effort involved in producing finalized numbers. Providing more frequent reports would require asset managers to publish or provide access to preliminary data that may contain errors. In addition, asset managers are reluctant to offer more frequent visibility into longer-term investment strategies that haven’t yet had a chance to produce the desired outcomes.

Do you think clients are satisfied with the status quo?

Laurie: On the retail side, investors demand almost instantaneous access to assets and performance. Institutional clients are demanding more because they are used to getting faster, more transparent service on the retail side. It’ll be hard for asset managers to control client demands, especially with respect to Generations X and Y, who have the ability to immediately access all of their data on mobile devices.

Read: New Insights for Asset Managers: How Technology Can Drive the Most Effective Middle Offices


What are your views on the format of client reports? Do you think it is going from bespoke to standard report packages?

Laurie: Capabilities have exploded in recent years. The abundance of available data has expanded exponentially. The capabilities of the latest client reporting tools are incredible. Standard report packages are now more sophisticated. The standard report packages we typically see today at large firms have outpaced the most bespoke reports we saw ten years ago. Yet, many firms still don’t have the automation capabilities to produce even simple standard report packages. While the vision is consistent across the industry, the execution of that vision is not. There is still much work to be done regarding matching the underlying data and systems to the desired vision.

Is it because different systems are being used?

Laurie: Yes, there are still many legacy tools in use that lag far behind the technology curve. Additionally, market data is still a big part of the problem. You might be able to sell the ability to calculate a VAR statistic, but getting the data from market data providers to do it correctly is neither easy nor cheap. The underlying, foundational data layer needs to be in place in order for the flashier calculations to work. The trouble is that foundational data work is not an easy sell.

What do you think the change in reporting will look like, especially for Generation Y?

Laurie: Investors expect user-friendly, intuitive tools. Clients are demanding transparency, to be able to simply click on a portfolio and then drill-down into specific holdings. Further, they want to look at a holding and then drill-down into transactions, or see performance. Static information delivered on a report will fall far short of meeting expectations.

What are the other drivers of change, other than changing demographics?

Laurie: Technology has changed so much, especially in recent years. The speed of internet access and the capabilities of mobile devices represents a game-changer and has elevated expectations about what can and should be done using a mobile phone or tablet.

Do you think paper reports are going to go away?

Laurie: No, paper reports will remain an important tool in portfolio review. Clients will still want reconciled, month-end final asset statements and official book and records performance. Newer technologies will enable greater automation and faster delivery.

Everyone is talking about self-service reporting. What does it mean to you?

Laurie: To me, it means that I should be able to pick from a list containing any report component that I want. Traditionally, it’s been difficult for firms to keep track of the different report components desired by individual clients. We see most clients receiving the same report package components regardless of whether or not they want it.

Is there a downside to self-service reporting?

Laurie: Yes, training. A firm’s clients will need to know what data/information is possible and available. There is the danger that you may pare down the report to what one individual wants, but others in the same firm want something else so that requires more change. Usability will be the key.

What’s your view on the portal method of client reporting?

Laurie: Clients love the one-stop shopping that portals provide. But they want one login and interface that offers access to holdings, performance and regulatory reporting.

What do you think of cloud computing?

Laurie: Cloud computing gives smaller firms access to the same technology that is available to bigger firms, without an IT staff, and this is a significant positive. However, the flip side is that these firms have to rely on someone else for their data.

What is your perspective on outsourcing of client reporting?

Laurie: Outsourcing is gaining momentum as a result of secure portals. Firms need to either build a secure portal to distribute reports or consider outsourced options.

Find out more about how new technology is changing the game for asset managers, visit the self-service hub.

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