Client communications and reporting

Transforming and enhancing client interactions for competitive advantage

Read article and learn about:

  • What best-practice client communications can do for you
  • How to leverage client reporting technology
  • Top technology initiatives that transform client communications
  • How client reporting techniques enhance alpha generation
  • Next-generation client communications and reporting

About the author:

Darrin CourtneyDarrin Courtney is an executive advisor at CEB covering wealth management.


Darrin Courtney has more than 20 years of wealth management experience and researches how technology supports the distribution and servicing of investment products.

Gert RaevesGert Raeves is an executive advisor at CEB covering capital markets.


Gert Raeves has over 15 years of financial services experience and covers strategic issues facing buy- and sell-side firms globally.

About CEB
CEB is a leading member-based advisory company that equips over 10,000 organizations around the globe with insights, tools, and actionable solutions to transform enterprise performance.

To forge loyalty and grow revenues, most wealth and asset managers realize they need more and better dialogue with clients. To improve efficiency and preserve profits, they are also challenging their operating models. To help meet these goals and secure service differentiation, this article highlights ways to leverage investments in client communications and reporting technology.

With competitive pressures driving them, investment managers are focusing on cost-effective ways to enrich client experience and transform the way they communicate with clients. Some might say that automated client reporting tools are becoming commoditized. However, smart wealth and asset managers are finding that these tools can put the client in the driver's seat, as they seek greater value from their interactions with advisors and relationship managers.

Cost-effective ways to enrich client experience and transform client communication

Ways to transform and enhance client interactions for competitive advantage include:

1. Empowering business users to generate relevant, high-quality, and timely reports
2. Re-using data and reporting assets across the business – a two-step process
3. Offering interactive, mobile tools to differentiate on more than just performance
4. Pioneering goals-based client reporting
5. Embracing outsourced infrastructures to reduce total cost of ownership

1. Empowering business users to generate relevant, high-quality, and timely reports

A central business intelligence unit delivers the information investment managers and clients require. The unit’s specialist business analysts extract data and create reports for a specific business purpose. This may include evaluating specific portfolio performance, reviewing sector allocation, or comparing performance. They are interested only in a very specific dataset, presented in a particular format and style, which can generate a very high number of pre-configured reports – 600 to 1,000 is not uncommon.

The cost of executing these processes manually is often very high and time-consuming. Depending on the technology used, and the skill of the business analyst, each report configuration takes many hours or days, and the process is often error-prone. The need to produce hundreds or thousands of tailored reports creates a number of issues, not least the difficulty of avoiding duplication or data overlap.

This is where self-service information access comes into play. Self-service client reporting tools allow all users – whether wealth or institutional – to specify what is currently relevant, tailor a report to individual requirements, and generate high-quality output at a moment’s notice.

However, there is a distinction. Self-service for wealth involves high-net-worth (HNW) clients accessing information on an ad-hoc basis, whenever they want to, and advisors having access to historical and current data during client meetings. For institutionals, it’s more about client services teams using online tools to prepare client reports, meeting packs, and pitch books faster on an ad-hoc basis.

From a technology perspective, implementing a tool that selects data points and presents them as pie charts is not a significant hurdle. The greater challenge – if asset managers want business users to have the ability to assemble, interrogate, discover, and explore using their own business knowledge – relates to data quality, integrity, and governance.

High degrees of automation in maintaining data integrity are the secret ingredient. Self-service access tools allow more of the pre-work to be automated, and more of the data to come directly from source systems, eliminating the painstaking task of controlling data quality and integrity manually.

A new generation of investment managers and business intelligence professionals is emerging that is very much more empowered than their predecessors. It has the knowledge, IT literacy, and appetite to maintain data integrity and report content, and to implement the technology tools available. This guarantees control of client information quality and interactions, and ultimately breeds client loyalty and promotes business growth.

6 categories of ‘value’ derived from technology investments:
  • financial ROI
  • functional coverage
  • process improvement
  • competitive advantage
  • ongoing costs/maintenance
  • enhanced client value

Source: CEB TowerGroup

CEB TowerGroup analyst research has found that 63% of executives surveyed classify client reporting as a “somewhat” to “very high” value technology.1 The most selected value driver overall is competitive advantage.

Client reporting is unusual in that “enhanced client value” ranks twice as high as other value drivers on the list. Highly process-oriented business functions, like settlement processing or accounting, are more likely to rank “functionality coverage” or “process improvement” highest.

Unsurprisingly, more than a third of surveyed executives expected to increase their spending on client reporting by 2015.

2. Re-using data and reporting assets across the business – a two-step process

Asset managers should view client reporting not as a standalone business application, but as a broader, client-servicing data-centric machine. Its purpose should be to generate data that any business function, application, or individual can use, creating an accurate and consistent view of every client, investment performance, portfolio structure, etc., while at the same time enabling controlled customization.

The first step towards this is to formulate a forward-looking technology plan to automate and integrate these business functions. Each function should be able to use the same data to meet client requirements. The key is to focus on assembly and presentation of data in a relevant and meaningful form, rather than on how to find it, classify, and extract it.

The second step – once a central, shared data repository is established – is to leverage firm-wide data management procedures (i.e. validation, aggregation, normalization) and apply workflow processes that facilitate data sharing. These processes can also monitor internal usage of specific types of restricted data, such as paid content (e.g. pricing and valuation data).

Client reporting is a great example of this two-step process. Many asset managers start by automating business processes, focusing on data quality, data sourcing, and data validation. Then they move on to presentation. Increasingly, firms are tackling data management first, because this is a firm-wide function not specific to client reporting. The second step is very important, because it is the client reporting-specific technology tools – report generation, channel support, and presentation layer – that enhance client value the most.

Being ahead of the curve on technology-enabled innovation is a competitive differentiator, and there is an obvious multiplier effect. Once the data groundwork is complete, the only way is up. You can use the same data for any business function, and you are making operational and IT savings. But you are also in a position to report more consistently than your competitors, which means that you are able to communicate with your clients in a more effective and engaging way.

3. Offering interactive, mobile tools to differentiate on more than just performance

CEB ownership of tablets and smartphones
Figure 1. Client ownership of tablets and smartphones (% of respondents). Source: CEB, 2013.

In wealth management, consumer-driven interactive and mobile technologies are outpacing the services advisers deliver their clients. Despite not using these technologies themselves to improve interaction with clients, wealth managers must recognize that their clients are looking for online and mobile interactions, and more self-service tools. The vast majority of HNW clients own a smartphone or a tablet, usually both (see Figure 1), but many wealth managers have yet to provide a good mobile solution.

Two key factors come into play here:

  • The biggest goal for wealth managers surveyed by CEB TowerGroup analysts is to improve the value of advice given to HNW clients. For decades, wealth managers have been trying to develop a consolidated adviser desktop, where financial planning, reporting, CRM, trading platforms, and other systems talk to each other, and advisors can find the information they need to interact effectively with clients. Fulfilling this goal is driving an increase in front-office technology spending.
  • The next consideration is how to extend these capabilities to tablets and mobile devices, so that advisers can use these tools to deliver a better client experience. The goal goes beyond simply web-enabling everything on your desktop, so that you can view it in a browser on your mobile device, or smartphone. The smartest wealth managers are bringing together the most important aspects of their desktop tools to stimulate robust, interactive, collaborative conversations with their clients. Ultimately, a solution that pulls together the essential parts of all these devices and facilitates effective adviser-client dialogue will deliver the greatest benefit.

In time, client reporting has a huge opportunity to bring together past and future technologies to deliver a step-change in client experience. It is some way off, but this kind of progress is all about having accurate, relevant, and timely information readily available to improve the quality of client interactions.

While digital technologies are important for advisers, HNW clients also expect to be able to self-serve, providing them with ad-hoc access to portfolio valuations and other client communications via interactive client portals and mobile devices (see Figure 2). Client preferences are definitely shifting towards ad-hoc reporting.

CEB HNW Clients preferred method of conducting interactions
Figure 2. High net-worth clients’ preferred method of conducting interactions. Source: CEB, 2013.

4. Pioneering goals-based client reporting

Goals-based client reporting pushes the boundaries of ultra high-level customization. HNW clients want to understand the real implications of their portfolios measured against personal life goals, in addition to industry benchmarks.

Here it is important to stress that, provided the underlying data in the right form is present, anything can be reported. Wealth managers do not have to fear that their reports will not properly reflect investment performance.

Yet some are reluctant to embrace goals-based reporting, because even if they have performed exceptionally well when the market has not, the reports can indicate the opposite. Also, many simply do not have the data in a form that facilitates goal-based reporting.

This is why hardly any wealth managers are delivering goals-based reporting today. This kind of forward-looking reporting differs greatly from historical benchmark reporting. But wealth managers are starting to think about it, and some of the larger trust funds are piloting a goals-based approach. However, there remains a disconnect between what clients want and what wealth managers are delivering.

5. Embracing outsourced infrastructures to reduce total cost of ownership

Wealth management firms are generally more advanced than those in the capital markets space when it comes to adopting Software-as-a-Service (SaaS) and remote hosting models. Uptake in Asia and Europe has been slightly ahead of the North America curve.

Institutional investment managers remain more culturally and technologically biased towards keeping institutional client reporting data on premise, although some of the largest, most forward-thinking firms are issuing strong top-down mandates to outsource technology infrastructure wherever possible.

Investors, stakeholders, and borrowers are telling institutional investment managers that they must find ways to make outsourcing or zero-infrastructure a possibility, in order to remain firmly focused on the business of investment management rather than on IT infrastructure maintenance.

SaaS, outsourced hosting, and hybrid-cloud client reporting platforms have been very credible options for several years. Several service providers offer such solutions, while risk and compliance objections are becoming less weighty, and for firms with a mandate to outsource, client reporting is often a test application.

Wealth managers have led the way, and institutional investment managers are now considering outsourced infrastructures more seriously, especially as they involve shorter deployment timescales, rapid ROI, and a viable means of improving the operating model.

Sizing up the competitive advantages

This article pinpoints the top technology initiatives that are transforming the way investment managers communicate with clients. As next-generation client communications and reporting solutions become more closely aligned and integrated with other mission-critical systems and processes, investment managers and their clients can look forward to a step-change in the quality of their interactions.

In the meantime, although cultural and technology advances are required to keep pace with clients’ wants and needs, wealth and asset managers should seize the opportunity to leverage their investments in client reporting technology to achieve differentiation and alpha generation through effective client communications.

1. Source: CEB TowerGroup, FSI Technology Survey, CEB, 2013-2014.