Read this article and learn about:
- What are investors looking for in client reporting?
- What defines a successful client reporting platform and what are the barriers?
- Why should firms invest in their client reporting platform?
- What are the changing industry dynamics that are impacting client reporting?
Jackie Alvarez, Principal, Investit, Intelligence Research
Client reporting makes an impression on your clients everyday – even more than your portfolio managers or client relationship professionals do. Client reports linger on desks, are passed around the office, and are the visual materials that provide the rationale for investment decisions made on the investors’ behalf.
The investment management industry thrived for over 150 years based on the notion that investors do not have the time, knowledge, or inclination to manage money and that they are willing to pay experts very well for their advice. In the past eight years, market volatility, regulatory change, and shifting investor expectations have questioned and eroded opaque industry practices. These factors are pressuring investment managers to change as poor, outdated and, at times, inappropriate operating practices are exposed. This exposure is inviting new thinking and changing old assumptions about client behavior and expectations, as well as what the leading operating platform and processing practices should be, including client reporting and communications.
Investors are demanding more and firms who respond with better and more targeted services will win
Today, investor expectations are redefining what constitutes great service from their investment professionals. Investors are wiser. They understand they have investment options, from the type of accessible products they can purchase to the managers they hire to manage those investments. They want more personalized products and targeted services to meet their specific financial objectives. They expect to access their investments and accounts anytime and anywhere with up-to-date accurate information put into the context of personalized communications. These expectations are driving a massive change in how investment firms structure their client facing activities. Firms that rally early and align their information delivery and communication methods to the new investor expectations can realize significant competitive advantage. Clients may not want to pay for a high-touch experience, but will certainly embrace it – if and when available.
Firms that rally early and align their information delivery and communication methods to the new investor expectations can realize significant competitive advantage.Jackie Alvarez, Principal, Investit, Intelligence Research
Investment managers are reassessing their client engagement offering
These shifting expectations are a catalyst for investment management firms to assess their client engagement strengths and weaknesses and adjust their offering to align with changing investor expectations. Information delivery and communications are fundamental to that alignment. Today, 90% of investment managers have moved to distributing knowledge and investor-focused content while reducing the use of glossy standard brochures dedicated to describing their company. With the focus on insightful and personalized content, investment firms are showcasing their strengths and how they are delivering value in achieving their client’s investment objectives.
Today, 90% of investment managers have moved to distributing knowledge and investor-focused content while reducing the use of glossy standard brochures dedicated to describing their company.Jackie Alvarez, Principal, Investit, Intelligence Research
Client reporting excellence creates competitive advantage
The last ten years have been difficult for both investors and investment professionals. Persistent market volatility and many quarters of less than optimal performance have fuelled a collective unease. Investors, in search of returns, add new asset classes to their portfolios, want greater transparency in assets held, and demand more insight into how an investment manager is bringing value to their financial relationship. This has encouraged investment managers to develop a more value-based relationship with their clients.
Responding to these changing dynamics has been a catalyst for investment firms to reassess each touchpoint with their clients. Today, a firm’s success relies on enriching their investor’s experience by tailoring services and customizing all deliverables for all investors in all markets. Investment management firms need to be more pro-active, communicate more frequently, and provide even more clarity than in the past.
Investors’ expectations are also influenced by new technologies that can ease access to their investment information. Combining innovation in financial products with innovation in investor reporting and digital communications creates opportunities for investment managers who are eager to lead the industry. Targeted knowledge content, personalized reporting, self-service portals, social media and mobile applications, are all tools that can help create greater investor loyalty and drive brand recognition.
Targeted knowledge content, personalized reporting, self-service portals, social media and mobile applications, are all tools that can help create greater investor loyalty and drive brand recognition.Jackie Alvarez, Principal, Investit, Intelligence Research