An overwhelming number of firms serving as external CIOs for private families and family offices said reporting capabilities were “very important” to their clients. But the majority of them aren’t satisfied with the quality of the client reports they provide, a new report finds.
While an overwhelming 83 per cent of firms
serving as external chief investment officers for private families and family
offices said reporting capabilities were “very important” to their clients, the
majority of them aren’t satisfied with the quality of the client reports they
provide, a new survey has found.
Almost half (46 per
cent) of those questioned for The Family Wealth Alliance’s recent External CIO Study are “less than highly satisfied” with
the quality of their client reporting services, while 38 per cent claim to have a list
of related improvements they’d like to make but can’t.
services that respondents would like to add include after-tax performance
analysis; partnership accounting for family investment vehicles; online portals
for client information access; better data aggregation; improved reporting on
illiquid assets; more sophisticated performance attribution; and the ability to
track investment performance versus financial planning goals.
According to the
report, reasons behind the barriers to upgrading include legacy technology
systems that are costly to modernize; the complexity of enhancements such as
after-tax reporting or partnership accounting; and the difficulty in finding
outsource technology vendors, among other factors.
The dissatisfaction in
quality of reporting could be linked to the fact that - as other industry
studies have previously suggested - wealth managers in the US are more
tech-savvy and therefore target a leaner business model than their global
“The US market tends
to be driven by investors that are more technologically savvy and demanding,”
Ryan Hicke, a managing director for the SEI Wealth Platform, previously told Family Wealth Report. Meanwhile,
FWA also said that the “many mentions” of online and real-time reporting
reflect client demands for better technology.
enhancements is “neither cheap nor easy,” the firm noted.