It looks like each RIA posted record growth in both 2020 and 2021, and accordingly, each RIA is looking to add members to its team to help support additional customers. Many firms are seeking service consultants as well as customer service associates to handle customer relations who can help with paperwork processing and day-to-day administration of customer accounts. Recently we have been talking with more firms about the position of Performance Reporting Analyst. No matter what performance reporting tools your firm is using, you need someone dedicated to protecting the integrity of your data in the system, optimizing report and portal views, asset classification and accounts domestication.
Many RIAs don’t understand that when you partner with a performance reporting provider, you are purchasing that software package as “software as a service” or SaaS, meaning those tools are in your hands. and allowing you to use the software however you see fit. Someone from your firm needs to design and maintain everything inside the performance reporting database, which could easily be a full time job. Depending on the complexity of your clients, in-house arrangement of accounts can be extremely complex. For example, you need to identify the seven accounts that make up the Smith family and ensure that all seven accounts are tagged and linked together from a performance reporting perspective, and that all seven are in the client portal. are active, the client should log in and wish to review the assets you are managing for them.
Each position inside the database needs to be classified. For example, your firm needs to determine how you want to label Apple stock. Reporting software allows you to classify assets as you wish – you can label Apple as “Equity” or “Large Cap” or “Technology” or “Growth,” etc. You need to classify every security in a way that matches your firm’s investment perspective – the performance reporting vendor cannot do this for you, as each of their RIA clients classify securities in different ways.
You need to layout your quarterly performance reports and determine how you will deliver those reports every three months – are you emailing them through a secure link? Are you just posting them to the client portal and notifying the client when the report is ready? You also need to design the layout of the client portal and determine what the client can and cannot see when they log in. You need to keep track of external assets, and help clients reestablish their links with external accounts if/when those links break. You also need to manage client access and passwords for the portal – that alone can feel like a full-time job for anyone!
Keeping track of performance numbers can feel like a full-time job, too. Each quarter, as positions, transactions, and prices flow from the custodian to the performance reporting software, it seems like little gremlins break in and wreak havoc. And the problems pop up for different customers and different accounts each quarter, preventing you from flagging only five or six accounts that have problems over and over again — it’s always something different, a different one. in account. In a quarter, a muni bond position in a fixed account can be defrauded, increasing the value of the account and hence its performance. In another quarter, a journal or withdrawal may occur in a different account, which mistakenly reduces the value of the account, greatly reducing the performance of the account. One has to look for these little gremlins and fix these various problems every quarter.
For those RIA owners who tell us, “I don’t think this is a full-time role,” we remind them that we are now living in a 24/7 world where customers want to log into their client portal. To view their performance and their asset allocation, at any time, any day. This means you can’t just rely on a quarterly performance reporting cycle and QC these reports four times per year—someone in your firm should always be on top of data integrity, ensuring that the numbers inside the performance reporting tools are right. And not only does the Performance Reporting Analyst need to keep track of all of your existing clients, but they’ll also be in charge of setting up all of the relationships inside the software as you bring in new clients—something like we said at the beginning. This article is happening at a record pace right now. Since billing is often processed inside performance reporting software, a performance reporting analyst may process billing every month or even quarterly.
RIA owners typically shy away from adding headcount to non-client facing roles within their organizations, but as discussed, the integrity of your firm’s data is presented to clients on a daily basis. In that sense, the performance reporting analyst may be the most valuable role in your firm. We urge RIAs to consider adding this role to their rapidly expanding firm.
Matt Sonnen is the founder and CEO PFI Advisoras well as the creator of the digital consulting platform, COO Society, which educates RIA owners and operations professionals on how to build more impactful and profitable enterprises. He is also the host of the popular COO Round Table podcast. follow him on twitter @mattsonnen_pfi
