Client Reporting 3.0

The term “Client Reporting” is a fundamental part of the asset management industry’s lexicon. Internal stakeholders understand it, vendors solve for it, and clients cite it as a significant factor in awarding mandates or establishing distribution agreements. It is core to the work of not only client service teams, but also the wider distribution organization in general.

With an asset manager’s brand increasingly tied to the quality of their client service, the definition of client reporting has changed over the last few years. This change has heralded a paradigm shift in the significance of strategic client reporting, the quality of which directly correlates to each firm’s position in the marketplace.

In this context, we noted with much interest that Neil Curham and Thomas Goldwater of Alpha FMC recently authored a timely blog on the topic. In their piece, the authors talk about Client Reporting 3.0, intimating that we are now standing before the third wave of client reporting within our industry.

At Kurtosys, we concur with this characterization. Margin drivers that result in efficiency gains provide a fundamental rationale. Cost reduction is a “here and now” issue in the asset management industry. Many firms have placed cost efficiencies at the top of their strategic priority list and, one could argue, this has been a long time coming.

So what makes this any different to times gone by, when asset managers felt the pinch during market corrections or underperformance? We believe that the latest round of cost cutting is driven by the need for permanent structural change in the industry. Fee compression, the need to scale assets, and the fundamental need to satisfy clients, has driven the industry straight toward Client Reporting 3.0.

Contrary to what one might think about selling strategies in asset management, the reality is that clients want to be sold to, in the sense that they desire the education and enlightenment that a stellar distribution team can avail them of. The difference is that they want this to be provided through exceptional client service and information provision about a firm’s strategy.

We see several fundamental changes:

  1. Telling and Selling: The best firms combine thought leadership with exceptional access to data supporting the client’s existing mandate commitments.
  2. No longer a “book”: It is no longer sufficient to provide just a book full of data. It is a narrative, carefully curated for the client but done on scale and, without exception, digitally.
  3. ESG Matters: The information content is fundamentally changing. A firm is now leaning on curated, issuer level research like never before. Full-service position research is a differentiator.

At Kurtosys we have spent the last 5 years building Client Reporting 3.0, allowing our customers to provide content and data through digital and print channels seamlessly. In 2021 we will allow clients to take their client reporting portals to their client’s iPads and mobile devices as native applications, further embedding their thought leadership and communications into the daily workflows of their clients. Through our Office based automation tools, we are allowing client service teams to drastically increase the efficiency of book creation and allocate their time to other high value activities. Finally, we have recently upgraded our platform components to easily handle the display of issuer level data for sustainability reporting.

Now more than ever, we believe the impact of first-rate service will have an outsized impact on a firm’s ability to retain and grow assets under management. We look forward to continuing to push forward the state of the art and helping our clients to do the same.