Generating Client Reports Wealth

Generating Client Reports Wealth

When To Use

• Preparing for a quarterly or annual client review meeting
• Producing periodic wealth reports (performance, net worth, cash flow)
• Documenting progress against financial planning milestones (retirement, education, estate, philanthropy)
• Responding to ad hoc client requests for portfolio or planning status
• Onboarding summaries that consolidate a new client's held-away and custodied assets

Inputs To Gather

• Reporting period: Start/end dates; comparison periods (prior quarter, YTD, since inception)
• Account and custodian data: Custodial statements, held-away account extracts, alternative-investment capital account statements
• Asset allocation targets: Current IPS or model allocation; any recent changes approved by client
• Performance benchmarks: Blended or asset-class-specific benchmarks agreed upon in IPS
• Net worth components: Real estate appraisals, business valuations, liabilities (mortgages, lines of credit, notes payable), insurance CSV, vested equity compensation
• Planning milestones: Financial plan assumptions (return, inflation, spending), goal-funding status, Monte Carlo or deterministic projection outputs
• Tax and cash flow data: Realized gains/losses, estimated tax payments, income and distribution schedules
• Client preferences: Level of detail (executive summary vs. full book), preferred visualizations, any topics the advisor wants highlighted

Workflow

1. Confirm scope and period

   • Agree on reporting date, comparison periods, and which accounts/entities to include
   • Identify whether report is performance-only, net-worth-only, or comprehensive (performance + net worth + planning)

2. Aggregate and reconcile data

   • Pull holdings, transactions, and valuations from all custodians and held-away sources
   • Reconcile beginning-of-period market values to prior report's ending values
   • Flag any stale prices, missing cost basis, or unpriced alternatives with [VERIFY]

3. Calculate performance

   • Compute time-weighted returns (TWR) at portfolio and asset-class level for each period
   • Where applicable, compute money-weighted returns (IRR) for private capital accounts
   • Compare to agreed benchmarks; calculate excess return and contribution/detraction by asset class
   • [VERIFY] Confirm fee methodology (gross vs. net of advisory fees, net of fund-level fees)

4. Build net worth statement

   • List investable assets, non-investable assets (real estate, business interests, collectibles), and liabilities
   • Show period-over-period change with sources of change (market movement, contributions/withdrawals, debt paydown)
   • Note any values based on estimates or prior-period appraisals with [VERIFY]

5. Summarize planning progress

   • Restate top goals (e.g., retirement at age 62, education funding for 3 children, $X legacy target)
   • Report current funding status or probability of success for each goal
   • Highlight material assumption changes (spending, returns, life expectancy) and their impact
   • Note action items from prior review and their completion status

6. Draft narrative and commentary

   • Write a concise executive summary (3-5 paragraphs) covering market context, portfolio actions taken, key results, and recommended next steps
   • Use plain language; avoid jargon the specific client is unlikely to understand
   • Flag any recommended rebalancing, tax-loss harvesting, or planning adjustments

7. Assemble and format report

   • Structure sections: Executive Summary, Performance Review, Asset Allocation, Net Worth, Planning Progress, Action Items
   • Include tables for returns (with benchmarks), asset allocation vs. target, and net worth schedule
   • Attach or reference supporting schedules (transaction log, realized gain/loss, fee summary)

Output

• Client Review Report containing:
  • Executive summary with market commentary and key takeaways
  • Performance table: portfolio and asset-class TWR vs. benchmarks for QTD, YTD, 1-yr, 3-yr, since inception
  • Asset allocation snapshot: current vs. target with drift analysis
  • Net worth statement: assets, liabilities, total net worth, period-over-period delta
  • Planning progress dashboard: goal names, target values, current funded status, probability of success
  • Action items: open items from prior meeting, new recommendations, responsible party, and target dates
• Supporting schedules as appendices where applicable

Quality Checks

• All return calculations reconcile to custodian-reported performance within acceptable tolerance (typically < 5 bps)
• Beginning market values tie to prior-period ending values; any breaks are explained
• Asset allocation percentages sum to 100%; benchmark blend weights match IPS
• Net worth totals foot correctly; assets minus liabilities equals stated net worth
• Every stale valuation, missing data point, or assumed figure is tagged [VERIFY]
• No forward-looking return projections are presented without clear disclosure that they are hypothetical
• [VERIFY] Report complies with firm's regulatory obligations (e.g., SEC Marketing Rule for performance advertising, GIPS if claimed)
• Client name, account numbers, and period dates are accurate on every page
• Narrative tone is appropriate for the client's sophistication level and preferences