So I came across this article today, called Retiring The Portfolio Screenshot. I opened it thinking it was something about what clients see about their investments on wrap platforms. But it isnâ??t. Itâ??s about creative types doing better demos of the work theyâ??ve done for clients.
So, you know, whatever and good luck to them with that. But this does make me think about the quality of information available to clients on platforms (and elsewhere) and how pointless most of it is.
For those not initiated, great practice for most platforms is a pie chart with splits of where money is invested (either by sector or by tax wrapper). Then there are generally some tables, often with platform-specific naming conventions that donâ??t even mean much to the poor sods who made them up.
Click into performance screens and life gets even more unbearable for the non-techy. Leave aside the fact that many platforms donâ??t do weighted performance (taking account of when monies were added to a fund over time) and concentrate on the fact that most performance charts at best use frankly meaningless benchmarks that have nothing to do with an investorâ??s attitude to risk or capacity for loss, and weâ??re already at a place that looks pretty unevolved.
Some will say that this is an argument for clients to place all their faith in advisers and not look themselves, but that canâ??t be right. Power in this new transparent age exists in being the conduit to information, not in being its gatekeeper, doling it out like sweeties to children. Weâ??ve got to find something better, especially as we evolve our understanding of clients as actual walking, breathing, illogical, multichannel bags of meat and bone and water and icky stuff that canâ??t be expected to behave nicely and understand that they belong to either a provider or adviser.
Whatâ??s the answer? Better personalization, maybe, or perhaps platforms and those who use them need to take a properly holistic view and accept that their own online real estate is swampland as far as clients are concerned. Services like Yodlee are allowing firms like True Potential to build new client front ends that bring non-platform assets into the mix and interrogate them in new ways. TP has done a good job with this stuff â?? not finished, but a step ahead of most. Some other platforms like Cofunds, Transact and others have integrated with a Yodlee-powered service called Moneyinfo, which means their other financial data can be pulled in to an on-platform environment. Thatâ??s unselfish (the platforms don’t make any money from clients seeing their bank accounts etc) and a good thing.
For me, I see so much good practice in terms of factfinding, goal-setting and risk profiling now that itâ??s almost criminal that advisers are still having to stitch together propositions to give decent reporting to their clients. An annual report still means a huge amount to so many clients, even if they do interact online. Itâ??s a line in the sand, a chance to reset and re-evaluate. Once the RDR navel-gazing is through, platforms looking for genuine competitive advantage could do worse than decide to be famous for world-class, client-centric reporting that means something within the context of the advice process the client has gone through. And then we can retire our version of the portfolio screenshotÂ once and for all.