The Link Between Client Engagement and Goal-Based Reporting

Published by Craig Wietz, President
March 18th, 2016

As a wealth manager, you face many obstacles in your search for new clients. Once you’ve found a client, it’s critical to do everything in your power to keep them. There are two main factors in client retention: showing competency and gaining the client’s trust. Establishing both competency and trust will deepen client–manager engagement, and you’ll be able to help your clients achieve their goals.

Understanding Client Goals

Being able to understand—and relate to—client goals will help you be more successful in managing their portfolio. You’ll also be better prepared to report on your activities in a more personalized way. Wise wealth managers understand that their clients have individual goals that are unique and varied. For instance, they may have goals in any—or all—of the following areas:

  • Retirement
  • Education
  • Travel
  • Family/health needs
  • Philanthropic/business desires

This should be the main topic of your initial client meetings. Understanding these specific goals will help guide your meeting preparations and tailor your conversations to each client’s unique requirements. Doing so deepens your engagement with the client, making you an integral part of their financial team. 

Does Goal-Based Reporting Replace Traditional Reporting Methods?

A goal-oriented approach informs every part of the client–manager relationship. Once you understand the client’s personal financial goals, you can build a financial plan that speaks to those goals. So, should you still be doing traditional reporting? Yes. Traditional reporting is still important here because you need to report on your overall performance in the market. You still need to establish yourself as the best advisor for your client’s investment needs.

You must show your performance against established market benchmarks, and against other peer indices and portfolios. This demonstrates your overall competence, and keeps you accountable as the financial steward for your clients.

Goal-Based Reporting as a Supplement to Traditional Reporting

Goal-based reporting is never meant to replace traditional reporting—it should be regarded as a supplemental asset.

In a traditional relationship, the conversation ends with reporting on the client’s portfolio performance against market benchmarks. With a goal-based approach, additional reporting speaks specifically to the client’s goals, and shows the portfolio performance against those specific personal goals. An example of a goal-based conversation might be something like this:

“This quarter we gained 2.6 percent toward the goal of investing in new real estate. We’re now 70 percent of the way to that goal and our investment choices are appropriate to let us meet that goal within the next five years. Let’s talk about our other goal of securing a sufficient retirement account.” 

This conversation should be accompanied by reporting that speaks directly to those goals. Using this two-sided approach to client reporting establishes both competence and trust. It also increases long-term engagement in the client–manager relationship.

The Problem of Scale

Using a goal-based, personalized reporting system appears very time-consuming. Doing it well requires custom reporting and preparation that go further than a typical client meeting. Gathering specific data often requires several sources, each with individual logins and data that come in any number of formats that take time to unravel.

Tailoring goal-centric reports to individual clients can take even more time, and client meetings can take longer too. As you gain a reputation for competent, trustworthy stewardship, your client base will grow by referral, and your time will be in greater demand. You still need to have meaningful, engaged interactions with your clients.

All of this leads to the problem of scale. How can I make this bigger? If I land just a few more clients, I’ll be spending all my time making these custom reports. Of course, some sort of automation is what’s needed here. Repetitive activities that take time each month, or each quarter, are easily automated, freeing you to grow your business and deepen relationships.

A Digital Portal for Automating Reporting Processes

First Rate developed a next-generation data-driven goal-based reporting tool that delivers accessibility to foundational information for goal-based analysis in the area of progress to goal. First Rate’s Goal-Based Reporting communicates progress towards client goals in a manner that makes sense to them – a practical and easy way to show clients where they have been, their current status and the changes needed to meet their unique financial objectives. Wealth managers define the growth goals needed for each client as opposed to measuring solely again a market index. This tool provides insight and clear pictures that facilitate discussion around wealth accumulation and spending strategies.

 First Rate’s goal-based reporting tool exists under the CORE solution. CORE is a holistic web-based console designed specifically to meet the complex reporting demands of your individual clients. It features a full suite of seamless wealth management applications that automate the repetitive activities involved in financial reporting that can limit productivity and hinder your ability to add new clients.

CORE features:

  • Automatically performs the load processes, calculates performance returns and executes sophisticated, systematic audits as frequently as your accounting data is received
  • Calculates daily, point-to-point, periodic time-weighted and money-weighted rates of return that satisfy GIPS® rules
  • A scalable architecture that supports both domestic and multi-currency reporting with proprietary technology that can meet the processing requirements for any size of organization
  • Helps firms create transparency around the clients unique investment story – goal based reporting

The CORE solution will free up time by automating your performance data collection needs, and by allowing you to design dynamic, engaging client-facing reporting that is goal specific. You’ll have more time to meet with existing clients and to recruit new clients.

At First Rate, we believe that when you tell your story using a combination of superior digital tools like our goal based reporting application through the CORE solution and excellent one-on-one attention, clients are more engaged, and long-term relationships thrive.

 

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About the Author: Craig Wietz, President of First Rate, has been an integral part of the company since 1995. In this role, he oversees all the business lines, the functions that develop and maintain client relationships, as well as strategic planning and the groups responsible for internal operations. Prior to his current role, Wietz was responsible for the Service Bureau business line and has contributed strategic insights in statement processing, third party data aggregation, model portfolios and benchmark services for First Rate. Connect with Craig via LinkedIn.

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