When the SEC auditors come knocking, they usually require lengthy, detailed information about your business. One of my managers received a 13-page document specifying the information he had to gather — for a “limited scope examination.” Fortunately, PortfolioCenter can help — assuming you keep your PortfolioCenter database complete and accurate, and you have the right Smart Sets.
For example, the list below is question 5 (out of the 18). I’ve matched the information requested with a possible [field] in PortfolioCenter. Once your PortfolioCenter fields are accurate, modify the Portfolio Export in the Export Wizard to include the right fields in the right order.
- The client’s account number, name and current balance as of date; — [Account Number], [Description], [Market Value]
- The value of each client’s account that was used for purposes of calculating its advisory fee for the most recent billing period; — [Market Value]
- The type of account (e.g. individual, defined benefit retirement plan, registered fund or unregistered fund); — [Account Type]
- Whether or not the Adviser has discretionary authority; — [Discretionary Account]
- Whether this is a wrap account;-
- The account’s portfolio manager(s); — [Advisor Name]
- The account’s custodian and location; — [Broker], [Custodian]
- Whether or not the custodian sends periodic statements directly to the client;
- Whether the Adviser, an officer, an employee, or an affiliate acts as trustee, co-trustee, or successor trustee or has full power of attorney for the account, and if so identify the individual granted these powers
- Whether Adviser or related persons are deemed to have custody of, possession of or access to the client’s assets. If so, identify the person with access and the location of the assets;
- The investment strategy (e.g. global equity, high yield, aggressive growth, long-short or statistical arbitrage); — [Model] or [Objective]
- Whether the client is a related person, affiliated person, or a proprietary account;
- Whether the client pays a performance fee and the most recent account performance; — [Billing Spec]
- Whether or not advisory fees are paid directly from the client’s custodial account; — [Billing Form]
- For clients obtained during the Review period, provide account inception date and name(s) of consultant(s) if any, responsible for referring the client to the Adviser. — [Inception Date]
For items that are the same for all or most accounts– like E, H, J, M — manually add a column to Excel after the export and copy the data all the way down.
For L, larger firms with many employees and/or family accounts should consider creating a Custom Field called something like “EO” or “Employees and Owners”. Smaller firms could manually add this data after the export.
For M, N, name your Billing Specs and Billing Forms appropriately and export these fields. If, like most managers, you bill on the client household group, you’ll probably need to run a separate export on your billing set to retrieve this information.
PortfolioCenter® by Schwab Performance Technologies is a Windows®-based data management and reporting software application.