How often should you send performance reports to your clients? The majority of my managers send PortfolioCenter performance reports quarterly.
However, new managers are often tempted to use rolling quarters. Sending performance reports to a portion of your client list each month — along with your invoice — definitely improves your cash flow. When you’re starting a new business, monthly income shines much more brightly than quarterly income. Resist the temptation.
Rolling quarters brings in the same number of dollars but requires 3 times the work. And that is time you need to spend elsewhere. The sage who said “work expands to fill the time allotted to it” must have been an early RIA who used rolling quarters!
I have worked with a few managers who used rolling quarters for their performance reports. All of them transitioned back to standard quarters in the end. Here’s what we learned:
- Rolling quarters require the added chore of keeping track of which clients are on which reporting cycle. You’d be surprised how easy it is to get confused and miss someone.
- Rolling quarters add the problem of figuring out where to place new clients. (Do they start in the cycle 1,2, or 3 months after they join? Or should you space them so each cycle has approximately the same number of clients?)
- Generating, proofing and distributing performance reports carries a certain amount of fixed overhead regardless of the number of reports generated. With rolling quarters, you experience that overhead 12 times instead of 4.
- Clients tend to think in standard quarters dates (3/31, 6/30, 9/30, 12/31). Frequently, the clients who did not receive performance reports on standard quarters requested reports anyway, requiring extra time.
- Rolling quarters never give you a break from reporting. As soon as one cycle finishes, the next one starts. As a result, other work gets pushed to the margins and you have less time for the more enjoyable aspects of your job like managing the investments and meeting with clients and prospects.
Of course you could really save yourself time and outsource the whole process.