Deciding which PortfolioCenter reports to send to clients does not seem to be a settled question, especially as Schwab Performance Technologies regularly adds options with the Presentation Studio reports.
While choosing which PortfolioCenter reports to send is highly personal and varies widely between mangers, here are some trends I’ve noticed.
Managers are sending less, not more.
Most clients want the reports to answer only one question: “overall, did I make money or lose money?”
In response, I see managers reducing the variety of reports they send in favor of presenting a single overall number by which clients can judge their performance and put their fears to rest. Managers have shifted from reporting “what happened in the last three months” to “here’s the progress to your long-term goals.” Typically this means:
- sending one performance report that highlights long-term (3 years+) Time-Weighted Return.
- shifting the shortest time period on a performance report from a quarter to year-to-date.
- dropping sector performance reports because “large cap value” and “small cap growth”, etc mean nothing to most clients.
- dropping holdings reports or performance reports which list each position because these reports invite questions along the lines of “why did you buy that?” or “why didn’t you sell that?” and shift the focus away from overall performance.
- sending one overall performance report that focuses on long-term growth.
Specifically, new managers often start with the Portfolio Performance Review. When they have over three years of data, they frequently switch to the Comparative Performance Review or the Overview Landscape in the Presentation Studio.
One note, when selecting a long-term performance report, be careful which format you choose. You don’t want clients to faint from “sticker shock” when they see management fees since inception.