Client Reporting: Is it Front, Middle, or Back Office?
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13 September 2012
In an upcoming report for wealth management, Celent will look at trends and vendors in the client reporting space for wealth management. During my research, I have found little consensus as to whether wealth managers or vendors consider client reporting as a front, middle, or back office process. Traditionally, client reporting has been considered part of the middle and back office, since the reports were merely pre-selected templates and the data used in reports was generated from accounting and performance measurement systems. However, with the advent of ad hoc report generation and increased desire for integration, client reporting tools are pushing into the front office. While the data and performance metrics are still generated from the middle/back office, increasingly advisors and relationship managers are equipped with tools that turn a quarterly or monthly performance report into another presentation and sales opportunity. Client reporting can now be automated and configured all the way down to the account level, and instead of generic corporate sales verbiage, users can embed product-specific or advisor-specific information. For example, an advisor may want to put in some managed account sales verbiage for a group of end-clients he believes have the appropriate wealth levels to make use of the product; or fixed income teams may want to include the latest on municipal bonds. Furthermore, advisors can now generate ad hoc online reports with interactive functionality and share these reports during advisor-client presentations. Lastly, client reporting tools now commonly include self-directed functionality, giving end clients access to PDF or even dynamic reports through a client portal. Of course, obtaining the data and ensuring its accuracy are vital to the process (after all, a report is only useful if it's accurate), and are middle/back office functionalities, and so vendors must strike a balance between investing resources in developing slick reports with front office functionality with ensuring that they have multiple data feeds and data enrichment layers. So does it matter where we consider client reporting to be? Absolutely. Not only will this consideration influence organizational processes and staffing, but determining the purpose of the client report (is it just a statement sent to clients quarterly done merely to satisfy compliance and transparency rules, or is it a conversation-starter for products and services?) will influence the budgets of wealth managers looking to find "sizzle on the steak", and will impact advisor focus and workflows.