Better client reporting on investments is coming, says speaker at GIPS conference

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Better client reporting on investments is on the horizon, according to “The Future of Performance Measurement,” a Sept. 25 presentation by Stefan Illmer, head of client reporting for Credit Suisse, at the CFA Institute’s GIPS Standards Annual Conference in Boston.

There is “increasing pressure to provide analytics…from the client’s point of view” in addition to providing them for the portfolio manager. That translates into:

  • Providing the money-weighted rate of return, which is the client return, rather than simply the time-weighted rate of return
  • Using analytics to address where absolute profits are coming from in addition to analyzing returns vs. the benchmark; this is especially true for private clients

Illmer also foresees more reporting for clients’ total portfolios, incorporating clients’ externally held assets such as real estate, private equity, assets held with other custodians, and advisory accounts.

An audience member asked how firms can aggregate client portfolios for look-through given the 90-day delay in mutual funds reporting their holdings. Illmer replied that the data exists because it is used for daily net asset value calculations. He believes that pressure from clients may eventually win the release of this data.


For a related post, see “Financial crisis will change client reporting, according to Credit Suisse executive.”

_________________
Susan B. Weiner, CFA

Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.

Copyright 2008 by Susan B. Weiner All rights reserved

Financial crisis will change client reporting, according to Credit Suisse executive

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In response to my question about how the current financial crisis will impact performance measurement and reporting, Stefan Illmer, head of client reporting for Credit Suisse, said that the investment industry needs standards for client reporting. 

He said he wasn’t referring to performance reporting to clients, but to a broader array of topics such as valuation, pricing, transparency, and disclosures. 

For example, if a firm regularly runs return attribution software, it will immediately notice when a bond defaults because there will be no price for the bond. Of course, that assumes that the firm doesn’t let the portfolio manager define the price for the bond.

Illmer answered my question during the Q&A section of his Sept. 25 presentation on “The Future of Performance Measurement” at the CFA Institute’s GIPS Standards Annual Conference in Boston.
_________________
Susan B. Weiner, CFA

Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.

Copyright 2008 by Susan B. Weiner All rights reserved

Resources to help you cut through investment jargon

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Jargon is a barrier to your effective communication with clients. But sometimes it’s hard for you to think of a replacement for a term like “secular” that’s convenient shorthand for communication among investment professionals.

Google definitions can help 
You can always do a Google search to define terms that may derail your client. For example, inputting “define: credit default swap” will yield some definitions that you can paraphrase for your client’s benefit.

But sometimes a Google search doesn’t cut the mustard. 

For example, investment strategists often talk about secular trends. But “define: secular trend” yielded no definitions when I tried it recently. And “define: secular” spoke about the term only as the opposite of “religious.”

Online investment glossaries fill the gap 
Sometimes an investment glossary comes to the rescue.

Here’s what Investopedia says when I input “secular.” 

Sometimes it pays to go to investment glossaries.

Here are some options:

Your recommendation? 
What investment glossaries do YOU recommend?

Webcast: "What to Say to Clients Now"

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Investment News is running a webcast on “What to Say to Clients Now” on September 23.

Check it out, if you’d like to hear how others are talking to their clients about the craziness on Wall Street.


_________________
Susan B. Weiner, CFA

Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.

Copyright 2008 by Susan B. Weiner All rights reserved

Make your clients smile, while you stay safe from lawyers

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Making a client smile can bring your meeting one step closer to a successful result. 

So, consider licensing a cartoon about the economy or stock market. It’s easy to find them by searching CartoonBank.com, a collection from the New Yorker. 

Could you use the cartoon described by the following caption?

“I got out of tulips after the market collapsed, but I’m slowly getting back in. Especially pink ones.” 

Or, how about this one?

“Actually, ‘Monkey see, monkey do’ has served me quite well in this market.”

When you license cartoons for use in presentations, you keep yourself safe from charges of copyright infringement. Lawyers can’t come after you. That’s an added benefit. 

Have you used cartoons successfully in your presentations?

"Writing Effective E-Mail: Top 10 Tips"

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You can’t be an effective financial advisor, if you can’t communicate effectively via e-mail.

Your e-mail subject line is key. If you write a weak subject line, your client or colleague may ignore or even delete your message. Write a strong one, and you’re more likely to get the response you need.

“Writing Effective E-Mail: Top 10 Tips” by Dennis Jerz does a nice job of critiquing subject lines as he explains how to “write a meaningful subject line.”

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Susan B. Weiner, CFA
Investment Writing
Writing that’s an investment in your success

Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.

Get to the point quickly, or lose your web readers

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“Web content must be brief and get to the point quickly, because users are likely to be on a specific mission.”

I agree with this assertion by Jakob Nielsen, a guru of website usability, in “Writing Style for Print vs. Web.” 

Nielsen gives good pointers for web writing in “How Users Read on the Web.” 

If you don’t please your readers, your website will suffer from a high bounce rate. In other words, readers will quickly desert your website. In “Reduce Bounce Rates: Fight for the Second Click,” Nielsen suggests solutions. They boil down to providing links to relevant information on your website.
_________________
Susan B. Weiner, CFA
Investment Writing
Writing that’s an investment in your success

Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.

Add Bloomberg video to your blog

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Financial advisors, here’s a cool new widget that may appeal to your video-oriented clients.


Click on the “Get Widget” box to get the code for adding this to your blog or website. I discovered this widget on the Investment Postcards from Capetown blog.


_________________
Susan B. Weiner, CFA
Investment Writing

Writing that’s an investment in your success

Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.

Copyright 2008 by Susan B. Weiner All rights reserved

Vary your paragraph length like NYT columnist Floyd Norris

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It can be painful to read a page full of long sentences and longer paragraphs. That’s why, when I teach “How to Write Investment Commentary that People Will Read,” I suggest that people vary the length of their sentences and paragraphs.

New York Times columnist Floyd Norris illustrates this nicely in the print version of his article“No Profit Without Risk.”

In the print version, a two-line paragraph follows an eight-line paragraph and a 10-line paragraph. The contrast between two vs. eight and ten in the print version is starker than what you’ll see in the online article. By the way, the online article goes by a different title than the print version, so please don’t tell me I got his title wrong.

The short third paragraph comes as a relief. It gives the reader a chance to breathe. Plus, its shortness emphasizes the contrast between the content of the first two paragraphs and third.

In fact, Norris’ opening three paragraphs illustrate a classic article approach that goes like this:

People thought blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah

They were wrong.

So, think about mixing up your sentence and paragraph lengths the next time you write. Your readers will reward you by paying attention longer.

Morningstar’s new bond market commentary is an online "Don’t"

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Morningstar has introduced monthly bond market commentary. 

The August 2008 issue of Morningstar Bond Market Commentary has many nice features. But it also illustrates an important “Don’t” of online publishing.

The commentary is almost impossible to read online. Why? Because it’s formatted in three columns instead of one. 

The bottom line:If you want people to read your commentary online, format it in one column. Otherwise, you’ll lose many readers.

By the way, Morningstar says its bond commentary is designed to be printed out. A three-column layout works fine in hard copy.