The Financial Reporting

Our financial reporting provides the basis for you and the Family Council to take strategic decisions.

Issues often Encountered

Multiple risk profiles: Each asset manager applies his own risk assessments, sometimes resulting in the same client having different risk profiles
Generalization: The asset managers all have “global” discretionary mandates where they provide asset management without taking advantage of their specialization

Misalignment: Initially agreed-upon benchmarks, bandwidths, and risk profiles (if at all defined) are not relevant to today’s mandate anymore
High expenses: Clients overpay for services
Lack of clarity: Clients do not have a clear overview of their assets

What the Financial Reporting does

Financial Reporting ultimately helps clients align their intentions better with the asset management process and other Family Office Services. It also helps asset managers to perform better at a given level of risk. In combination with a Family Council, the Financial Reporting provides an in-depth view of the financial transactions and asset management process so the asset managers can be aligned with the strategic financial intentions and needs of the family.

Performance

Performance against a benchmark
Performance indicators
Relative performance against benchmarks
Performance attribution
…and many more

Risk

Risk indicators
Duration risk
Leverage
Bandwidths
Risk budgets
Value at Risk
Diversification
…and many more

Execution

Fees
Activity levels
Active vs Passive Investments
Own products
…and many more

The Advantages of the Financial Reporting

Clarity

The Financial Reporting provides you with a succinct and consolidated overview of your assets and liabilities
Activity levels of the asset managers
The Financial Reporting allows for a more coordinated and institutional approach to setting benchmarks and devising investment policy statements
The Financial Reporting allows for an alignment of the investment strategy with the family’s values and strategic plans

Transparency

The performance of multiple asset managers becomes transparent, and a proper apples-to-apples comparison can be done
The Financial Reporting provides a mechanism to ensure that all asset managers involved conduct their mandate in the best interest of the wealth owner and according to agreed-upon conditions and parameters
The Financial Reporting provides a basis for both the wealth owner and the asset managers involved to voice ideas and concerns. Reporting is similar to a sounding board
Financial Reporting provides the wealth owner with means to gain a greater insight into the specific investment decisions taken by the asset managers

Optimization

The transparent comparison of asset managers allows for underperforming asset managers to be replaced by better-performing asset managers
The consolidated reporting allows for better coordination of the asset managers’ activities and allows for each asset manager to operate in his area of expertise
Financial Reporting allows for the allocation of risk budgets and measures how much of the risk budget is used by the asset managers. This, in turn, allows asset managers to stay close – but not above – their risk budget, and thereby increase their performance
The Financial Reporting allows for a mechanism to set up a more efficient treasury

Independence

You are no longer reliant on reporting provided by the asset managers. You have independent reporting available to you which provides a level playing field for all the asset managers involved
The Financial Reporting allows the wealth owner to become more strategic in his asset allocation
The Financial Reporting allows the wealth owner to spend less time chasing up asset managers and provides the wealth owner with a mechanism to put the generation of passive income on autopilot

Questions we often encounter

How does a Financial Reporting improve performance and risk metrics?Rebeka Kulcsar-Kurdi2022-07-04T11:18:19+02:00

How does a Financial Reporting improve performance and risk metrics?

Firstly, the metrics are improved through a (re-)alignment with the Investment Policy Statement. Secondly, through continuous improvements developed together with the asset managers, the metrics can be improved incrementally. This can only be achieved with a granular insight into the asset management process.

Is the reporting of the asset manager not enough?Rebeka Kulcsar-Kurdi2022-07-04T11:18:19+02:00

Is the reporting of the asset manager not enough?

No; the reporting of the asset manager is usually merely a valuation statement with a couple of metrics added. The Financial Reporting we provide adds check points, akin to audit points, where we test the asset managers’ handling of the asset management process.

When do I need to have a Financial Reporting?Rebeka Kulcsar-Kurdi2022-07-04T11:18:19+02:00

When do I need to have a Financial Reporting?

If you have several discretionary asset managers in place and you want to ensure that they work each in their area of expertise you need to coordinate their activities. Without the Financial Reporting you will not definitively know which asset managers outperform and which asset managers take on too much risk.

Contact us

The most difficult thing is often making the first step. Start a conversation with us and let us together see how your aims align with our Family Office Services.

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