Good quality client reporting is vital! As we move into a new era of transparency with MiFID II cost disclosure requirements, financial advisers, wealth managers and investment managers will need to continually demonstrate the value they provide for clients. A key question therefore is ‘can client reporting help to demonstrate value?’

Value is always difficult to quantify as clients have different and individual requirements and therefore different measures of value. Whilst client reporting can help to quantify the level of portfolio growth, volatility, underlying investments, how the portfolio has been managed in relation to market conditions etc. and how much the client has been charged, are there other measures of value rather than price vs. performance?

For clients investing in socially responsible portfolios, an important measure of value is likely to be the environmental and social impact that their investments are actually delivering. It’s all very well to be investing in funds which have been positioned as delivering positive impact but,

»How is positive measured?

»Can positive impact be demonstrated easily to the customer?

»Do the investments come with a sacrifice to performance?

The online calculator and report  available from EQ Investors responds to all three questions above in an interactive and highly engaging format.

The client or adviser can select the amount invested in one of the 7 impact portfolios from EQ Investors and the calculator then indicates the environmental and social impact which this investment has had.

As we have highlighted in previous articles, these investments are measured against the United Nations Sustainable Development Goals  and if you would like to know more this very short video is a great summary. The 2030 Agenda for Sustainable Development, adopted by all United Nations Member States in 2015, provides a shared blueprint for peace and prosperity for people and the planet, now and in the future. At its heart are the 17 sustainable Development Goals (SDGs) which are an urgent call for action by all countries- developed and developing – in a global partnership.

You can try the calculator online but as an example, £500,000 invested in the Adventurous portfolio demonstrates the impact which the investment would have delivered in 2017 based on the investments being used within the portfolios.

For clients, keen to ensure that their investments are making a difference, this is a great way of demonstrating the impact to clients.

One of the challenges thrown at impact investing is that it is at the expense of investment performance.

The reporting from EQ investors helps advisers and clients to understand to what extent, if any, this is true.

Not only can the client understand the impact their investments have had, they can also review whether performance has been sacrificed. The graphic below show how this is clearly presented with a comparison of the portfolio against ARC benchmarks on a cumulative basis and also year-on-year performance.

This example clearly demonstrates that investing in the EQ Investors Adventurous portfolio has not resulted in any sacrifice of performance against the benchmark.

Finally, the details of the portfolio can also be viewed and selecting this option will return a list of all the underlying investments with a high level summary of the fund, a fund overview and information about the manager and fund house. A detailed fund factsheet for the model portfolio  can also be downloaded which demonstrates the alignment with the 17 sustainable development goals.

For advisers who partner with Discretionary Fund Managers (DFM) to manage their clients’ investments, the availability of information about the proposition and good quality client reporting is vital particularly as there is no direct relationship between the DFM and the client. The suite of information available to advisers working with EQ Investors is excellent and for more information on the investment propositions available head over to their dedicated page on the Discus website.


This article was created for the DISCUS website by Damien Lardoux EQ Investors. You can find out more about EQ Investors and their discretionary investment services here ›