As part of our work with breakaway advisory teams, we help coordinate the various RIA systems needed for advisors moving to Independence.  We work with the selected technology providers to design an integrated workflow of all systems that cater to the team’s particular clients and services provided.  Once their custodian has been selected, the first piece to this systems integration puzzle is selecting their performance reporting/portfolio management/accounting provider.  This is the next logical key decision to make as their client data will flow from the custodian into their reporting provider, and then into other select systems (i.e. trading/rebalancing, CRM, financial planning, client portal, etc. – see below).

Unfortunately, most breakaway advisors get caught up in the endless possibilities this new technology will be able to provide to their clients and firm, and are under the false impression that they need their reporting provider up and running right away; that they will need to show their clients that their new performance reports are able to display the same detail they have become accustomed to, with even more functionality and customization.  What they fail to appreciate is there are much more important tasks at hand immediately following the launch of their RIA than replicating performance reports.

Instead of getting distracted by the exciting reporting capabilities they will now be able to offer, advisors should focus on communicating with clients throughout the transition process as their operations team gathers the necessary client information required to open and transfer accounts.  If advisors are enthusiastic about showing off their new technology, it might be best to work with their performance reporting vendor’s implementation manager to create the ideal report template – or perhaps a few iterations of a template – to offer an example to clients what their future reports will look like.

The major RIA custodians provide an advisor portal for the advisors to log into, and that is what advisors should first become familiar with as this dashboard will properly show updated accounts and positions immediately following the launch of their RIA.  While the majority of their team focuses on the transition of clients to their new RIA, the advisors should appoint a Power User of their reporting provider’s system.  This will take up nearly all of this person’s time as they will be the liaison with the reporting provider’s implementation team and will become the expert in this technology and its potential capabilities for the new firm.  During the client transition, the Power User should work closely with the reporting provider and custodian to begin coordinating data integration points between the two systems so that client account data appropriately flows from the custodian into the reporting provider.  Regardless of the reporting provider selected, we always recommend RIAs appoint a full-time employee dedicated solely to managing performance reporting.

It is only once the setup of the tool is near complete (approximately 2-3 months after an RIA has launched) that the advisors and the rest of the RIA team will be able to begin learning and training on the system.  It is at this point they’ll be able to provide their preferences regarding client reports, client portal nuances, and various advisor views, allowing the Power User to further customize their performance reporting tool.

Regardless of which system an advisor selects, whether it is sold as an out-of-the-box solution or as a so-customizable-there-are-countless-options-available solution, there will be some level of input required to manipulate the technology’s capabilities to best serve the team’s needs.  There will likely be different householding and hierarchy views that need to be built out.  There will certainly be billing rates, fee schedules and rules available through the reporting provider that will need the RIA’s involvement.  And the reports themselves will need to be built, tested, and further amended before they are ready to be fully generated and delivered to clients.

Breaking away from a constricting environment and building an RIA is an exciting endeavor, especially considering the new technology advisors can leverage to service their clients.  But breakaway advisors should remain focused on interacting with clients during the transition process to ensure their confidence rather than rushing the progression of their new performance reporting system.  With patience and a dedicated Power User available to build out the tool’s functionality the right way, a robust reporting tool will be ready in due time.


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