A portfolio spread across multiple banks and managers is a portfolio that is difficult to read. Each institution produces its own statements, in its own format, with its own performance calculation conventions. The sum of these documents does not constitute a coherent wealth picture — it constitutes an accumulation of partial views. Consolidated reporting is the answer to this problem.
What is consolidated reporting?
Consolidated reporting is a document — or a set of documents produced at regular intervals — that aggregates all positions in an estate, regardless of their location or custodian. It makes it possible to answer simple but fundamental questions: what is the overall performance of my portfolio this quarter? What is my actual exposure to Swiss equities? How much have I paid in management fees across all banks combined?
Quality reporting covers at minimum:
- Overall valuation: total asset value in the reference currency, with detail by institution, asset class and currency.
- Strategic allocation: distribution between equities, bonds, real estate, alternative assets, cash — and deviation from the target allocation if one is defined.
- Performance: return for the period, year to date, over one year and over several years.
- Fees: management fees, transaction costs, custody fees, retrocessions received by managers — all aggregated.
- Liquidity and flows: inflows and outflows, dividends, coupons, distributions.
TWR vs MWR: two ways to measure performance
Performance measurement is a technical topic that every family office client should understand, because the two main methods produce different results and measure different things.
Time-Weighted Return (TWR) measures the manager's performance, independently of capital flows. It is the method recommended by the CFA Institute under the GIPS standards for evaluating a manager: it neutralises the impact of contributions and withdrawals that the manager does not control. When comparing two managers, TWR is the relevant metric.
Money-Weighted Return (MWR), also called the internal rate of return (IRR), measures the investor's performance. It takes into account the timing of flows and reflects what you have actually earned on your capital. If you invested a significant sum just before a downturn, your MWR will be lower than the manager's TWR.
The practical rule: use TWR to evaluate your managers, MWR to measure the actual growth of your wealth.
Ridger
ContextualCTA.Title
ContextualCTA.Description
Fee transparency: an underestimated issue
The cumulative impact of fees on long-term performance is considerable and often poorly appreciated. A 0.5% differential in annual fees over 20 years represents a total performance difference of around 10% for a classic diversified portfolio.
Quality consolidated reporting breaks fees down into several layers:
- Custody fees: charged by the bank for holding securities.
- Transaction costs: commissions on purchases and sales.
- Management fees: the manager's fees (often a percentage of assets under management).
- Fund fees: TER (Total Expense Ratio) of funds or ETFs in the portfolio.
- Foreign exchange fees: spreads applied on transactions in other currencies.
In Switzerland, the FinSA regulation imposes greater transparency on retrocessions. A consolidated report produced by an independent family office makes it possible to verify that the information received from each institution is consistent and complete.
Frequency and format
The optimal frequency depends on the complexity of the estate and the family's preferences. Common practice is a monthly valuation report, a quarterly performance and allocation report, and a comprehensive annual report including fees and a strategic review.
The ideal format is concise but complete: an executive summary page, followed by detailed annexes by institution or asset class. Modern tools also allow real-time access via a secure interface — a digital wealth vault.
Ridger produces consolidated reports for its clients to the most demanding market standards. To find out more, we invite you to a confidential conversation.