I know a lot of advisers go to a good bit of trouble trying to create really impressive reports to give to clients at their annual review meeting. Having seen many different outputs that are given to clients, they vary widely from dull and ineffective reports right through to excellent quality and engaging documents.
So let’s get the poor quality ones out of the way first. They typically only contain,
- An update on policy values / premiums etc. that has been downloaded from a CRM / policy data system.
- A stock few pages on the economic environment / market update.
While both of the above are important, they won’t engage anyone on their own. There typically is little or no commentary that really connects the data with the client’s plan. The result is likely to leave the client underwhelmed and not feeling that a lot of expert analysis has gone into the development of a truly personalised report for them.
So what does a good report look like? I think it includes some / all of the following sections,
- Executive Summary: Some people will read every word in the report, others won’t give it the time but want to be able to quickly digest the really important points.
- Review of performance measures: This is a statement that shows changes in the likes of
- Net worth
- Investment portfolio increase
- Pension portfolio increase
- Protection premiums saved
- Effective tax rate
- Review of 12-month activity: What was carried out in the past 12 months, and how these actions were aligned with the financial plan.
- Progress towards financial plan outcomes: There are any number of ways of presenting this information. Some advisers prefer a brief written update, others use a dashboard / traffic light system with commentary on the key points. The underlying assumptions used can also be included here or otherwise in the Appendix.
- Objectives and actions for the next 12 months: This section highlights changes as needed to the existing plan. It also captures product / portfolio changes that are required and any money management / behavioural recommendations.
The above should form the main part of the report. However, an Appendix is really important too, as the likes of relevant cashflow graphs and a revised client balance sheet (with a greater level of detail than in the main report) will also add value.
So, that’s the required content identified, the next step is to make it engaging. Here are a few tips to help you.
- Don’t cram in the information: Keep it easy to read, let the content breathe. Spread it out into bite-sized chunks. A page with too much text and figures is very daunting for the average reader.
- Be succinct: Don’t view this as your opportunity to impress, instead it’s your chance to inform. Your client already trusts that you know your stuff, you don’t have to demonstrate your knowledge at every turn. Less is often more when it comes to reports.
- Avoid jargon: Similar to the previous point, you want your client to understand the report rather than leave them feeling a little dim-witted financially.
- Make graphs easy: Any graphs or charts used need to be intelligible in seconds. If the client has to spend time trying to work it out, the likelihood is they probably won’t bother.
- Don’t fudge the message: If your recommendation includes that the client needs to save more / spend less / stop changing course with their investments, spell this out very clearly. It’s for their own good!
Excellent annual reports add a lot of value to clients. They also commit them to the plan for the coming year and keep them engaged with the valuable advice you are providing. This in turn enables you to easily justify your ongoing remuneration. The client wins and you win.