What a small RIA's quarterly client report should include (and what to leave out)
A useful quarterly client report from a small RIA fits on a few pages: account values and changes, performance shown time-weighted for the period and longer periods against the model's stated benchmark, allocation against target, fees deducted, and any changes to strategy or the IPS. Label every number with its period and method, keep the language plain, and keep a copy of exactly what each client received.
Most clients spend about two minutes with a quarterly report. They look at the value, whether it went up, and whether anything needs their attention. Everything else is either for the advisor's benefit or for the file. A good report gives the client those two minutes and gives the file an accurate, dated record.
Which sections earn their place?
| Section | What it shows |
|---|---|
| Values | Start and end value for each account and the household, with deposits and withdrawals |
| Performance | Time-weighted return for the quarter, year to date and since inception, against the stated benchmark |
| Allocation | Current allocation against the model's target |
| Fees | Advisory fee deducted for the period |
| Changes | Any change to strategy, model version or IPS, with the date |
| Next steps | Anything the client needs to do, and the next review date |
How do you show performance fairly?
- Label each return with its period and whether it's before or after fees.
- Use the benchmark written into the model and IPS for that period.
- Say which method you used: time-weighted, money-weighted, or both.
- Don't pick flattering periods; show the same periods every quarter.
What should you leave out?
- Pages of holdings detail the custodian statement already covers.
- Market commentary nobody asked for.
- Charts without labels, or with a different benchmark each quarter.
- Anything you couldn't reproduce from your records later.
A worked example
Take a hypothetical two-person RIA that cut its report from 14 pages to four. Page one: household value, change and the next review date. Page two: time-weighted returns for the quarter, year to date and since inception against each model's benchmark, after fees, labelled as such. Page three: allocation against target and the fee deducted. Page four: changes this quarter, such as "Growth model moved to version 4 on 1 April". Each report is saved to the client's record on the day it's sent.
What are the common gaps?
- A benchmark in the report that differs from the one in the IPS.
- Returns with no period or method stated.
- No copy kept of what was actually sent.
- A strategy change that never appears in any report.
When is this overkill?
If you meet every client each quarter and walk through the custodian statement, a short summary may be enough. If you send anything written, keep it accurate and keep a copy.
How Advorra fits
Advorra has portfolio analytics with time-weighted performance, allocation and concentration, benchmarks chosen per model from a catalog of 147 indices, and a dated strategy of record, so the numbers and the "what changed" section come from the same records. See the product page, or read about time-weighted vs money-weighted returns and benchmarks for model portfolios.
One thing to do this week: check last quarter's report against one client's IPS. Is the benchmark the same?
A practical guide, not legal or compliance advice. Figures and examples are illustrative.
Questions advisors ask
Does an RIA have to send quarterly reports?
The custodian sends account statements. A separate adviser report is common but not always required; check your advisory agreement and regulator. If you send one, keep it accurate and keep a copy.
Time-weighted or money-weighted?
Time-weighted is the fair way to compare a strategy with a benchmark. Some firms also show money-weighted so clients see how their own dollars did. Say which is which.
Which benchmark should the report use?
The one written into the model and the client's IPS for that period. Don't switch benchmarks between reports without saying so.
Should fees appear?
Yes. Showing the fee deducted for the period, and whether performance is shown before or after fees, avoids confusion.
Is this compliance advice?
No. It is a practical guide. Your compliance consultant can review your report template.
See it on a demo firm
Advorra is practice software for independent RIAs: clients, models, IPS, billing and compliance records in one place, on top of the custodian you already use. Built by The CollabHub.
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