When it comes to performance reporting, I’m reminded of those vision tests in the eye doctor’s office where you have to put your hand over one eye. You’ve only got half your vision, which is precisely the case when advisors report on managed account performance but not on retirement assets. An important part of the picture is “dark,” and no matter how well you report the managed assets, the overall view is incomplete.
I don’t get it. If my target for my investments is 8%–with a 5% target for my retirement assets—I need to know if my retirement assets are achieving only a 3% return. It’s critical that I know my retirement asset performance relative to benchmarks. And yet, in spite of how important it is to report on retirement accounts, it’s often not done.
The long-standing reason, of course, is that many advisors have found that reporting on the performance of their clients’ retirement assets requires too much manual data entry. Furthermore, it’s often difficult for advisors to know what to charge for these services.