What is Consolidated Reporting?

Consolidated reporting refers to the process of aggregating and presenting various investments in a unified and comprehensive way. The goal of consolidated reporting is to provide stakeholders with a clear and holistic view of an entire investment portfolio, regardless of where those assets are held or what type of investments they represent.

Imagine you’re an investor with a diversified portfolio including stocks, bonds, real estate, and private equity. All held in various ways between multiple brokerage accounts. To make informed decisions, you’ll need a consolidated view of your entire portfolio. This is easier said than done. Because doing so requires bringing in data from multiple sources then comparing various investments on consistent terms with relevant benchmarks. Including historical information for the best results.

Before we begin, let’s put your financial knowledge to the test. Try out our free financial literacy quiz and see how you stack up!

Main Features of Consolidated Reporting:

1. Data Aggregation: Gathering financial data from all the different sources where investments are held is part of the process of consolidated reporting. This includes brokerage accounts, bank accounts, real estate holdings, private equity investments, hedge funds, and any other assets or investments.
2. Integration: Technology solutions and software integrate the data from these disparate sources into a single reporting system or platform, connecting to various financial institutions and consolidating the data automatically.
3. Accounting for Various Asset Classes: Diversified portfolios have diverse investments that include stocks, bonds, real estate, private equity, alternative investments, and more. Good reporting accounts for different asset classes and evaluates them based on relevant investment goals.
4. Performance Tracking: Consolidated reporting should also track the performance of each asset class and investment within the portfolio. This includes calculating returns, gains, losses, and income generated by each investment compared to relevant benchmarks.
5. Risk Assessment: The reporting system may also include tools for assessing the risk profile of the entire portfolio. This can help the individual understand the level of risk they are exposed to and whether it aligns with their financial goals and risk tolerance.
6. Tax Reporting: In addition to financial performance, consolidated reporting may include tax-related information. This can help the portfolio and their advisors optimize tax strategies and ensure compliance with tax regulations.
7. Customization: Consolidated reporting should be customizable to each stakeholder’s preferences. It may allow them to view data in various formats, generate customized reports, and set performance benchmarks or financial goals. For example, an accountant may be more concerned with tax reporting. Whereas an investment committee member may be more concerned with performance reporting.
8. Security and Privacy: Given the sensitive nature of financial data, robust security measures should be in place to protect the confidentiality and privacy of information.

If you are in need of an investment strategy, try out our free investment policy generator for some personalized guidance!

Consolidated Reporting Implementation

Implementation and management of a good consolidated reporting system is critical to investing success. Doing this requires an experienced partner. Our family office can implement a variety of consolidated reporting systems. We work with service providers such as Addepar, but can also build simple systems using common software like Excel, PowerBI, and Tableau. Contact us for more details.

If you have any questions about consolidated reporting, contact us or fill out this free assessment questionnaire to determine if our family office services can help you efficiently manage your wealth!

Don’t forget to subscribe to our free newsletter for valuable insights delivered monthly.