To analyze portfolio performance there are three main solutions at the disposal of the wealth manager: bank statements, Excel and bespoke IT systems. To set the scene for Portfolio Navigator here are briefly some pros and cons of each:
Bank Statements
Low cost and accurate with little to no input needed from the wealth manager to produce such reports. But producing a global overview of wealth when assets are booked across numerous banks is difficult and typical bank reports tend to be snapshots in time with little information provided in terms of income produced, etc.
Excel
Excel spreadsheets start their life in great shape. The various portfolios under management can be represented in an attractive way with live market data links ensuring the portfolios are marked to market correctly. Furthermore, the wealth manager has complete freedom designing the various reports. But problems arise soon after once income starts being generated, for example when accrued interest is converted into realized income in the form of coupons received or when positions are sold to be replaced by new ones. Keeping track of such typical transactions becomes increasingly more haphazard with time.
Bespoke IT Systems
As the heading implies, there are a couple of well established systems which can be purchased and should do the job of producing decent consolidated reports. These present a couple of risks though: firstly, they are very expensive which can be unwelcome, especially for a fledgling asset management firm or individual investors, and secondly, what you see is what you get. The latter point implying that the wealth manager needs to be quite sure the system delivers the required services prior to committing to a substantial expenditure.
Portfolio Navigator by Landax Solutions overcomes all of the cons identified above while sacrificing very few, if any, of the pros. The fundamental data core is based on accounting principles incorporating both a Balance Sheet and an Income Statement. As mentioned above, generating a portfolio snapshot (the balance sheet) is relatively straight forward (banks and Excel do mainly this) but doing so for any day in the past and producing an income statement for any desired time period at the click of a button is far more complex. By storing data in a highly granular way within an enterprise technology database, Portfolio Navigator achieves exactly all of this.
But so do bespoke IT systems. However, these systems tend to come with a hefty price tag and if they do not do what is required then it is unlikely they will do so in the near future, if ever. Portfolio Navigator, being powerful yet of a simple design can easily be upgraded to provide missing functionality. And in the worst case, all the data can be easily extracted in Excel format to enable the user to back out of the reporting arrangement.
The data stored by Portfolio Navigator can generate any desired report across any desired time period
This is achieved by setting up accounts for every kind of transaction which may occur within the portfolio, ranging from the clearly understood security transaction (buy or sell) to the less obvious FX mark to market of accrued interest generated by a bond position in a currency other than the reporting currency. Here is a very small subset of what the 'chart of accounts' looks like:
The chart of accounts can be inspected although this is not the area of the system where one would be well served figuring out how the portfolio is doing. But it is the reports which can be generated by the wealth manager which brings the data to life - as mentioned, any report can be generated across any time period:
