Keeping Score: Why Measure Investment Performance?
Answer: Because you have a compelling responsibility to help your
investors achieve their financial
goals. In order to do this, they or their brokers/advisors
need to know both sides of the equation...
- ...the "expected return" needed to achieve their financial goals
- ...the "actual personal return" they have achieved with their investments
If your investors can't keep score of their actual return, they may never know if
they're on track for achieving their goals. As a financial institution, plan administrator,
service provider or recordkeeper, you're aware of the importance of instilling sound
investment principles and a long-term approach. And while your more savvy investors
may have an idea as to their "expected return," they likely do not know their actual
personal rate of return. Considering the importance of feedback in achieving one's
financial goals, it's worth it to measure and help them track their own personal
performance.
Even if you do calculate and display a static personal rate of return, consider
offering superior investment performance reporting through EnterpriseROR. The simplest,
yet most subtle of dailyVest's
performance presentations is a static personal rate of return for a specific
period (see table above). However, for little additional cost why not offer engaging and relevant information which keeps your investors coming back?
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