Why bank reports do not create a consolidated picture
Each bank presents a portfolio using its own asset classification, reporting currency and performance methodology. The same instrument may be treated as a bond, a structured product or an alternative investment, while fees may be reported only in part.
When a family assesses each provider in isolation, it cannot see aggregate concentration by issuer, currency, region or liquidity horizon. Decisions that appear reasonable locally may create unwanted risk in aggregate.
One investment policy statement
Comparison begins with family objectives, not a ranking of banks. An investment policy statement records the purpose of capital, acceptable risk, currencies of future spending, liquidity requirements and restrictions on particular instruments.
The document becomes one brief for banks and managers. Proposals can then be compared by how well they address the same mandate rather than by presentation quality or performance over a selected historical period.
What should be consolidated
Reporting should be detailed enough for decisions without becoming a data stream. The appropriate measures follow from the investment policy and the family’s asset structure.
- allocation by asset class, currency and geography;
- concentration by bank, manager, issuer and counterparty;
- performance after all fees in a comparable currency;
- volatility, drawdown and other agreed risk measures;
- available liquidity and the family’s future commitments;
- limit breaches and decisions requiring attention.
The role of a multi-family office
SGC does not make investment decisions for the family or perform the functions of a licensed asset manager. We help define criteria, make provider data comparable, organise the decision process and follow up on agreed actions.
This oversight reduces information asymmetry: the family retains its chosen banks and managers while gaining its own frame of reference and decision history.