Client reporting, valuations and data
What this domain tests
What a platform must report to clients and when, how performance is measured, and how data quality and data protection underpin reporting.
Reporting obligations
- Online valuations are usually available daily; formal periodic statements are required at least annually for MiFID business, and more often on request or for complex products.
- Annual tax documentation: consolidated tax certificate, capital gains report, and ISA and pension reporting to HMRC.
- Contract notes per transaction.
- Cost disclosure: ex-ante before the sale and ex-post annually, aggregated across platform, product and advice, expressed in both percentage and monetary terms.
Performance measurement
- Time-weighted return removes the effect of client cash flows and measures the investment strategy's performance.
- Money-weighted return (internal rate of return) reflects the client's actual experience, including the timing of contributions and withdrawals.
- Benchmarking against an appropriate index or peer group, plus Consumer Duty outcomes monitoring, is expected.
Data quality and protection
- UK GDPR governs subject access, accuracy, retention and lawful processing.
- Data quality drives fee calculation, tax reporting and CASS reconciliations; a valuation error cascades into every downstream report.
- Cyber and third-party data controls fall under SYSC and operational resilience expectations.
Worked example
A client complains her valuation shows 6% growth while her own arithmetic shows 3%. The platform reports time-weighted return; she made a large contribution immediately before a market fall, which drags her personal money-weighted return down. Both figures are correct for their purpose. Reason: the firm should explain the methodology and publish both measures rather than simply restating the number.
Traps that cost marks
- Confusing time-weighted and money-weighted returns.
- Treating the annual valuation statement as a tax document - the consolidated tax certificate is separate.
- Disclosing costs only as percentages when monetary amounts are also required.
- Assuming data accuracy is purely an IT issue rather than a regulatory one.