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Achieving Compliance in Wealth Management: The Role of Standardized Reports

In the wealth management industry, compliance is not just a regulatory requirement; it is the cornerstone of trust and credibility. With the increasing complexity of financial regulations, the demand for robust compliance tools has never been higher. Wealth management firms must navigate a labyrinth of rules and standards to protect their clients’ interests and maintain their reputation. This is where standardized reports across their firm or practice become indispensable, offering a reliable way to meet compliance demands efficiently and confidently.

Understanding Compliance Requirements

Regulatory Landscape

The regulatory landscape in wealth management is constantly evolving, with new regulations and updates regularly introduced to address emerging risks and challenges. Key regulations include the Dodd-Frank Act, the Investment Advisers Act of 1940, and the Financial Industry Regulatory Authority (FINRA) rules. Recent changes, such as the updated fiduciary rule, emphasize the need for transparency and accountability in client dealings. Non-compliance with these regulations can result in severe penalties, including fines, reputational damage, and even the revocation of licenses.

A significant update in this landscape is the SEC Marketing Rule, which came into effect in December 2020. This rule modernizes the regulations governing investment advisers’ advertisements and client communications, replacing the old advertising and cash solicitation rules. The SEC Marketing Rule introduces several critical requirements that advisors and wealth management professionals must adhere to:

Definition of Advertisement: The rule expands the definition of an advertisement to include any direct or indirect communication an adviser makes to more than one person, or any communication to a single person if it offers investment advisory services.

Performance Reporting: Under the new rule, investment advisers must ensure that performance data presented in advertisements is not misleading. This includes using specific time periods for performance presentations and providing appropriate disclosures to avoid misleading implications.

Testimonials and Endorsements: The rule allows testimonials, endorsements, and third-party ratings in advertisements, provided that clear and prominent disclosures are made. These disclosures must include the nature of the relationship between the adviser and the person giving the testimonial, whether any compensation was provided, and any material conflicts of interest.

Prohibited Practices: The rule explicitly prohibits certain practices, such as including any untrue statement of material fact, omitting material facts necessary to make a statement not misleading, and including information that is otherwise materially misleading.

These changes significantly impact how wealth management professionals market their services and communicate with clients. The implications of non-compliance with the SEC Marketing Rule can be severe, ranging from regulatory fines to lasting damage to the firm’s reputation.

The Importance of Standardized Reporting

Standardized reports are vital in meeting regulatory requirements because they ensure documentation consistency, accuracy, and completeness. These reports can streamline the compliance process by providing clear and concise information that regulatory bodies require. Examples of compliance reports include transaction reports, account activity reports, and risk assessment summaries. To meet regulatory standards, each report must consist of specific elements such as timestamps, transaction details, and client information.

Learn how to navigate the SEC Marketing Rule with Dalbar.

Standardized reporting also plays a crucial role in adhering to the SEC Marketing Rule. For instance, when presenting performance data, a standardized report ensures that all required disclosures are consistently included, reducing the risk of non-compliance. Additionally, these reports and proposals can help document the use of testimonials and endorsements, ensuring that all necessary disclosures about relationships, compensation, and conflicts of interest are made.

Standardized Reports as Compliance Tools

Features of Effective Compliance-friendly Reports & Proposals

Effective compliance reports are characterized by their consistency, accuracy, and completeness. They are crucial in ensuring wealth management firms meet various regulatory requirements, including the SEC Marketing Rule. Here are the key features that make compliance reports effective:

Consistency: Uniform data presentation across all reports ensures adherence to regulatory standards and prevents misleading information, vital for compliance with the SEC Marketing Rule.

Accuracy: Accurate data is essential in compliance reporting. Reports must reflect precise and current information to meet regulatory standards and avoid the risk of providing false or misleading information. For example, under the SEC Marketing Rule, performance data must be accurate and accompanied by relevant disclosures to ensure it is not misleading.

Completeness: Comprehensive reports include all required information, such as performance data and necessary disclosures about testimonials and endorsements, ensuring no critical details are omitted.

Real-Time Data: Providing current data in reports ensures they are always up-to-date, essential for maintaining compliance with regulations. This is particularly important for compliance with the SEC Marketing Rule, where outdated performance data or disclosures can lead to compliance issues.

Traceability: Traceability in compliance reports means that every piece of information can be traced back to its source. This feature is essential for creating a comprehensive audit trail, which is invaluable during regulatory reviews or audits. Traceable reports ensure that all data, including performance figures and disclosures related to endorsements and testimonials, can be verified.

Detailed Disclosures: Reports should include detailed disclosures about relationships, compensation, conflicts of interest, performance, and definitions, which ensures transparency and compliance with the SEC Marketing Rule and builds trust with clients and regulatory bodies.

These features ensure that any reports or proposals created are robust, reliable, and aligned with regulatory demands, helping wealth management firms maintain compliance effectively.

YCharts’ Role in Compliant Report & Proposal Generation

YCharts offers a range of compliance-oriented features designed to help wealth management firms meet industry standards. One standout feature is BD-Approved Reports, which are pre-vetted to ensure they meet regulatory requirements. Additionally, YCharts supports compliance with the SEC Marketing Rule by ensuring performance data is net of fees and providing prompts to avoid inadvertently including gross performance. It also allows firms to create customized, compliant PDF reports, restricts user access to approved templates, and includes essential disclosures. Required performance timeframes (1, 5, 10 years, and since inception) are automatically included in reports.

Here are a few FINRA-reviewed sample reports available in YCharts.

The Dynamic Disclosures Module generates tailored, compliant content based on included securities and data and prevents misleading statements implying SEC approval. YCharts archives client-facing documents indefinitely, deleting them only after seven years of user inactivity. This comprehensive approach ensures that YCharts helps firms produce accurate, compliant, and clear reports, effectively meeting regulatory standards.

Implementing Standardized Reporting Solutions

Integration into Existing Systems

Integrating reporting tools like YCharts into existing systems is crucial for seamless compliance tracking and reporting. These tools can often be integrated with portfolio management systems, client relationship management (CRM) software, and other essential platforms used by wealth management firms. 

See YCharts’ Schwab Advisor Center® Integration in action.

YCharts offers portfolio holdings integrations with platforms like Orion, Black Diamond, Schwab Advisor Center®, Redtail, Addepar, Pershing, Vergle, and iRebal, allowing easy import of model or client portfolios. Additionally, YCharts enables firms to customize reports and visuals with their branding, logos, and colors to ensure a standardized approach across teams. This integration helps ensure that data flows smoothly between systems, reducing the risk of errors and making it easier to compile comprehensive proposals and reports.

Training and Adoption

For standardized reporting solutions to be effective, thorough staff training and compliance education are essential. Firms should invest in comprehensive programs covering everything from basic operations to advanced features, emphasizing the importance of understanding regulatory requirements. Highlighting the benefits of these tools, such as increased efficiency, reduced workload, and the ability to meet regulatory standards easily, can encourage adoption among compliance teams and advisors. Best practices include ongoing training sessions, user-friendly manuals, and continuous support to address any issues.

YCharts offers extensive training opportunities, including one-on-one meetings with its top-tier customer support team and YCharts University webinars, which are eligible for an hour of CE credit from the CFP Board. Additionally, firms can share the latest reports directly with their team, ensuring they have up-to-date materials for client interactions.

YCharts Success Stories

Burton Enright Welch

Burton Enright Welch (BEW) leveraged YCharts’ robust reporting tools to enhance their client communications and streamline their investment processes. By integrating YCharts into their workflow, BEW produced detailed, visually appealing reports that clearly communicated complex financial data to clients. This improvement in transparency and client understanding strengthened client relationships and boosted client confidence in their investment strategies, ultimately contributing to business growth and client retention.

Vantage Point Management

Vantage Point Management utilized YCharts to improve their portfolio analysis and reporting capabilities. The seamless integration with their existing systems allowed for efficient data management and customized reports tailored to their clients’ needs. This led to more informed investment decisions and better client service. The enhanced reporting capabilities provided by YCharts played a crucial role in demonstrating the firm’s value to clients, which helped attract new clients and expand their business.

Cetera Investors

Cetera Investors adopted YCharts to standardize their reporting processes across various branches and advisors. YCharts enabled Cetera to create consistent, compliant, and branded reports that met regulatory requirements while maintaining a professional appearance. The ease of generating comprehensive reports helped advisors spend more time focusing on client relationships and less on administrative tasks. This efficiency, combined with improved client presentations, helped Cetera Investors enhance their service quality and achieve significant business growth.

Ensuring Compliance and Client Trust with Standardized Reporting Solutions

In the dynamic world of wealth management, achieving compliance is a continual challenge requiring effective tools and strategies. Standardized reports are essential for meeting regulatory requirements and maintaining client trust. Solutions like YCharts provide customizable, compliance-friendly proposals and reports that streamline reporting processes and enhance regulatory adherence. We encourage readers to review their current compliance processes and consider leveraging YCharts to stay ahead in an increasingly regulated industry.

Whenever you’re ready, there are 3 ways YCharts can help you:

1. Curious about how YCharts can streamline your client reports?

Send us an email at or call (866) 965-7552. You’ll be directly in touch with one of our Chicago-based team members.

2. Want to test out YCharts for free?

Start a no-risk 7-Day Free Trial.

3. Download a copy of YCharts’ 2024 Advisor-Client Communication Survey:


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