Measure Twice, Cut Once: Effective Tailored Shareholder Report Design

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View our recorded webinar (8/2/23):

Are Your Systems Ready? 6 Questions to Answer About Implementing the Tailored Shareholder Rule



As we noted in our piece on Automation, Business Rules, and the SEC’s new Tailored Shareholder Report rule, figuring out the implementation strategy is the challenge.


Because Tailored Shareholder Reports aren’t merely abbreviated shareholder reports, they may offer ‘40 Act asset managers with an opportunity to revisit and rethink their approach to their shareholder reporting regimen.


By doing so actively and creatively, other data-driven marketing, sales, and compliance documents can leverage this new integrated approach to improve their functionality as well.


And now that SEC Rule 30e-3, which allowed for paper notification of online shareholder report filings, has been rescinded for the Tailored Shareholder Report, creating a more streamlined and efficient reporting process is warranted.


Given our deep experience in the investment data/content automation world, we see many parallels between our traditional areas of expertise and Tailored Shareholder Report strategy. After all, these are, at their core, a fact sheet in disguise.

We believe that by following the same counsel we offer to our investment management clients vis-à-vis the production of their data-driven collateral (fact sheets, pitch books, etc.), fund companies can sidestep many of the hazards and pitfalls that can bedevil the process.


Data is the easy part, actually. Tailored Shareholder Report data management can be  accomplished with a robust data warehouse and automation software and is a relatively straightforward process. It’s what Synthesis has been doing simply and reliably for clients for 25 years.


The complexity here isn’t in the data management, nor is it tied to coding or connectivity – it’s the Tailored Shareholder Report design and production processes that are tricky.


Learn to sidestep the pitfalls – read the Synthesis Tailored Shareholder Report Planning Guide


Tailored Shareholder Report Design

As we wrote in our introductory post on the TSR, one of the SEC’s mandates is for a “visually engaging” format: fonts, colors, layouts, and graphics. But those elements must be balanced against the mechanical aspects of the document; in other words, the final design has to support all the variations that are found across product lines, disclosures, quantitative data, and branding.


Template construction is, then, one of the most important parts of the process.


Here, fund companies should be using data from their actual products and testing it across numerous historical reporting periods to ensure the data fits as it should, irrespective of performance or market conditions, and doesn’t wreck the formatting.


This is what we mean by “measure twice, cut once.”


It’s also important that the emerging design remains faithful to the company’s existing style guides to ensure that the new TSR product is consistent with the rest of the firm’s materials.


All else being equal, it makes sense for the company to use the existing product fact sheets as either a template for the TSR, or as design inspiration.


Production Matters


Because the Tailored Shareholder report is a discrete product, with its own unique characteristics and isn’t merely an abbreviated shareholder report, fund companies should not simply default to their existing production methodologies.


New regulations offer an opportunity to reassess existing production processes to determine if better, more efficient practices can be found. And because the TSR is a fact sheet for fund investors, we believe many of the same best practices apply. To wit:


  • Data automation systems have to be in place to manage the Tailored Shareholder Report’s data integration, content sharing, generation of the graphs and charts from data pulled in from the data warehouse, and enforce business rules for content creation. And it all must occur in an orderly fashion.


  • Understand the requirements surrounding iXBRL tagging and filing with EDGAR. These are incredibly important, make sure these are on your TSR development agenda, as they are not going away.


  • Consistent beginning-to-end procedures of data management, content automation, client reporting, and distribution. If a company traditionally utilizes several partners to handle these steps, it is essential all systems are capable of full integration and can provide seamless transfer of data from start to finish. And all must be accomplished within a strict rules-based platform that ensures all internal business and compliance rules are followed without exception.


  • The operating model is also important to review. Ensuring that the right people are doing the right work in the right place at the right time is critical in the financial reporting cycle.


In the End…
Whenever the SEC offers new guidance to better protect investors, there is always an adjustment period for asset managers – not unlike a new house that creaks and groans as it settles – to figure out exactly how all the nuances and generalities embedded in the SEC’s rulemaking will play out in the market.


It’s here where an effective Tailored Shareholder Report strategy and development process can simultaneously advance your firm’s brand and promote investor transparency.


Interested in learning more?

Our TSR Planning Guide has more on the Tailored Shareholder Rule for 2023-2024:


1. How will it change existing reporting regimens?
2. What are the key elements of TSR planning?
3. What should you ask vendors/partners in the due diligence process?


Click here to read



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Here are some related resources that might interest you:
From the Blog:
10 Best Practices for Tailored Shareholder Report Design
Synthesis Technology Pricing
From the Blog:
Benchmarking and the Tailored Shareholder Report: Staying on the SEC’s Good Side
Automate webpages with Synthesis
From the Blog:
A Few Notes From Our Tailored Shareholder Report Webinar


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