Seeing the private side of your client’s balance sheet

You manage the portfolio you can see. For many of your wealthiest clients, that’s only part of their balance sheet.

Entrepreneurs, post-exit founders and long-time angel investors often hold fifteen, twenty or forty private positions. These include fund commitments made over a decade, co-investments, and direct stakes in companies. Most of it was committed before you met them, sits outside your custodian, and doesn’t appear in your reporting.

This matters in several ways:

• A client asks whether they can afford a new commitment. You can’t see the $3 million already committed and not yet called.
• Cash builds up in an account, and you don’t know it’s being held for capital calls.
• A large distribution arrives and changes the allocation conversation overnight, without warning.
• Your planning assumes a liquid net worth that doesn’t account for what’s still callable.

You’re being asked to advise on the whole picture while seeing only part of it.

What the advisor summary is

We build and maintain a single record of a client’s private investments: every position, entity by entity, with commitments, contributions, distributions, unfunded balances and reported valuations.

If the client chooses, we send you a defined summary each cycle, quarterly or annually, depending on their service. It covers:

• What they hold. The private positions, with the latest reported valuation and its as-of date.
• What’s still callable. Unfunded commitments, plus an illustrative projection of likely calls based on historical information.
• What’s been distributed, and what’s expected. Distributions received, and anticipated liquidity where there is a basis for it.
• Planning-relevant exceptions. For example, valuations more than two quarters old, or K-1s that haven’t arrived.

What you don’t receive

The summary is deliberately limited. You never receive the document vault, K-1s, or signatory and authority detail. Anything beyond the defined summary is for the client to authorize in writing.

How consent works

• The client names you, in writing, as the advisor who receives the summary.
• The client decides what the summary covers.
• The client can withdraw the authorization at any time, and the summaries stop.
• Nothing is shared with anyone the client hasn’t named.

This is the client’s record, and they decide who sees it.

What we don’t do

Advisors reasonably ask whether a new provider in the relationship will compete with them, complicate things, or create risk. So, to be specific:

• We don’t give investment advice. We don’t recommend commitments, allocations, sales or anything else. We don’t run portfolios or offer products.
• We don’t value anything. Figures are shown as reported by the general partner or administrator, with their dates.
• We don’t move money. We have no custody and no signature authority. We don’t instruct, verify or execute capital calls, wires or elections. The client’s designated signatories do that.
• We don’t make judgments. We collate and report the information provided to us. The advice is yours.

The summary is an input to your advice. It doesn’t replace it or compete with it.

What it changes for you

With the summary, the conversations you already have become easier:

• Liquidity planning reflects commitments that are still outstanding, not just the cash in front of you.
• Allocation discussions start from the whole balance sheet.
• Distribution events can be anticipated rather than discovered after the fact.
• Tax-season conversations with the CPA benefit from an early view of which K-1s are outstanding.

For many clients, it’s the first time anyone has been able to advise on the whole picture.

For your compliance team

How your firm receives, records and uses third-party information about held-away assets is a matter for your own policies and your chief compliance officer. We’re happy to walk your CCO through our controls, and to show a sample summary with no client data in it, on request.

How we can work together

Firms prefer different structures, and we can work either way:

• Introduction. You introduce the client. We scope the work with them, and the client engages us directly. The summary comes to you with their authorization.
• Behind your brand. We run the work white-label as part of your service. Your client sees your name, and the work is done to a standard you approve.

Either way, the advisory relationship stays entirely with you. We don’t approach your client about anything other than the record.

Common questions

Do you work with other advisors?
Yes. Our work is advisor-neutral. The client names who receives the summary.

What if the client has more than one advisor?
The client can name more than one recipient and decide what each receives.

Can the summary feed our reporting platform?
We work on top of the tools clients already use, including Addepar, Arch, Canoe and Juniper Square. Ask us about your specific setup.

What happens if the client ends the engagement?
The summaries stop. The record and its documents are handed to the client.

Book a call to talk it through

Franklin Fund Services is not a registered investment adviser, broker-dealer, law firm or accounting firm. Nothing here is investment, legal or tax advice. All figures are presented as reported by general partners, administrators or the client, without independent verification. Information is shared with third parties only where the client has authorized it in writing.