Client Review Prep

Client Review Preparation

Core Concepts

Client Context Assembly

The foundation of review preparation is assembling everything the advisor needs to know about the client before the meeting. This context package draws from multiple systems and should be gathered systematically rather than ad hoc.

Data to assemble:

1. Client profile and household -- pull from CRM: names, ages, employment status, retirement dates, household members, service tier, assigned advisor, communication preferences
2. Investment Policy Statement (IPS) -- the governing document for the relationship: stated objectives, risk tolerance, time horizon, return targets, asset allocation targets with tolerance bands, investment restrictions, benchmark selections, liquidity constraints
3. Account inventory -- all accounts in the household: account types (taxable, IRA, Roth, trust, etc.), custodians, current market values, cash positions, cost basis summary
4. Recent life events -- any changes since the last review: job change, retirement, marriage, divorce, inheritance, birth of child, health event, home purchase or sale, business sale. These come from CRM notes, advisor logs, and financial planning system updates.
5. Prior meeting notes -- what was discussed at the last review, what action items were assigned, which items were completed. Unresolved items carry forward to the agenda.
6. Financial plan status -- if the client has a financial plan: probability of success, progress toward goals (retirement funding, education, legacy), any goals that have drifted off track since the last review
7. Compliance and administrative status -- date of last IPS update, date of last suitability questionnaire, advisory agreement renewal date, fee schedule, any pending compliance items

Assemble this data into a one-page client context summary that the advisor can review in under five minutes before the meeting.

Performance Review Preparation

Performance data is the centerpiece of most review conversations. The goal is not to re-create a full performance report (that is the domain of performance reporting and client reporting delivery), but to extract the key numbers and narratives the advisor needs for the discussion.

Data to collect:

• Period returns for each account and the consolidated household: quarter-to-date, year-to-date, trailing 1-year, since inception (or since last review date)
• Benchmark comparison: portfolio return versus the IPS-designated benchmark for each period
• Attribution highlights: which asset classes or positions contributed most to outperformance or underperformance. Focus on the two or three largest contributors and detractors -- the client does not need a 50-line attribution table in a meeting.
• Fees paid: advisory fees, fund expense ratios, transaction costs. Summarize total cost in dollars and as a percentage of AUM for the review period.
• Income generated: dividends and interest received during the period, withdrawal activity

Prepare the narrative: Translate raw numbers into a short (3-5 sentence) performance summary the advisor can use as a talking point. Example: "The consolidated household returned 4.2% for the quarter versus the benchmark's 3.8%, primarily driven by overweight exposure to international equities. Fixed income underperformed as rates rose, but the short-duration tilt limited the drag. Total fees for the quarter were $3,750 (0.15% of AUM)."

Allocation Drift Analysis

Before the meeting, compare each account's current allocation to its IPS target and identify any positions that have drifted beyond tolerance bands. This analysis feeds directly into rebalancing discussion points but does not re-derive the rebalancing math (see the rebalancing skill for methodology).

Steps:

1. Pull current holdings and market values by asset class from the PMS
2. Calculate current allocation percentages for each asset class
3. Compare to IPS target allocation
4. Flag any asset class where the drift exceeds the tolerance band (e.g., target 60% equity with +/-5% band; current 67% equity is 2% beyond the upper band)
5. Summarize drift in a simple table: asset class, target, current, drift, in/out of tolerance

If drift is beyond tolerance, prepare a rebalancing recommendation as a talking point. Include the estimated tax impact of rebalancing (realized gains or losses) for taxable accounts.

Talking Points Generation

Talking points are the structured notes the advisor uses to guide the meeting conversation. They should be specific to this client, not generic market commentary.

Categories of talking points:

1. Market commentary relevant to the portfolio -- select 2-3 market developments that directly affect the client's holdings or strategy. If the client is overweight technology, discuss tech sector trends. If the client holds municipal bonds, discuss the muni market environment. Avoid generic "the market was up 5%" statements.
2. Rebalancing needs -- if drift analysis identified out-of-tolerance positions, frame the rebalancing conversation: what to trim, what to add, estimated tax impact, rationale tied to the IPS.
3. Upcoming events -- RMD deadlines, estimated tax payment dates, option expirations, bond maturities, CD renewals, vesting events for RSUs or stock options, trust distribution dates
4. Action item follow-up -- status of any actions agreed upon at the last meeting: was the beneficiary update completed? Was the insurance review done? Was the estate plan referral followed through?
5. Life event implications -- if any life events have occurred, prepare talking points on financial implications: new retirement date changes the distribution strategy, inheritance needs to be integrated into the portfolio and plan, divorce requires account retitling and beneficiary updates

Proactive Recommendations

A well-prepared review goes beyond reporting what happened and proactively identifies optimization opportunities. The advisor should walk into the meeting with 2-3 specific, actionable recommendations tailored to the client's situation.

Common proactive recommendation categories:

• Tax-loss harvesting opportunities -- identify positions with unrealized losses that could be harvested before year-end. Note wash sale considerations and replacement security options. Reference the tax-loss-harvesting and tax-efficiency skills for methodology; do not re-derive here.
• Roth conversion windows -- if the client has a low-income year (early retirement, sabbatical, gap between retirement and Social Security), flag the opportunity to convert traditional IRA assets to Roth at a lower marginal rate. Estimate the tax cost and long-term benefit.
• RMD planning -- for clients age 73+ or approaching RMD age: calculate the upcoming RMD amount, discuss the timing of the distribution, evaluate whether to take it in cash or in-kind, consider qualified charitable distributions (QCDs) if the client is charitably inclined.
• Beneficiary review -- flag accounts where beneficiary designations have not been reviewed in over two years, or where a life event (marriage, divorce, birth, death) may have made the current designation inappropriate.
• Insurance and estate review -- if the client's net worth has changed materially, flag the need to review life insurance coverage, umbrella liability, and estate planning documents.
• Cash management -- if cash balances exceed the client's liquidity needs (as defined in the IPS), recommend deploying excess cash to the investment strategy.
• Concentrated position management -- if any single position exceeds a threshold (commonly 10-15% of portfolio), prepare a discussion on diversification strategies: systematic sales, exchange funds, hedging with options, charitable giving of appreciated shares.

Agenda and Meeting Package Assembly