Conducting a Quarterly Portfolio Review MACS 583

Client Retention LACK OF COMMUNICATION FOUR TIMES PER YEAR One reason a high net worth individual fires a financial advisor1: LACK OF COMMUNICATION Number of times high net worth individuals expect to meet with their financial advisors2: FOUR TIMES PER YEAR Sources:1 Wall Street Journal: August 13, 2001. 2 “Higher Fees Follow Highly Effective Meetings,” horsesmouth.com: June 18, 2001

The Managed Account Consulting Process Client Objective Asset Allocation Portfolio Review Financial Advisor Manager Search & Selection

The Written Agenda Objective Review - Investment Policy Statement Investment Review - Asset Allocation and Style Diversification Services Review - Adding Value Benefits – Sales Opportunity

Objective Review Lifestyle – Has anything changed? Growth - How much is enough? Income - Cash flow needs for preferred lifestyle? Legacy Planning – Distribution? Legal Liability and Tax Efficiency - Preserving earned wealth?

Investment Review Portfolio Holdings – Need for investment manager teleconference? Performance Data – Appropriate benchmark? Client comprehension? Asset Allocation - Rebalance? Redirect? Manager Selection – Reasons for hiring? Time – Reporting time frame versus client time horizon? Long-term objectives?

Services Review Ongoing communication Access to and due diligence of investment managers Consulting and tax management Portfolio construction and review Family wealth management

Benefits: QR as Sales Opportunity Develop influence in relationship Gain greater percentage of client’s assets Rebalance with new money Referrals

Review Advantages Reflects preparation and planning Demonstrates professionalism Personalizes meeting Provides documentation for review Evaluates rationale behind manager selection

Benefits of a Quarterly Review Communication medium Educational platform Retention tool Relationship builder Sales opportunity