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Making the Most of Investment Reviews

Joe Buhrmann July 25, 2023

A financial advisor holding an investment review meeting with a client.
Updated on: December 13, 2023

Investors are at a crossroads. On the one hand, the barriers to investing for many people have never been lower. On the other, lower barriers mean the vast array of investment choices has never been greater.

So, how is an investor to make sense of their investment options and make good decisions? Many of them have much of their wealth tied up outside of the care of an advisor, such as in a brokerage account or a retirement account, and they are now looking to financial professionals for advice. Their need for guidance will only continue to grow as their wealth grows.

Incorporating a regular cadence of investment reviews into your financial planning process will help you meet rising demand. Not only that, but scaling your investment planning efforts as a part of your business plan can lead to growth opportunities for your firm.

The Importance of Conducting Regular Investment Reviews

Investment reviews play a key role in helping you develop and evaluate a client’s financial plan. And like financial planning overall, assessing your clients’ investments is not a one-time event. Rather than being transactional in nature, it’s an ongoing process that will help your clients manage all areas of their financial lives.

Life events and changes in circumstances, such as a change in income or new addition to the family, can have an impact on your clients’ investment selections and financial plans. Due to that, it is important to conduct ongoing reviews to evaluate whether your clients are still on track for meeting their objectives.

Along with ensuring that you are continually evaluating whether your clients are still positioned for success, including investment reviews and investment review meetings as part of your client service calendar will bring additional benefits to you and your firm. They can help you:

1. Gain and retain more clients: Clients choose advisors not based on the answers they give, but on the questions they ask. In a survey, 52 percent of respondents cited “takes the time to understand your needs, goals, and risk tolerance” as an extremely important factor when choosing an advisor.1 Don’t underestimate the value you bring to your client by asking them a few simple questions about their investments to ensure their portfolios are aligned correctly to their tolerance for risk.

2. Give your clients confidence in their plans: Investors today have many concerns with the current economic conditions. Seven in ten Americans say that rising inflation will negatively affect their retirement savings.2 Nearly half are concerned about interest rates affecting their retirement income.2 Conducting regular investment reviews and stress-testing plans for things outside their control, such as inflation, tax changes, or other economic changes, will help your clients feel more confident.

3. Increase client engagement: Regular reviews will help clients stay engaged with the planning process. If your clients are more engaged with their plan, you will be able to build stronger, deeper relationships with them. Strong relationships with satisfied clients can lead to repeat business and ongoing revenue, as well as referral traffic.

4. Uncover more planning opportunities: Investment reviews also give you the chance to find out whether your clients have additional needs that require planning or other solutions. You may have talked to your client about their other goals or their family and children, which can lead to an opportunity for a conversation about college funding.

5. Bring more assets under your management: Through the course of your review, you may discover that a client or prospective client has an array of accounts and funds. If you can get them to connect their held-away assets so that you can include them in your review, that can lead to opportunities to capture some of them and bring them under your management. After all, if you (the advisor) aren’t at the helm, who is?

Developing an Efficient Investment Review Process

If you are looking to scale your investment planning and review efforts, it will be important to develop an efficient, effective workflow that you can apply within your financial planning process.

An investment review can be completed in three steps:

1. First, how should the client be invested? Should they be aggressive, conservative, or somewhere in between? To assess this, you will want to have your clients complete a risk tolerance questionnaire. This could be a task you ask your clients to complete as part of your digital onboarding process.

2. Once you know where they should be, it’s time to assess where they actually are. You will likely see some form of disconnect between how they are invested and how they should be invested.

3. Now, with those two steps complete, you’re ready to make recommendations for how to help align where they are to where they should be.

Leveraging financial planning software will help make this process more efficient. You’ll want to have software that has integration and account aggregation features so you can bring in any assets under your care and have your client link their held-away accounts. This will ensure that you get the full picture of your clients’ finances.

Taking It A Step Further

A completed investment review isn’t the end of the planning–it’s only the beginning. Here are a few of the possible actions you can take after you have completed an investment review meeting with a client:

  • Get more granular: Was your initial review held at the high level? Your next step could be to delve deeper into the details. If you weren’t able to include all of the clients’ assets in your initial review, it’s time to do so now. If you discovered that your clients could benefit from consolidating some of their accounts, work with them to facilitate that.
  • Protect the plan: Think of your clients’ plan as a castle. Your clients have their wealth inside of the castle, but every castle needs a moat to protect it. Do your clients have a moat or are there additional measures, such as liability insurance, that can be put in place to ensure their wealth is protected?
  • Target the next best planning opportunity: Did you uncover any additional needs, such as college funding, an upcoming house purchase, or a plan to start a business? Take the time to talk to your clients about these financial goals and how they can fit into their financial plan.

Looking for other ways you can bring more value to your clients? Learn more about how you can optimize service expansion and grow your financial practice.

Sources:

1. U.S. Retail Investor Edition, Cerulli, 2022.

2. “2022 State of Retirement Planning Study.” Fidelity Investments, 2022.

DISCLAIMER: The eMoney Advisor Blog is meant as an educational and informative resource for financial professionals and individuals alike. It is not meant to be, and should not be taken as financial, legal, tax or other professional advice. Those seeking professional advice may do so by consulting with a professional advisor. eMoney Advisor will not be liable for any actions you may take based on the content of this blog.

Image of Joe Buhrmann
About the Author

Joe serves as a Senior Financial Planning Practice Management Consultant at eMoney Advisor. With more than three decades in the financial services industry, Joe aligns his know-how and passion to help firms of all sizes increase usage, adoption, and engagement through a modern financial planning experience. He leverages his expertise and supports internal departments across the enterprise, helping Communications, Marketing, Relationship Management, and Sales. Joe attended Illinois State University, where he received his bachelor’s degree in Applied Computer Science and his MBA.

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