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One of advisers’ many responsibilities is to anticipate and help manage clients’ behavioral risks.

Advisers’ role is to help them avoid making poor decisions based on short-term market fluctuations that could derail their longer-term plans. Advisers understand that clients’ goals should be driving their financial plans and that investment performance is just one of the levers used to help attain those goals.

Advisers may say things to clients such as, “Focus on the long-term, turn off CNBC and don’t listen to the noise.”

It doesn’t help that more clients than ever have access to Wall Street noise via the internet or other media.

For advisers who strive to provide comprehensive wealth management rather than investment management services, how are clients perceiving them? Advisers should take an inventory of the deliverables they provide.

Is the adviser’s communication more investment-related or planning-centric? Think about the conversations with clients and how much time is spent discussing the market versus their goals?

Many advisers are guilty of focusing too heavily on investments when communicating with clients. It may be time to reevaluate the approach.


A great example of this is the quarterly investment performance statement. Advisers talk to clients about the importance of focusing on the long term but every 90 days send a report highlighting short-term fluctuations.

In addition, many advisers then compare the client’s investment returns to a benchmark (or several) that may or may not accurately reflect the portfolio.

What message is this sending? Comprehensive planners offer much more than simply investment management, and many don’t want to be viewed as the person trying to help clients beat the market.

Perhaps a few minor tweaks can help how advisers position this traditional deliverable. What if, instead of mailing or emailing clients these performance statements every 90 days and highlighting their returns, advisers leverage technology to change the method of delivery?

Delivering investment statements via a client vault ensures that they are easily available as necessary, but because the client needs to proactively login to see the statement, short-term investment performance becomes less of a focus.

Advisers may even want to consider posting the statement without notifying the client in order to further underplay the focus on performance. Another benefit of using the vault for statement delivery is that the adviser may be able to track which clients are reviewing these statements.

Advisers arming themselves with this information may tell them which clients are hyper-focused on shorter-term performance numbers. Try doing that with paper statements or email.


Another tweak to make to the quarterly statement is to provide a context for the returns. Does providing clients with relative performance to arbitrary benchmarks help them understand if they are on track to reach their goals?

Perhaps instead, the adviser could provide a report illustrating how performance is affecting the probability of achieving specific objectives.

What if Clark and Ellen Griswold received a quarterly statement that showed them exactly where they stand toward their goal of saving for Rusty and Audrey’s college? The statement could still show performance but track that performance against the family’s goals, The Griswold Family Index, if you will.

The resulting conversation would change completely. Instead of calling to talk about why a certain investment didn’t perform as well as the S&P 500, Clark might call to ask for ideas on how to save more or discuss whether now is the time to take that family vacation.

By shifting the focus away from investment performance toward goal-based performance, advisers are shifting into a more holistic mindset. After all, what does investment performance really mean?

It isn’t actually about beating the S&P 500 over a quarter but about achieving a long-term goal. It means the difference between having that college savings plan 78% funded versus 85% funded.

It means the difference between deciding to put more into the 529 plans versus having a little extra money to take that family vacation. That is what advisers should be communicating to clients.


The great news is that technology has made this easier than ever to implement. Take this opportunity to speak with vendors to see how to implement vault storage and personalization of client statements, which can enhance and elevate the experience provided.

Keep in mind that I am not suggesting that advisers stop providing transparency on a client’s portfolio or deny clients access to the data they wish to receive.

As stewards of clients’ wealth, advisers must provide transparency in all areas. However, they also need to help clients focus on what is important.

Technology can help advisers place less emphasis on the short term and replace relative performance conversations with conversations that will help clients achieve that which is truly important, as measured by The Griswold Family Index.

This story is part of a 30-30 series on smart strategies for RIAs. It was originally published on June 28.

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