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

Structure the meeting with a timed agenda so the conversation covers all important topics without running over.

Standard review meeting agenda (60 minutes):

1. Personal update and life event check-in (5-10 minutes) -- open with the client, not the portfolio. Ask about family, health, career, goals. Listen for new information that affects the financial plan.
2. Performance review (10-15 minutes) -- present the performance summary prepared above. Walk through returns relative to benchmarks, highlight key drivers, address any underperformance directly.
3. Allocation and rebalancing (5-10 minutes) -- show the drift analysis. If rebalancing is needed, present the recommendation and get client agreement.
4. Financial plan progress (10-15 minutes) -- review goal status, probability of success, any changes needed to contributions, spending, or timeline.
5. Proactive recommendations (10-15 minutes) -- present the 2-3 tailored recommendations prepared above. Explain the rationale, estimated impact, and next steps for each.
6. Action items and next steps (5 minutes) -- summarize agreed-upon actions, assign owners and deadlines, confirm the next review date.

Supporting exhibits to include in the meeting package:

• One-page client context summary
• Performance summary (returns, benchmark comparison, key attribution)
• Allocation drift table (current vs target vs tolerance)
• Financial plan snapshot (goal progress, probability of success)
• Proactive recommendation briefs (one paragraph each with estimated impact)
• Fee summary for the review period

Compliance Pre-Check

Before the meeting, verify that all compliance and administrative items are current. This prevents the advisor from making recommendations based on stale suitability data or expired agreements.

Pre-check items:

• IPS recency -- has the IPS been reviewed and signed within the past 12-24 months (per firm policy)? If not, add IPS review to the agenda.
• Suitability data -- is the client's risk tolerance, time horizon, and financial situation current? If not updated in over 12 months, add suitability re-evaluation to the agenda.
• Advisory agreement -- is the fee agreement current and signed? Are fees being charged correctly per the agreement?
• Disclosure delivery -- has the client received the current Form ADV Part 2A (or material amendment) and Form CRS? Annual delivery or material change delivery must be documented.
• Beneficiary designations -- have beneficiary designations been reviewed? Flag if never reviewed or if a life event has occurred since the last review.
• Trusted contact -- does the client have a trusted contact person on file per FINRA Rule 4512? If not, add it to the agenda.
• Required Minimum Distributions -- for clients subject to RMDs: has the current-year RMD been calculated and is it on schedule to be distributed by the deadline?

Document any compliance gaps found during the pre-check and add them as agenda items for the meeting.

Worked Examples

Example 1: Annual review for a retired couple

Scenario: Robert and Linda Chen, both age 72, retired three years ago. They have a joint taxable account ($1.8M), Robert's traditional IRA ($950K), Linda's Roth IRA ($420K), and a family trust ($600K). Their combined portfolio is $3.77M. The IPS targets 40% equity / 50% fixed income / 10% alternatives with +/-5% tolerance bands. Robert turns 73 in four months, triggering his first RMD. Their last review was six months ago. The CRM shows Linda had a hip replacement two months ago (noted by the advisor's assistant).

Key Review Elements:

• Context assembly: Pull the household profile showing four accounts, service tier (platinum), and the six-month-old meeting notes. The prior meeting flagged two action items: (1) update the trust's beneficiary designations after their grandson's birth, and (2) review umbrella insurance coverage. Check CRM for status of both.
• Performance: Consolidated household returned 2.1% for the trailing six months versus the blended benchmark's 2.4%. Fixed income allocation (53% actual vs 50% target) slightly underperformed due to rising rates. Equity (37% actual vs 40% target) outperformed but was underweight. Fees for the period: $9,425 advisory fee (0.50% annualized).
• Drift analysis: Equity at 37% is 3% below target (within the 5% band). Fixed income at 53% is 3% above target (within band). Alternatives at 10% are on target. No tolerance band breaches, but equity is trending toward the lower bound. Recommend monitoring; no rebalancing action required yet.
• Proactive recommendations: (1) RMD planning -- Robert's first RMD is due by April 1 of next year. Estimated RMD is approximately $36,900 based on the IRA balance and Uniform Lifetime Table divisor. Discuss timing: take before December 31 to avoid bunching two RMDs in the first distribution year. Consider a qualified charitable distribution if the Chens make charitable gifts. (2) Linda's hip replacement may trigger a review of health care cost assumptions in the financial plan. (3) Check whether the trust beneficiary update was completed per the prior meeting's action item.
• Compliance pre-check: IPS was last signed 18 months ago; due for re-review at this meeting. Suitability data last updated 18 months ago; add re-confirmation to the agenda. Robert does not have a trusted contact on file; Linda's is listed as their daughter. Add trusted contact for Robert.

Analysis: The meeting should lead with a personal check-in about Linda's recovery, then focus on three substantive items: Robert's upcoming RMD (time-sensitive), the IPS re-review (compliance-driven), and follow-up on the prior meeting's open action items. Performance and allocation are stable and require only a brief update. The agenda should allocate more time to the RMD discussion and IPS re-review and less time to performance, since there are no significant drift or performance issues.

Example 2: Quarterly review for a high-net-worth executive

Scenario: Priya Sharma, age 48, is a VP at a publicly traded technology company. Her portfolio consists of a taxable brokerage account ($2.1M diversified), a 401(k) at her employer ($1.4M), a backdoor Roth IRA ($380K), and unvested RSUs worth approximately $1.2M (vesting over the next 3 years in quarterly tranches). Her concentrated stock position in her employer is $850K (vested shares in the taxable account), representing 14% of total investable assets. The IPS targets 70% equity / 25% fixed income / 5% alternatives. The market has been volatile with tech stocks down 12% in the quarter. She has $180K in unrealized losses across three positions in her taxable account.

Key Review Elements:

• Context assembly: Pull Priya's profile, four-account inventory, RSU vesting schedule from the most recent equity compensation statement, and prior meeting notes. The last quarterly review flagged that the concentrated stock position was approaching the 15% threshold for discussion. No life events on record.
• Performance: Taxable account down 6.2% for the quarter due to tech exposure. 401(k) down 3.8% (more diversified). Roth IRA down 2.1% (conservative growth allocation). Consolidated portfolio down 4.1% versus the blended benchmark's -3.5%. The 60 basis point underperformance is primarily attributable to the concentrated employer stock position.
• Drift analysis: Current equity allocation is 73%, 3% above the 70% target (within the +/-5% band). However, equity concentration risk is elevated: employer stock at 14% of total assets is near the 15% discussion threshold. If the next RSU tranche vests ($100K), the combined employer exposure rises to approximately 16%. Fixed income at 22% is 3% below target.
• Proactive recommendations: (1) Tax-loss harvesting -- the $180K in unrealized losses across three positions represents a significant harvesting opportunity. Identify replacement securities to maintain market exposure while realizing the losses. At Priya's marginal tax rate (estimated 35% federal + state), these harvested losses could offset up to $63K in future gains. (2) Concentrated stock management -- with employer stock at 14% and approaching 16% after the next vest, recommend beginning a systematic diversification program: sell a portion of each RSU tranche as it vests via a 10b5-1 plan, and consider selling some existing shares in the current quarter to offset against the harvested losses (netting the tax impact). (3) Roth conversion -- Priya's income is high, so a direct conversion is not tax-efficient now, but flag this for future planning if she ever has a career transition or sabbatical.
• Compliance pre-check: IPS current (updated 8 months ago). Suitability data current. Check that the firm has Priya's most recent equity compensation plan documents on file to verify trading window restrictions before recommending any employer stock sales. Confirm advisory agreement fee schedule.

Analysis: This review should focus on the actionable opportunities created by the market downturn: the tax-loss harvesting is time-sensitive (approach before year-end or before prices recover) and the concentrated position management is proactive risk reduction. The agenda should allocate significant time to the TLH and concentration discussion, with a brief performance review focused on explaining the underperformance relative to benchmark. Frame the market downturn as creating opportunities (TLH, buying at lower prices for rebalancing) rather than dwelling on losses.

Example 3: Triggered review after a major life event

Scenario: David Patel, age 55, recently received a $1.5M inheritance from his mother's estate. He is an existing client with a taxable account ($600K) and a traditional IRA ($480K). His current IPS targets 60% equity / 35% fixed income / 5% cash. The inheritance is currently sitting in the estate's money market account and will be distributed to David within 30 days. David also inherited his mother's house, which he plans to sell (estimated value $450K). The CRM shows the advisor logged a call two weeks ago when David first informed them of the inheritance.

Key Review Elements:

• Context assembly: Pull David's existing profile and accounts. Note that his investable assets are about to nearly triple (from $1.08M to approximately $2.58M in financial assets, plus the $450K house sale pending). This magnitude of change requires a comprehensive review, not a routine quarterly meeting. Pull the prior meeting notes and the advisor's call log from two weeks ago to understand what was discussed initially.
• Performance: While normal performance review is secondary in a life-event-triggered meeting, provide the current portfolio summary for context: existing accounts are performing in line with benchmarks. The focus of this meeting is forward-looking, not retrospective.
• IPS re-evaluation: The existing IPS was written for a $1.08M portfolio. With $2.58M+ in assets, David's risk capacity has materially changed. He may be able to take less risk (same lifestyle supported by a larger asset base) or may choose to maintain his risk level with a higher expected return. The IPS must be re-evaluated and re-signed. Time horizon, liquidity needs, and objectives should all be revisited.
• Proactive recommendations: (1) Inheritance integration strategy -- develop a plan for deploying the $1.5M. Options: lump-sum investment into the target allocation, dollar-cost averaging over 6-12 months (suitable if David is anxious about market timing), or a hybrid approach. Factor in current market conditions and David's risk tolerance. (2) Tax planning for the inherited assets -- determine the cost basis of inherited securities (stepped-up basis at date of death). If the estate holds appreciated securities, the stepped-up basis eliminates embedded gains, which may influence the decision to liquidate vs transfer in-kind. (3) House sale planning -- the inherited home receives a stepped-up basis. If David sells within a reasonable period at a price close to the date-of-death value, there should be minimal capital gains. Coordinate timing with the overall investment plan. (4) Estate plan update -- David's own estate plan should be revisited given the nearly tripled net worth. Beneficiary designations on the IRA should be reviewed. (5) Evaluate whether David's employer group life insurance and umbrella liability coverage are adequate for his new net worth.
• Compliance pre-check: The IPS must be re-done given the material change in circumstances. Suitability data must be updated to reflect the new financial situation. If the inherited assets include any securities on the firm's restricted list, flag immediately. Verify that the advisory agreement's fee schedule applies to the combined AUM (check breakpoint tiers).

Analysis: This is not a standard review; it is a financial planning event triggered by a significant life change. The agenda should prioritize (1) understanding David's emotional state and goals for the inheritance, (2) re-evaluating the IPS with updated financial data, (3) developing the deployment strategy for the $1.5M, and (4) coordinating the house sale with the broader plan. Performance review of existing accounts is a minor agenda item. Allow 90 minutes rather than the standard 60 for this meeting. Consider splitting into two sessions: an initial planning session to discuss goals and update the IPS, and a follow-up session to present the specific investment recommendation once the plan is updated.

Common Pitfalls

• Presenting performance data without preparing a narrative explanation of the key drivers -- raw numbers without context invite confusion and anxiety
• Skipping the life event check-in and jumping straight to portfolio data -- missed life events lead to stale plans and missed advice opportunities
• Preparing generic market commentary that is not connected to the client's actual holdings or strategy
• Failing to check the status of action items from the prior meeting, which signals to the client that follow-through is weak
• Not running the compliance pre-check before the meeting, leading to outdated IPS, suitability data, or disclosure delivery gaps discovered after the fact
• Over-preparing the meeting package with 30 pages of data instead of a focused 5-6 page package with the key exhibits
• Presenting rebalancing recommendations without estimating the tax impact for taxable accounts
• Not adjusting the standard agenda for triggered or life-event reviews, which require more time and a different conversation structure than routine periodic reviews
• Ignoring upcoming deadlines (RMDs, estimated tax payments, RSU vesting dates) that require time-sensitive action
• Treating all clients identically rather than tailoring the depth and focus of preparation to the client's complexity and service tier

Cross-References

• performance-reporting (wealth-management plugin): provides the performance data assembled into the review package; review prep extracts summary metrics and narratives from the full performance report
• performance-attribution (wealth-management plugin): attribution analysis highlights for discussing what drove returns; review prep pulls the top contributors and detractors for talking points
• investment-policy (wealth-management plugin): the IPS provides the reference framework for evaluating drift and suitability; review prep checks IPS recency and uses targets for drift analysis
• rebalancing (wealth-management plugin): drift analysis and rebalancing recommendations are core review talking points; review prep identifies drift but references rebalancing for execution methodology
• tax-efficiency (wealth-management plugin): tax-aware recommendations (Roth conversions, asset location) for proactive review items; review prep flags opportunities without re-deriving the underlying analysis
• tax-loss-harvesting (wealth-management plugin): TLH opportunities are flagged during review prep as proactive recommendations; the TLH skill provides the methodology and wash sale rules
• client-onboarding (advisory-practice plugin): onboarding data populates the initial client profile used in reviews; the profile assembled during onboarding is the starting point for all future review prep
• client-reporting-delivery (advisory-practice plugin): review prep feeds into and complements the report delivery workflow; the meeting package may include or accompany the formal client report
• crm-client-lifecycle (advisory-practice plugin): CRM provides client segmentation, review scheduling data, life event logs, and prior meeting notes that drive review preparation
• financial-planning-workflow (advisory-practice plugin): financial plan progress is a key review agenda item; review prep pulls goal status and probability-of-success metrics from the planning system