The Client Review Process in Real Life: Home Office Tours and Portfolio Diversification

 

I just finished my first round of client reviews in my new home office. Some days there were four and some days three appointments, plus one included a financial plan update. In my most recent post, I discussed the physical layout of my office and how it and its contents are meant to express clearly what I offer my clients.

During my client reviews, I used my laptop and projector to display the information on the wall. The three-dimensional clay model was also very helpful as it provided a great display of what a diversified portfolio should look like. We even had one client stay for lunch which was a nice Mediterranean delight, courtesy of my faithful wife and assistant. All received a tour of our new home, and of course, everyone saw our little toy poodle Faith. Not exactly your typical experience, but it was much more intimate and friendly. I am really glad I made the move. Now let's take a little closer look at the details.

The Review Structure

After some small talk, and the tour of the home, I asked each client if they had anything specific they would like to discuss. With pen and paper in hand, I listened and made notes as needed. Then I turned on the projector, served the popcorn (just kidding about that), and showed them an overview of their portfolio. Next was a "holdings" report where they can see the particulars of each investment in the account(s). These reports were also printed and placed inside a file folder with their name and the date of the review (i.e.; Q4 2010). Using file folders, they can simply file their reports in chronological order and easily retrieve them in the future if needed.

The next step was a PowerPoint presentation showing the performance of the Dow Jones Industrial Average from 1900 to Jan 3, 2011. The purpose of this was to create proper expectations and foster a healthy respect for the risks inherent in the market. From there, we looked at their portfolio(s) using the web portal of my custodian, TradePMR. We covered the date the investment was purchased, how much was invested, the dividends and capital gains and the gain/loss percentage of each. I also explained how the "raw" investment was different from the "cost basis."

Lastly, I opened GSphere and displayed the diversification of their portfolio and any changes I thought were needed. This tool allows me to optimize the portfolio by starting from scratch or by changing some of the investments and "building" around those I plan to keep. It's kind of like a football team. Each pro team has some star players but the annual player draft is geared toward adding players to complement their existing players.

All in all, I'd say it was a very good week.

Thanks for reading and I hope you have a great week!

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