As you now know, an important partnership exists between a client and his or her advisor. Often there are misunderstandings as to where responsibility for certain actions falls. In the interest of clarifying this relationship, the roles of both advisor and the client are laid out below.
Advisor Responsibility
♦ Knowing the client's financial needs
♦ Maintaining confidentiality--keeping all information pertaining to the client's finances private
♦ Constructing an asset allocation to match the client's objectives
♦ Selection of specific securities for the client's portfolio
♦ Frequently communicating with the client through monthly and quarterly reports, as well as through meetings
♦ Rebalancing the client's assets over time
♦ Reallocating the client's assets as circumstances change
Joint Responsibility
♦ Determining the investment objectives - having a mutual understanding between the client and advisor as to the client's risk-tolerance and anticipated returns
♦ Determining product selection - the advisor and the clients will agree on the types of investments (mutual funds, stocks, annuities, etc.) that will be incorporated into the client's portfolio
♦ Monitoring performance
♦ Determining taxable consequences - the client must inform the advisor of his or her tax situation so that the client and the advisor can build a tax-efficient portfolio
Client Responsibility
♦ Providing the advisor with all financially relevant information
♦ Establishing a financial goal
♦ Notifying the advisor of liquidity needs and expected cash flow
♦ Informing the advisor of any change in objectives and financial situation
Reed & Associates, Inc. 16935 W Bernardo Dr Ste 112 San Diego, CA 92127-1634 Phone: 858-673-0878 | Fax: 858-430-3883 | Email: info@reedwealth.com CA Insurance License #0534132
Advisory services offered through Reed & Associates, Inc., a
registered investment advisor. Pension plan record keeping offered
through other fine companies.
