With end of year performance reporting looming, advisors should be preparing what they'll be communicating to clients, including the past year's performance and the outlook going forward. In his book Asset Allocation: Balancing Financial Risk, Roger Gibson writes about the troublesome issue of performance reporting both for the advisor and the client when short term results can overshadow long term planning. His recommendation is to focus on evaluating performance in terms of progress made towards financial goals. Our own Prudent Practices recommend year end reviews not only report returns, but also review fees, expenses and fiduciary operations.
Other than that, free resources or information on the web about year end presentations were difficult to find. If you have any that you know of, please post them to the comments for others to see or email them to blog@fi360.com. In addition, we'll be hosting a free webinar in which we give our recommendations of what to include in your year-end presentations and what clients should be looking for when they sit down with their advisor for the year-end report.
On to the rest of the links...
In the news/commentary:
- Why investors are pulling their money out of brokerages
- Investors forgetting last year already? Chasing higher yields
- The 60 second explanation of fiduciary
- Update on the status of the fiduciary debate in Australia
- Minneapolis Star-Tribune explains fiduciary v. suitability
- Fiduciaries need liability insurance
From the organizations/associations/government/academia:
- FINRA increasing lobbying budget
- DoL finally killed the Bush advice rule, new rule to be written
- Financial planners say some advice shouldn't be covered in new regulations
From the blogs:
- How to find a financial planner you can trust
- Is your target date fund appropriate?
- Planners need to ask their clients the tough questions
Tweet of the week:
@SherylGarrett: Express support for #fiduciary standards for all advisors at http://www.thefiduciarystandard.org Get involved!
Have a link we missed? Leave them in the comments section or email us at blog@fi360.com. For more of the best links during the week, make sure you follow us on Twitter.
Advisors should also decide HOW to report performance. Time-weighting reflects the performance of an advisor who has discretion over the portfolio but not the cash flows; money-weighting reflects performance of the account and takes cash flows into consideration. These are topics I address often in my blog (http://investmentperformanceguy.blogspot.com/). Advisors should also be including risk measures, since the importance of risk is growing in our industry.
Posted by: David Spaulding | November 28, 2009 at 02:38 PM