What exactly happens in a Portfolio Review?

If you are seeing a Financial Advisor for the first time or if you are considering changing Financial Advisors, the first step in the process is often a portfolio review. While different Advisors might do some things a bit differently, the portfolio review is normally the first step. The portfolio review is a discovery process where the Advisor learns about you, your investing preferences and your goals. The Advisor will learn about these things by asking questions in a few main areas:

1. You, your family, your personal needs and wants and your current life situation

• In addition to the basic questions you’d expect like age, marital status and number of children the Advisor will ask you questions to learn about your personal goals, dreams and your timeline for achieving these. Any financial plan will need to be aligned to your personal situation.

1. Your lifestyle

• How do you live and where do you spend your money? Do you live a relatively frugal lifestyle in order to save as much as possible or do you believe that there should be more balance and you shouldn’t wait until “someday” to enjoy the fruits of your labour? We may look at your normal spending patterns to understand the type of life you lead which will be a key input to your financial plan.

1. Financial process

• How do you manage your finances today? How do you decide on how much to invest, where to invest it and when to invest? Do you conduct your own portfolio and returns analysis? What professionals, if any, do you use today?

1. Financial needs, today and in the future

• In addition to your day-to-day expenses, what are you planning in the future? Is someone in the family going to school? Are you planning to change jobs to pursue a dream? Are you going to take that round the world cruise you’ve always talked about? Perhaps you are thinking of early retirement in the Okanagan. Learning about your financial goals will allow your Advisor to make a plan that precisely fits your needs.

1. Investment risk profile

• Are you the type of person who hears about a drop in the market and immediately looks to the value of your portfolio with worry? Or are you the type who wonders how you can buy into the Bitcoin frenzy. With a few questions, your Financial Advisor will be able to determine your risk tolerance. This will be important when choosing the right investments for you.

The purpose of the portfolio review is for the Financial Advisor to learn about you so that they can give you answers to your questions and good advice that is specifically tailored for you. After the portfolio review, your Advisor might propose the following next steps or you might take this on yourself:

• Built a strategy and effective plan based on your current financial picture.

• Construct a customized investment plan and put that plan into motion.

• Manage the portfolio against the plan and make adjustments with changes in the market, your investment goals (as you age), or short term financial needs.

• Meet at your desired frequency to review results, re-evaluate your objectives and strategy if necessary and rebalance the portfolio if necessary to achieve your goals.

In addition to the resources we’ve compiled on our site, we are offering a free portfolio review with an experienced and accredited professional. It’s completely free with no obligation and will give you some ideas on strategies that you could use to improve your financial situation, now or in the future.

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