Does Your Advisor Avoid Talking about Performance?

Monitoring the performance of an investment portfolio is a tricky task. On one hand, many investors would benefit from not becoming overly focused on performance. Doing so tends to lead to an unhealthy focus on short-term volatility/price movements, which can easily lead to an investor making a knee-jerk, emotional decision that runs counter to their long-term goals.

On the other hand, not tracking your performance on a regular basis could mean losing sight of whether your advisor is doing a good job for you. So, there’s a tradeoff and a balance to be found.

How often should you check your portfolio’s performance then? The answer is not necessarily a cut-and-dry number, like once a month, once a week or once a year. Instead, there are really two things to consider:

• Know your own weaknesses – if checking performance every day makes you nervous and leads to frequent changes to your strategy, then you should make it a goal to only look once a month or once a quarter (if not longer).
• Make sure your advisor is giving you the full picture – when you do talk about performance, make sure your advisor is explaining not only what your portfolio performance is, but why it’s performing that way. There is no financial advisor in the world that won’t experience negative performance from time to time, and that’s OK. The difference is the advisors that explain what’s happening and why, and those that avoid the conversation altogether.

The Key to Performance Transparency: Accessibility

Accessibility goes beyond just having online access to your accounts. Your advisor should be ready and willing to provide you performance upon request, in the form of reports with hard data. To be fair, however, you should discuss with your advisor what a good plan is for checking performance. Again, if checking performance too often could be a deterrent to “staying the course,” then maybe you should make an arrangement to speak about performance just on a quarterly basis with your advisor.

The overarching key, however, is that you should feel as though your advisor is not trying to avoid the conversation or to avoid providing you the information you’re requesting. Having a full range of services provided to you by an advisor is very important, but at the end of the day it’s long-term performance that matters.

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At WrapManager, our Wealth Managers meet or speak with clients on a quarterly basis, to review how the strategies are performing and also to see if you’ve had any changes to your financial situation or objectives—which might necessitate a change to your investment plan. We provide reports upon request and have a client portal online where clients can review their portfolio as often as they’d like, and your personal Wealth Managers is there to answer questions.

Take a virtual tour of the WrapManager difference and review strategies over the phone and online by giving us a call at 800-541-7774.