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A Low-Tech Way to Stay on Top of Clients' Financial Issues

A firm's investment planning logs helps it stay familiar with clients.

Helen Modly, 03/02/2006

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Investment managers can too easily fall into the trap of just looking at their client's accounts during the year, but not at their client's changing financial situation. With multiple advisors in your office, the challenge of keeping up with your clients' changes is even greater. Some advisors rely on one of the many sophisticated client-relationship-management (CRM) software programs to track all contacts with clients. We have found this problematic because the content of those contacts, especially if in person or by phone, is not so easily captured as e-mail is. Letting an important deadline slip by or forgetting about a bridge loan that is coming due can make you appear to be out of the loop and uninvolved.

Our solution was to develop a low-tech tracking method we call investment planning logs. We create a log sheet for each of our clients and keep them in a binder. (Each client has a tabbed section in the binder.)  Each log sheet has four sections. (Click here for a PDF of a sample log sheet.)

At the top of the log, we record the client's name, date of birth, federal marginal tax rate, state marginal tax rate, any capital loss carry over amounts available, whether they are subject to AMT, and whether they pay quarterly tax estimates.

The next section lists each account the client has with us, the investment allocation and rebalancing allowances for each account, whether there are any regular withdrawals (amount and date of the month), any regular deposits, and if the account has been set up for prime brokerage trading with our custodian. We also note any minimum cash balances requested by the client and the fee percentage the client pays and which account the fee is deducted from. For clients who pay their quarterly estimates from their investment accounts, we record the due dates and amounts of these estimates. This information allows us to manage our free cash effectively. We don't want to have to place trades to raise cash for a known expense, and we don't want too much free cash just sitting there either.

Next is a section called Planning Dates and Events. Here, we note all the significant activities we are aware of for the year; for example, a projected retirement date, the date a client turns 70½, expiration dates for stock options or other employer plan events, and projected withdrawals such as for weddings and new cars. There is nothing complicated about this, just a few blank lines for us to jot down important things we don't want to forget to consider as we review this client's accounts during the year.

The last section of our log records the advisor's name, date, comments, and a box to check if a meeting occurred or the portfolio was rebalanced. We use this comment section to record what is going on with our clients to help us stay up to speed during the year. Here are a few examples of comments recorded so far this year:

"Spoke to client, she had a little surgery and has decided to postpone the cruise until next year, okay to go ahead and invest the surplus cash in her account-allocated it per her current IPS"

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