Welcome back to another blog post in the series “Behind the Scenes at P&A”! If you missed last month’s installment, you can read it here. As teased in that blog post, I’ll be taking a look at the formal quarterly review process.
I’m excited to write about this topic because my previous role as the Director of First Impressions (DOFI, for short) meant I had a lot of first-hand experience with the quarterly review process. In addition to greeting clients and making sure the team has access to their caffeine of choice, the DOFI also handles all “operational” work that leads up to and follows the actual reviewing of accounts…and I’d like to give this a little spotlight, too.
You may have heard an advisor tell you, “Your accounts get reviewed on a quarterly basis, so we will reach out to you at a minimum four times a year.” Without further ado, let’s dig deeper into exactly what that looks like.
The review process begins at the start of each quarter with an Excel spreadsheet that aggregates all active accounts under our management. The first step in the DOFI’s process is to determine if it’s a quarter in which we are reviewing all accounts or accounts over $100k. Accounts under $100k are formally reviewed every other quarter. (Additional reviews occur when monies are added to or withdrawn from an account.)
The DOFI splits the accounts into three sections for the three months of the quarter; then she separates Cannonball/Fireball and Custom accounts. You can learn more about these equity strategies here.
Cannonball/Fireball accounts are generated at the beginning of the month and dispersed to a few members of the P&A investment team. Since mutual funds and ETFs have fund managers who implement fund strategy and manage trade activity, the investment team simply reviews account performance and ensures the accounts haven’t strayed too far from their target asset allocation.
Conversely, custom accounts are sorted into eight “stacks” and scheduled onto the calendar over a period of eight days. They are reviewed in a meeting setting by a team of around six people, including the lead advisor and service advisor listed on the accounts. Because we at P&A are the ones constructing these portfolios, implementing the portfolio strategy, and managing the trade activity, we monitor these accounts in a more dynamic setting (i.e. a meeting) than those accounts with mutual funds or ETFs.
Tools of the Trade
Before diving into a review meeting, you might be asking, “But Hannah – what exactly is being generated and dispersed for review?” I’m glad you asked. We use what’s called our Review Sheet. There have been many iterations of the Review Sheet over the years, and its most recent version looks like this:
As a side note, when I first began working here a little over three years ago, we used a manual Excel spreadsheet into which I would paste data for each individual account that would aggregate into a page similar to what you see above. It took days to get through upwards of 300+ accounts! Then along came “Johnny D”, who built a beautiful macro program within Excel that requires a simple weekly dose of data and can spit out hundreds of reviews in 20 minutes or less.
Review Meetings & After
Review sheets act as a guide during Custom Account review meetings. Someone will read off various data points from the sheet, and then discussion begins on what changes need to be made to the account, if any. As an example, if a portfolio has become heavy to tech stocks, our software might suggest and the advisors in the meeting might agree we trim tech and add to a sector which has become lighter. This is also a touchpoint during which a new stock might get introduced to a portfolio, as long as it’s appropriate and advantageous.
Regardless of what changes do or don’t get made to a portfolio, the lead advisor on the accounts has the final say. This might prompt you to ask, “There are lots of lead advisors – doesn’t this create lots of different-looking portfolios?” The short answer is, no. We at P&A are subscribed to the mindset that we are a team, not a conglomerate of individual advisors. While each advisor may like a few securities over some others, it’s really hard to tell one advisor’s client portfolio from another advisor’s client portfolio of similar size and strategy.
Once all review sheets return to the DOFI’s desk, she begins the creation of “Report Cards” (also referred to by some as “Snapshots”). These are divided amongst the corresponding lead advisors, who may use them for reference when they call a client or email the actual report directly to the client. Thus, these are the “minimum of four times a year” an advisor will reach out to you after the account review process.
Phew! That’s a wrap on the account review process. It takes a full team effort to review your accounts every quarter, from sorting and generating reviews to meeting and discussing your accounts, and we’re here to do it Monday-Friday, 8:00AM to 5:00PM. Thanks for reading, and if you have any questions, please feel free to contact me directly at firstname.lastname@example.org. Next month: Lead and Service advisors.
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