Quarter ends: Tips from a broker on how to talk to yours

What do you do at quarter's end?

For guys like me, financial advisors who run money for others, quarter's end is a combination of game time, fess up time, fun time and Darwin time. I'm going to speak to my fellow advisors very candidly here, but I believe that what I'm about to say will be helpful for most readers in one way or another.

Game Time:

The end-of-quarter review is one of several built-in opportunities an advisor has to discuss a client's current portfolio with him or her. Yes, it's a cliché but that doesn't strip the value from the process. Quarterly review is a time to recalculate weightings, rebalance asset classes and second guess some of the holdings that are not performing the way they were expected to.

Make no mistake, even a casual quarterly update with a satisfied client needs to be treated like it's Game On - this is a very competitive business and not having the right answers or a definitive strategy to convey could cost you a relationship, performance or not.

'Fess Up Time:

Anyone looking for a .1000 batting average out of a financial advisor is on the road to the Heartbreak Hotel. Depending on your stock and sector selection process as well as your ongoing due diligence program, you may have a lot to own up to or just a little as you give uncooperative investments more time to play themselves out.

Personally, I've learned the hard way to 'fess up to mistakes or admit that things have changed as early as I can. Sometimes too early, but never too late. Not anymore. Being brutally vocal about things I think I've gotten wrong has cost me some clients along the way, but I have reams of evidence that it's saved my accounts and my practice in the long run. If I have to err on one side, I'd rather think I was wrong and be mistaken than find out just how wrong I am when it's too late.

But that's just me.

Fun Time:

I love freeing up liquidity from the wrong places and being in a position to reallocate. For me, I get the same restless feeling that Gordon Lighfoot describes when he hears that "whistle blast, sees an image from the past, of an old schooner flyin' down a sky that's overcast." Gordon and I are yearning for the adventure of new positions, new trades and better weightings for the challenges and triumphs to be encountered during the next market phase. You will find that your clients enjoy this even more than you do.

Darwin Time:

Natural Selection has been a reality for Wall Street professionals since the Buttonwood Tree and modern asset management is not immune.

I may not have the best track record on the planet, but that's OK because no one knows who does, even the guy that actually has it. What I do know is that there isn't an advisor alive that deserves the responsibility that a client confers on them more than I do. How do I know this? It is deeply ingrained in me; even a terrible stretch in the markets or a massive blow to my confidence that comes from a client defection won't change that. I am aware that I will make mistakes in the market and you will never hear me say that I won't.

But I will not make mistakes when it truly counts: There will be no mistakes made in terms of honoring my clients' wishes, looking out for what's in their best interests or taking all relevant factors into account when constructing a portfolio. There will be no unreturned calls and emails, nor will there be any hiding during a rough stretch. There will only be an advisor who is obsessed with keeping on top of the markets and the economy for the benefit of his customers.

And knowing this about myself puts me in the right frame of mind to pick off my weaker competitors when the opportunities present themselves. The guys who don't care to keep up with what's working in the tape, the guys who are overcharging for a jammed up wirehouse product, the guys who don't keep in touch with customers when things look ugly, the guys who play Wednesday golf while their customer assets are at risk. Do you fit this description? I may not be "better" than you for sure, but I never stop trying to be, so take care of your people before they become my people.

***

The end of the quarter is not about endings - it is really about the beginning of the next quarter, pregnant with possibilities and, of course, fraught with potential danger. But I'm getting on the same page with my accounts, running diagnostics on my portfolios, checking on my holdings and getting my weightings right. I am planning for the probabilities of what may come and making the adjustments that people are counting on me to make.

This is what I am. This is what I'm here for.

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