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Best Practices for Financial Advisors to Achieve Client Goals

For financial advisors, achieving client goals requires more than investment expertise. It involves a thorough understanding of each client’s unique financial situation, continuous communication, and diligent portfolio management. A key aspect of this process is ensuring that a client’s material information, such as income, net worth, age, and life changes, is regularly updated and accurately reflected in their financial plans. This blog outlines the best practices for financial advisors to ensure they are effectively serving their clients’ needs and goals.

The Importance of Updating Client Information

Accurate and timely information is crucial for financial advisors to make informed decisions about investment portfolios and overall financial strategies. Here are the main reasons why updating client information is essential:

  1. Customized Investment Recommendations: Advisors rely on up-to-date financial information to tailor investment recommendations to meet clients’ specific needs and goals. Changes in income, net worth, or financial objectives can significantly impact the types of investments that are suitable. For example, a significant increase in income might allow for higher risk tolerance, whereas a decrease might necessitate a more conservative approach.
  2. Precise Risk Assessment: A client’s risk tolerance can change over time due to their evolving financial situation, life stage, and personal preferences. An accurate assessment of risk tolerance helps advisors build portfolios that align with clients’ comfort levels and financial objectives. Without updated information, portfolios might not reflect current risk preferences, leading to potential discomfort and financial stress.
  3. Regulatory Compliance: Advisors must comply with regulatory bodies like the Financial Industry Regulatory Authority (FINRA), which mandates that investment recommendations be suitable for clients. This suitability requirement is based on clients’ current financial situations and investment profiles. Keeping information up to date helps advisors remain compliant and protects clients from unsuitable investment strategies.
  4. Adaptability to Life Changes: Life events such as marriage, divorce, the birth of a child, or retirement can significantly impact financial goals and needs. Timely updates on these changes ensure that financial plans remain relevant and effective. For instance, the birth of a child might necessitate adjustments to savings and insurance plans, while approaching retirement could shift focus towards preserving capital and generating income.
  5. Tax Efficiency: Changes in a client’s financial situation can affect tax liability and the strategies most beneficial to them. By keeping information current, advisors can implement tax-efficient investment strategies to minimize tax burdens and maximize after-tax returns.

Utilizing Updated Information

Financial advisors use updated client information in various ways to manage portfolios effectively and provide sound financial advice. Here’s how:

  1. Asset Allocation: Clients’ income, net worth, and financial goals determine how assets should be allocated across different asset classes (e.g., stocks, bonds, real estate). Updated information allows advisors to adjust asset allocations to reflect current financial situations and market conditions.
  2. Investment Selection: Advisors use financial profiles to select specific investments that align with clients’ risk tolerance and objectives. For example, an increase in income might lead advisors to recommend higher-growth investments with potentially greater returns but higher risk.
  3. Comprehensive Financial Planning: Financial planning involves more than just investments; it includes retirement planning, estate planning, insurance, and tax strategies. Accurate information ensures that all aspects of financial plans are coordinated and working together towards clients’ goals.
  4. Performance Monitoring and Rebalancing: Regularly updated information helps advisors monitor portfolio performance and make necessary adjustments. For instance, if a client’s risk tolerance decreases due to a significant life event, advisors might rebalance portfolios to reduce exposure to high-risk assets.

Best Practices for Financial Advisors

Maintaining accurate and up-to-date client information is a collaborative process between advisors and clients. Here are best practices for advisors to ensure they are effectively serving their clients’ goals:

  1. Regular Reviews: Schedule regular reviews with clients to discuss any changes in their financial situation, goals, or risk tolerance. These reviews can be conducted annually or more frequently if needed.
  2. Prompt Updates: Encourage clients to inform you promptly of any significant changes in their lives, such as a job change, inheritance, major purchase, or health issue. These changes can have immediate implications for their financial plans.
  3. Open Communication: Maintain open and honest communication with clients. Provide clear explanations and ensure clients feel comfortable sharing complete and accurate information, which enables better decision-making.
  4. Documentation: Assist clients in keeping all relevant financial documents organized and readily accessible. This includes tax returns, bank statements, investment account statements, and documents related to significant life events.


Updating client information is not just an administrative task—it is a critical aspect of effective financial planning and portfolio management. Accurate and current information enables financial advisors to provide personalized, suitable, and compliant recommendations that align with clients’ financial goals and circumstances. By maintaining open communication and regularly reviewing clients’ financial situations, advisors can ensure that their investment strategies remain relevant and effective, helping clients achieve long-term financial success.

At Bakhtiari & Harrison, we emphasize the importance of informed and up-to-date financial planning. We work closely with our clients to ensure their financial information is current, enabling us to provide the best possible advice and advocacy. Whether you’re navigating life changes, seeking investment guidance, or addressing legal concerns, our team is here to support you every step of the way. For more information on how we can assist you, visit our website