What is a Portfolio Review Letter?

A portfolio review letter is a written communication from a financial advisor to a client that provides a structured summary of the client's investment portfolio performance over a specific period. These letters are typically sent quarterly and serve multiple purposes: they demonstrate the advisor's ongoing attention to the client's finances, provide transparency into investment results, and reinforce the value of the advisory relationship.

Key Components

Performance Summary

The letter should present portfolio returns for the period, year-to-date, and since inception. Compare performance against relevant benchmarks and the client's target return. Present returns in both percentage and dollar terms so clients can understand the real impact on their wealth.

Market Commentary

Provide context for the period's performance by discussing relevant market events, economic indicators, and trends that affected the portfolio. This helps clients understand that their portfolio operates within a broader market environment.

Asset Allocation Review

Show the current asset allocation alongside the target allocation. Explain any drift that has occurred and whether rebalancing is recommended. Discuss any changes in the client's risk profile or time horizon that might warrant an allocation adjustment.

Looking Ahead

Conclude with the advisor's outlook and any recommended actions. This might include rebalancing, tax-loss harvesting, contribution adjustments, or changes to the investment strategy based on evolving market conditions or client circumstances.

The Importance of Regular Communication

Research shows that clients who receive regular, proactive communication from their advisor report higher satisfaction and are significantly more likely to provide referrals. The Advisor Review Letter Generator helps advisors create personalized, professional review letters that strengthen client relationships and demonstrate ongoing value.