How often must financial advisors report their performance to clients?

Financial advisors must report their performance to clients at least annually, but it is often more frequent depending on client agreements. This requirement reflects the need for transparency and ongoing communication between advisors and their clients regarding investment performance and strategy effectiveness. By providing at least annual reports, advisors ensure that clients are kept informed about the status of their investments and can make informed decisions regarding their financial goals.

Additionally, many firms encourage more frequent reporting, such as quarterly or even monthly updates, to maintain a strong client-advisor relationship and to keep clients engaged and informed as market conditions change. The frequency of reporting can also be tailored to the needs and preferences of individual clients, which is consistent with good practice in the financial advisory profession.

This approach emphasizes the importance of regular communication and the need for clients to have updated information in order to effectively manage their financial plans and expectations.