How often should a financial advisor review a client's investment portfolio?

A financial advisor should regularly review a client's investment portfolio and adjust the strategy as needed based on the client's changing needs and circumstances. Investments are not static; they can fluctuate due to market conditions, changes in the client's financial situation, shifting goals, or changes in the economic environment. Regular reviews ensure that the investment strategy remains aligned with the client's objectives, risk tolerance, and time horizon.

Moreover, these reviews allow for proactive adjustments. For instance, if a client experiences a significant life event, such as a change in employment, the birth of a child, or nearing retirement, a thorough review can help re-evaluate investment strategies to better serve the client’s new circumstances. This approach emphasizes the importance of an adaptive and responsive management style, which is crucial for effective financial advising.

In contrast, limiting reviews to just once a year, every five years, or only when a client requests a meeting does not support aligning the investment strategy with the evolving goals and conditions of the client. These practices could lead to missed opportunities or increased risk, making regular and proactive portfolio reviews essential for effective financial management.