As a not for profit investment advisory service, crafting an effective annual letter to clients is crucial. Such letters build trust, provide transparency, and demonstrate expertise. When writing these letters, advisory firms must focus on key details clients want to know – the firm’s investment philosophy, performance benchmarks, portfolio strategies, and outlook. Clients value insight into major market events and how the firm navigated challenges. Firms should highlight commitment to clients’ financial goals through prudent investment advisory services. With multiple mentions of investment advisory services, the letter presents the firm as a trusted advisor.
Articulating the firm’s core investment philosophy and process
A not for profit investment advisory services letter must clearly convey the firm’s investment philosophy, such as value, growth, or income investing. Explaining the research process, security selection criteria, and portfolio construction methodology provides transparency into investment decision-making. This builds confidence that rigorous analysis underpins recommendations. Firms should underscore commitment to maintaining a consistent philosophy through various market cycles as a key tenet of investment advisory services.
Evaluating investment performance against appropriate benchmarks
The annual letter presents a prime opportunity for not for profit investment advisory services to evaluate performance. Firms should benchmark returns against appropriate indices that reflect their strategy and asset allocation. For example, a large-cap equity portfolio would be benchmarked against the S&P 500. Providing context on index returns over multiple time periods – 1, 3, 5 and 10 years – enables better assessment. Firms should be forthcoming about periods of underperformance, explaining contributing factors without excuses. Showcasing outperformance highlights the value of investment advisory services.
Detailing major portfolio changes and strategic asset allocation
Not for profit investment advisory services letters should summarize key portfolio changes, new investments, and asset allocation strategy. Discussing significant actions taken in response to major market events demonstrates proactivity. Firms can explain investment theses behind new holdings and why they fit the portfolio strategy. Major sales or position reductions also warrant mentioning. Commentary on strategic asset class weightings give clients insight into portfolio positioning. This level of detail reinforces the firm’s active investment advisory services approach.
Sharing market observations and future outlook
Clients want to hear not for profit investment advisory services perspectives on the macro environment and outlook. Firms can share high-level observations on economic conditions, policy shifts, and geopolitical events that impacted markets. However, avoid politics unrelated to investing. The letter also offers a chance to convey the firm’s forward-looking view – where they see opportunities and risks. This demonstrates that, as part of investment advisory services, the firm maintains a insightful, nuanced market perspective.
An annual letter allows not for profit investment advisory services to strengthen client relationships through transparency. By focusing on philosophy, performance, portfolio strategy and market outlook, firms reinforce their advisory role. This breeds client trust and confidence in the firm’s active investment process. With investment advisory services top of mind, clients gain assurance that their interests are being prudently safeguarded for the long-term.