The client advisor relationship depends on the level and form of communication. Client Communication Client communication involves the giving of all the necessary information that will allow a portfolio to be structured, planned and managed to meet the stated objective as well as feedback to risk assessment, education, written/oral proposals and recommendations. Advisor Communication Advisor communication involves education about investment, their style of investment, their assessment of the client’s attitudes to the various investment risks and degree of aversion to their investment style. Effective Communication Effective communication involves reporting in writing the reasons and rationale for the management of assets and financial needs at outset of the relationship and over time. The level and quality of advisor communication is a direct reflection of their expertise, ability, organisation and service objectives. Relationship between service and communication The narrower the service and asset management objective the lower the reporting requirement. Only effective communication will result in a portfolio appropriate to client needs, market conditions and to the numerous risk preferences that influence an investor’s decision. Risk Assessment, Key Weakness Risk assessment is a key area of weakness within the financial services industry. Most risk assessment is ill suited to managing client expectations or in relating the client’s investment preferences to those of the advisor.   In fact, much of the industry’s risk assessment is based on a minimum standard designed to cover basic compliance requirements required to satisfy security regulations. Education As to the client’s investment knowledge, many firms simply identify the client’s existing investment knowledge and the client’s attitude to risks based on that knowledge. This is insufficient to develop the necessary communication required to provide effective long term asset management. Education is not a regulatory requirement. The education many advisors give their clients is either limited or is comprised of “naïve” simple messages designed to assuage client concerns over risk and return and to deliver a product or portfolio solution. It is important to understand that many financial advisors do not fully understand the theories or structures which they use to deliver your financial services, solutions and products. There is in general a lack of critical analysis of accepted solutions. Most education is focussed on training individuals in the solutions of the financial services industry. Actually questioning the theories and reassessing the basic facts of the problem are not part of today’s professionals’ education. It is debatable whether today’s financial service’s qualifications actually teach advisors how to structure, plan and manage portfolios to meet financial needs over time. | 
