The rationale for the allocation and management of the low risk portfolio in relation to the investor's financial needs and risk preferences needs to be provided in the report; providing of course that there is a direct relationship within the low risk allocation to the size and timing of an individual's financial needs. Relative to financial needs, what is the reason for the cash allocation and its objective, the reason for the fixed interest allocation, the amount invested in each security and the maturities of the securities, the amount allocated to international bonds, preferreds and corporate bonds.
Additionally any aspect of the low risk allocation, security selection and strategy affected by market and economic conditions, relative valuations and risk and return also needs to be explained. Allocations that are being or are not being made because of market conditions should be explained as should additional low risk exposure brought about by risk aversion and how this will affect risk and return of the portfolio. Why? Because you need to know if they have a handle on your financial security or not. This should not be an onerous job for a well organised wealth manager. The way financial needs affect the allocation and selection of low risk investments should be capable of being automated and the basic explanation of rationale for the allocation capable of being standardised for all clients. Likewise, the current strategy for all low risk assets should be capable of being put into an appendix to be read, if so wished by the client. A statement of the recommended equity allocation should be provided and accompanied by an explanation for the allocation within each market, or market component and the reason for the current allocation, whether it be under weight or over weight. A basic explanation of the manager's diversification rationale as well as equity investment discipline also needs to be provided. More information on the manager's investment discipline should be provided in either an appendix or a client reference manual. Supporting information on the portfolio covering strategy and individual security or fund justifications as well as specific risk and valuation data should be provided and are discussed in additional reporting data. Why? Every asset and every asset allocation within the portfolio is not there just to manage risk and return, but it also has a role to play in providing either current or future financial needs. Again, a well organised and discipline wealth manager should not find this information onerous or time consuming to provide.  | 
