How often must clients be updated on their investment portfolios?

Clients should be updated on their investment portfolios regularly to ensure they stay informed about the performance of their investments and any changes in their financial situation or goals. Typically, an annual update is considered a best practice in the financial industry, as it allows clients to review how their investments are performing over the course of the year and make any necessary adjustments. This annual update provides a comprehensive view of the portfolio's performance and can help in discussing strategies for alignment with the client's financial objectives.

While some clients may prefer more frequent updates, such as quarterly or semi-annually, the minimum standard for ongoing communication and updates is typically set at least once a year. This ensures that clients are not left without information regarding their investments for too long, fostering a stronger advisor-client relationship and enabling informed decision-making.

The option suggesting updates only at the client's request does not support proactive communication, which is crucial for sound financial management. Likewise, recommending updates every five years could leave clients uninformed about their financial status for an excessively long period, potentially leading to missed opportunities or increased risk. Therefore, the practice of providing updates at least annually aligns with industry standards for maintaining effective communication with clients.